**Exhibit 4.31**

 

 

(EnglishTranslation)

 

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**Operator-based ComprehensiveServices Agreement**

 

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**Between**

 

**Unicom New Guoxin TelecommunicationsCorporation Limited**

 

**And**

 

**China United Telecommunications Corporation Limited**

 

 

 

**March 24, 2005**

 

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**Table of Contents**

 
| **1.**                                                | **BASIC PRINCIPLE**                                       |   |
|-------------------------------------------------------|-----------------------------------------------------------|--------|
|                                                  |                                                      |   |
| **2.**                                                | **THE CONTENT OF OPERATOR-BASED COMPREHENSIVE  SERVICES** |   |
|                                                  |                                                      |   |
| **3.**                                                | **PRICING  PRINCIPLE AND PAYMENT**                        |   |
|                                                  |                                                      |   |
| **4.**                                                | **TERM**                                                  |   |
|                                                  |                                                      |   |
| **5.**                                                | **STATEMENTS,  WARRANTIES AND PROMISES**                  |   |
|                                                  |                                                      |   |
| **6.**                                                | **TRANSFER**                                              |   |
|                                                  | ** **                                                |   |
| **7.**                                                | **TAKING  EFFECT**                                        |   |
|                                                  |                                                      |   |
| **8.**                                                | **FORCE  MAJEURE**                                        |   |
|                                                  |                                                      |   |
| **9.**                                                | **CONFIDENTIALITY**                                       |   |
|                                                  |                                                      |   |
| **10.**                                               | **NON-WAIVER**                                            |   |
|                                                  |                                                      |   |
| **11.**                                               | **NOTIFICATION**                                          |   |
|                                                  |                                                      |   |
| **12.**                                               | **APPLICABLE  LAW**                                       |   |
|                                                  |                                                      |   |
| **13.**                                               | **SETTLEMENT  OF DISPUTES**                               |   |
|                                                  |                                                      |   |
| **14.**                                               | **MISCELLANEOUS**                                         |   |
|                                                  |                                                      |   |
| **ANNEX I: CELLULAR SUBSCRIBER VALUE-ADDED SERVICES** |                                                      |
|                                                  |                                                      |
| **ANNEX  II: 10010/10011 CUSTOMER SERVICES**          |                                                      |
|                                                  |                                                      |
| **ANNEX  III: AGENCY SERVICES**                       |                                                      |

 

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This Agreement is entered into as of March 24,2005 between the two Parties in Beijing, the People’s Republic of China (“PRC”):

 

(1) Provider: Unicom New GuoXinTelecommunications Corporation Limited (“Unicom New Guoxin”)Address: BoRuiQi Building, No 53, XiBianMenNei Avenue, XuanWu DistrictBeijingLegal Representative: Ge Lei

 

(2) Receiver: China United Telecommunications Corporation Limited (“AShareCompany”)

Address: 40 floor of JinMao Building, No 88, ShiJi Avenue, Shanghai Legal Representative: Chang Xiaobing

 

Whereas:

 

(1)                                  Unicom New GuoXin is a limited liability comapnyregistered and existing under the PRC laws. A Share Company is a joint-stock limited company registeredand existing under the PRC laws, with its shares listed in ShanghaiStock Exchange on October 9, 2002. China United Telecommunications Corporation (“UnicomGroup”) holds 69.3224% of its shares.

 

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(2)                                  On August 12, 2002, Unicom Group and A ShareCompany signed a memorandum of understanding on the transactions to beconducted after the listing of the shares of A Share Company (“ConnectedTransactions MoU”) between Unicom Group or its subsidiaries (excluding A ShareCompany and the subsidiaries held by A Share Company) and China Unicom Limited(the “Red-chip Company”) indirectly held by A Share Company and itssubsidiaries. According to the understanding reached in the ConnectedTransactions MoU, in the event that the transactions to be conducted betweenRed-chip Company itself or its subsidiaries and Unicom Group or any of itssubsidiaries (excluding A Share Company and the subsidiaries held by A ShareCompany) require approval of theminority shareholders of A Share Company under the Rules Governing the Listingof Shares on Shanghai Stock Exchange (“Rules of SSE”) applicable from time totime, which are deemed at the same time as connected transactions that requireapproval of the minority shareholders of Red-chip Company under the RulesGoverning the Listing of Securities on the Stock Exchange of Hong Kong Limited (“Rulesof SEHK”) applicable from time to time, the above connected transactions shallbe conducted in a 2-step approach: (1) Unicom Group or any of its subsidiariesenters into an agreement on the intended transaction with A Share Company orChina Unicom (BVI) Limited (“Unicom BVI”), identifying the rights andobligations of the 2 parties involved in the transaction under the agreement(including, but not limited to, approval of Unicom Group of the transfer of therights and obligations of A Share Company or Unicom BVI under the agreement toRed-chip Company or any of its subsidiaries); (2) A Share Company or Unicom BVItransfers its rights and obligations under the above mentioned agreement to Red-chipCompany or any of its subsidiaries;

 

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(3)                                  According to theagreements set in the memorandum about the connected transaction, Unicom Group,Unicom New Guoxin and A Share Company signed the Operator-based ComprehensiveServices Agreement (“old Comprehensive Operator Services Agreement”) onNovember 20, 2003. A ShareCompany signed the Transfer Agreement on the Operator-based ComprehensiveServices Agreement with China Unicom CorporationLimited (“CUCL”), Unicom New WorldTelecommunications Corporation Limited (‘Unicom New World”) and UnicomNew Century Telecommunications Corporation Limited (“Unicom New Century”) at thesame date, which indicated that its rights and obligations under the oldComprehensive Operator Services Agreement are hereby transferred to CUCL,Unicom New Century and Unicom New World. Accordingly Unicom Group and UnicomNew Guoxin provide CUCL, Unicom New Century and Unicom New World with cellular subscriber value-added services,“10010/10011” customer services and agency services.

 

(4)                                  CUCL assimilated andmerged with Unicom New Century on July30, 2004, and the rights and obligations of Unicom New World under the oldComprehensive Services Agreement II have been inherited by CUCL. TheMinistry of Commence has approved, pursuant to *MOC’SApproval of the Merging between China Unicom Corporation Limited and Unicom New World Telecommunications Co. Ltd.(*MOC [2005]No.258), of the merging between CUCLand Unicom New World. At present, CUCLis going through the rest of the legal procedures necessary for its mergingwith Unicom New World, upon completionof which Red-chip Company would have CUCL as its sole operating entityin China;

 

Based on the performance andamendment of the old Comprehensive Operator Services Agreement as of the date it entered into force, thetwo Parties, after joint research and consultation on the basis of equality andmutual benefit, have reached the Agreement as follows.

 

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# **1.**                                      Basic Principle

 

1.1                                 Theoperator-based comprehensive services under this Agreement refer to the variousservices and facilities that the Provider in the Agreement provides to theReceiver, based on which the Receiver shall pay the service fees due to theProvider.

 

1.2                                 Theservices and/or the facilities provided by the Provider to the Receiver are thecompensated transactions in the economic activities between enterprises. Pursuantto the fair market principle, the Provider is entitled to collect servicecharges applicable for the services and/or facilities provided to the Receiver.And the Receiver shall make payment accordingly.

 

1.3                                 Theconditions and service quality of the services and/or facilities provided bythe Provider to the Receiver shall be no inferior to those of the same or similarservices and/or facilities provided to any third party.

 

Both parties to the Agreement should abide by the principle of fairtransaction when executing the rights or performing the obligations under theAgreement.

 

1.4                                 Ifthe Provider is required to add services and/or facilities under the Agreement,the Provider shall make such additions as the Receiver requires on abest-effort basis, with conditions no inferior to that of the services and/orfacilities provided to the third party.

 

1.5                                 Ifthe Provider fails to provide or fully provide the services and/or facilities underthis Agreement due to the reasons not attributable to the Provider, theProvider shall notify the Receiver in a timely way and assist the Receiver on abest-effort basis in obtaining the same or similar services and/or facilities throughother channels.

 

1.6                                 Theprovision of services and/or facilities under this Agreement shall conform tothe purposes as the Parties agree to intend for and the related standardsissued by the authorities.

 

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1.7                                 Incase any party to this Agreement breaches any article herein and cause thelosses of the other party, the breaching party shall bear the liabilities forbreach, including but not limited to covering all the direct and indirectlosses arising herefrom. Whereas such a party shall be exempted fromliabilities in case the losses to the other is due to force majeure.

 

1.8                                 Whenany party performs the obligations under this Agreement, the other should provideassistance as is deemed reasonable and necessary.

 

1.9                                 Basedon the prerequisite in Article 1.3 of this Agreement, and in case the chargesraised by the Provider are no higher than that of the third Party, the Receiverwill take the services provided by the Provider as its first choice.

 

1.10                           If in anarea where the Provider provides the services, there is an independent thirdParty who (i) provides service with quality superior to that of the Provider;or (ii) charges less when providing services at the same level, the Receiver isentitled to terminate the relevant services from the Provider in this areaafter notifying the Provider in written form, with no compensation being madeto the Provider.

 

# **2.**                                      The Content of Operator-based Comprehensive Services

 

Please see the following Annexes for theoperator-based comprehensive services provided by the Provider to the Receiverand the concerned agreements:

 

Annex 1 Cellular Subscriber Value-added Services

Annex 2 “10010/10011” Customer Services

Annex 3 Agency Services

 

# **3.**                                      Pricing Principleand Payment

 

3.1                                 Pleasesee the Annexes to the Agreement for the pricing principle and/or charging standardsof the service fees.

 

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3.2                                 Theamounts of service fees under the Agreement shall be calculated according tothe relevant accounting principles in force from time to time in the PRC.

 

3.3                                 Ifthe Parties fail to reach an agreement over the amounts of service fees under thisAgreement, they shall submit it to the competent authority, which will decidethe amounts pursuant the spirit and articles of this Agreement, as well as thenational pricing policies and regulations. And the decision made by thisauthority shall have the final binding force over the Parties.

 

3.4                                 TheReceiver shall make payments due to the Provider in a timely way according tothe pricing principle & standards under this Agreement and its Annexes.

 

3.5                                 Ifthe Receiver fails to pay the related service fees to the Provider as is agreed,the Receiver shall be charged 0.05% of the unpaid amount due to the Provider foreach day overdue. 60 days after the due date, the Provider will notify theReceiver in written form to suspend the related services. If the Receiver failsto pay the said amount 30 days after receiving the written notice, the Providercan declare the immediate termination of the corresponding services. However,the suspension or termination of such services does not affect the rights andobligations already executed or performed by the two Parties under theAgreement.

 

3.6                                 Ineach October, both parties shall review the pricing standards and other articlesfor the next financial year as to each service and facility provided under thisAgreement, and sign a supplementary agreement. If the Parties fail to reach anagreement about the articles set in the supplementary agreement as of theabove-said time, the pricing standards and related articles of that year shallapply for the next financial year before the Parties reach any agreement or thedisputes between them are settled pursuant to Article 3.3.

 

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# **4.**                                      Term

 

4.1                                 ThisAgreement will enter into force as of January 1, 2005 as the conditions underArticle 7 hereinafter are fulfilled. The valid term is 2 years (“Valid Term”).

 

4.2                                 Unless the Receiver notify the Provider inwritten form about terminating the Agreement 60 days in advance, the Agreementshall be extended automatically another Valid Term when the Valid Term or an extended term expires as long as therelevant law, regulations and other regulatory principles apply.

 

# **5.**                                      Statements, Warranties and Promises

 

Each of theparties of this Agreement makes the following statements, undertakings and commitments:

 

5.1                                 That is has the full power and authority(including, but not limited to, approval, permission or license obtained fromrelevant government authorities) necessary to sign this Agreement and itsattachments;

 

5.2                                 That this Agreement and its attachments aredeemed as valid and binding and enforceable pursuant to their terms once signedand sealed as required in this Agreement;

 

5.3                                 That no terms and conditions of thisAgreement, nor those of its attachments, are against the laws and regulationsof the PRC.

 

# **6.**                                      Transfer

 

6.1                                 On the basis of the terms and conditionsestablished in this Agreement and the arrangements made in ConnectedTransactions MoU, the Provider irrevocably agrees the Receiver to transfer itsrights and obligations under this Agreement to the subsidiaries of Red-chipCompany operating business in Mainland China and that the Receiver needs no further consent from Provider fortransfer of its rights and obligations under this Agreement to CUCL.

 

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6.2                                 Once the Receiver has transferred its rights and obligationsunder this Agreement to the subsidiaries of Red-chip Company operating businessin Mainland China, the said subsidiaries shall immediately inherit all of the Receiver’s rights and obligations under thisAgreement and the Receiver shallimmediately terminate the relevant rights and obligations already inherited bythe said subsidiaries.

 

# **7.**                                      Taking Effect

 

This Agreement shall takeeffect as of the date agreed by the parties of the Agreement when the followingrequirements are met:

 

7.1                                 The shareholders’ meeting of A Share Companyapproves of the implementation of this Agreement in line with the laws,regulations and listing rules, as applicable to it.

 

7.2                                 The shareholders’ meeting of Red-chip Companyapproves of the transfer by A Share Company of its rights and obligations underthis Agreement to CUCL in line with the laws, regulations and listing rules, asapplicable to it.

 

# **8.**                                      Force Majeure

 

Should either party failsto fulfill relevant obligations under this Agreement and related attachments inline with the agreed requirements because of unpredictable force majeure eventsthe occurrence and consequences of which can neither be avoided nor overcome,it shall immediately notify the other party and provide within 15 days relevantdetails as well as valid evidence to show that fulfillment of relevantobligations or part of the obligations under this Agreement and relatedattachments is impossible or that fulfillment of such obligations needs to bepostponed. The 2 parties shall negotiate with each other and decide whether tosuspense such obligations, partially exempt the other party from suchobligations or postpone the fulfillment of such obligations on the basis of theextent to which fulfillment of such obligations is affected by the forcemajeure event.

 

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# **9.**                                      Confidentiality

 

Unless otherwisestipulated or required by the law or relevant regulatory authorities, andexcept for the purpose of information disclosure by A Share Company andRed-chip Company to the securities regulatory authority, neither of the 2parties is allowed to provide or disclose materials and information related tothe other party’s business to any company, enterprise, organization orindividual without written permission from the other party.

 

# **10.**                               Non-waiver

 

Unlessotherwise stipulated by the law, failure or delay of either party to exercisethe rights, powers or privileges entitled to it under this Agreement shall notbe deemed as waiver of such rights, powers or privileges, and exercising partof such rights, powersor privileges shall not hamper exercising of such rights, powers or privilegesin the future.

 

# **11.**                               Notification

 

Anynotification related to this Agreement shall be made in written form and sentby one party of this Agreement to the other, either via a special courier, orby fax, or by postal delivery, to the other party. Such notification is deemedas delivered upon delivery via a special courier, or when the sender’s faxmachine indicates that the pages have been transmitted if it is sent by fax, oron the 3rd working day(excluding legal holidays)afterit is mailed. Any notification shall be deemed as valid upon delivery.

 

The addresses of both of the Parties, towhich the notices shall be delivered, are listed below:

 

**UnicomNew Guoxin Telecommunications Corporation Limited**

Recipient: Xiao Baoyu

Address: Rm.873, No.133th, Xidan Bei Avenue,Xicheng District, Beijing

PostalCode: 100032

 

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**ChinaUnited Telecommunications Corporation Limited**

Recipient: Zhao Yilei

Address: 40 floor of JinMao Building, No 88, ShiJi Avenue, Shanghai

Postal Code: 200121

 

# **12.**                               Applicable Law

 

The agreement signed herein shall be subjectto the jurisdiction of laws of the PRC and shall be interpreted and performedaccording to the above-said laws.

 

# **13.**                               Settlementof Disputes

 

Any disputes between the two parties arisingfrom the validity, interpretation or performance shall be settled throughfriendly consultations unless Article 3.3 provides otherwise. In case of thefailure of any consultations within 30 days from the date when any disputesarise, each party is entitled to bring suit in the People’s courts withjurisdiction.

 

# **14.**                               Miscellaneous

 

14.1                           TheOld Comprehensive Operator Services Agreement terminates automatically upon theentering into force of this Agreement.

 

14.2                           AnnexI through Annex III are an integral part of thisAgreement with the equal binding force as the provisions herein. In case anyprovisions in the above-said annexes conflict with those in this Agreement, theannexes shall prevail.

 

14.3                           Asthe two parties agree, each party may revise or make additions to thisAgreement and its annexes. Any revisions or additions shall come into forceupon the signature and seal by the legal representative of each party or anauthorized person acting on his behalf.

 

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14.4                           Ifany provisions in this Agreement and its annexes are determined to benon-compliant or impossible to impose compulsory measures, other provisions inthis Agreement and its annexes shall remain in force and therefore be performedif applicable.

 

14.5                           Thisagreement is made in quadruplication with each party holding two thereof. Thecounterparts have equal validity.

 

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(Signatures Only)

 

 

**Unicom New Guoxin TelecommunicationsCorporation Limited(Seal)**

 

 
| Legal Representative or his authorized  person: | /s/ Cheng Huoming |   |
|-------------------------------------------------|-------------------|--------|

 

 

 

**China United Telecommunications CorporationLimited (Seal)**

 

 
| Legal Representative or his authorized  person: | /s/ Sun Qian |   |
|-------------------------------------------------|--------------|--------|

 

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# **AnnexI: Cellular Subs**criberValue-added Services

 

 

I.                                         ServiceDescription in Brief

 

The Provider,through the operator-based paging service platform, delivers all kinds ofoperator-based comprehensive value-added services to the cellular subscribersof the Receiver defined in this Agreement. The said services include Unicomsecretary services and operator-based SMS value-added services.

 

II.                                     Settlement

 

i.                                          Theactual revenue in cash generated from the value-added services described hereindelivered to the Receiver shall be shared between the respective subsidiariesof the Receiver and the Provider at a ratio of 4:6. This revenue sharing ratioshall be no higher than the average ratio the Receiver offers to any othervalue-added service Providers (CP/SP) in the same area, which are independentof the Provider.

 

ii.                                       Theaccounts shall be settled according to the billing materials of the Receiver.

 

iii.                                    Bothparties agree that their respective subsidiaries or branches involved shallmake monthly settlement directly in compliance with the settlement arrangementdefined herein.

 

III.                                 Obligations

 

i.                                          Incase any party is engaged in network construction, including but not limited tonetwork expansion or upgrade, the party shall inform the other six months priorto any possibilities occurring to influence the obligations to be performedunder this annex.

 

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ii.                                       Eachparty shall maintain their networks to ensure the routine operation of thewhole networks according to the related regulations promulgated from time totime by the competent authority.

 

iii.                                    Inthe absence of the consent of the other, no party is allowed to recklesslyinterrupt the communication necessary for the service delivery under thisannex. In the case of interruption or severely blocked communication, eachparty shall take effective measures for remedy.

 

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# **AnnexII: 10010/**10011Customer Services

 

 

I.                                         ServiceDescription in Brief

 

The Provider,through its 10010/10011 service platform, provides the Receiver withoperator-based customer services, including service consulting, telephony billinquiry, service acceptance, complaint handling (“10010 Basic Service”) as wellas customer interview and customer retention (“10010 Value-Added Service”) andcharges the Receiver accordingly.

 

II.                                     SettlementStandard

 

i.                                          Thesettlement standard for the services under this annex is, cost of customerservices mentioned above plus profit-to-cost ratio, which is no higher than10%.

 

ii.                                       Theabove-said cost of customer services will be calculated as follows, cost peroperator seat is multiplied the number of actual and effective seats.

 

a) The cost per operator seat in economicallydeveloped metropolises, such as Beijing and Shanghai, shall be the actual costper operator seat (as defined below) in such area for the previous year. Thecost per operator seat in areas apart from those economically developedmetropolises shall be the lower of the actual cost per operator seat in thesame area and the nationwide (excluding Beijing and Shanghai) average of actualcost per operator seat plus 10%, in each case, for the pervious year.

 

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The actual cost per operator seat consists ofwages, administration expenses, operation and maintenance expenses, equipmentdepreciation and premises leasing fees attributable to “10010” customerservice. The actual cost per seat in a certain area shall be the product ofdividing the total cost of “10010/10011” customer services in this area of theprevious year by the average number of monthly operator seats of the previousyear, which shall be confirmed by the audit report prepared by an externalaudit firm. The said auditing report and relevant supporting documents shall besubmitted to the auditor hired by the Receiver.

 

b)  Howto determine the actual number of effectively operating seats: the Providershall provide the number of previous-month seats to the Receiver before thetenth day of each month. And the Receiver shall confirm the number as isprovided within 5 working days based on the criteria for the customer servicecenter as set out in the Service Standard for Telecommunication Operations (ForTrial Implementation) published by the MII. And the number of effectivelyoperating seats will be subject to the final confirmation by the Receiver.

 

3.                                       Bothparties agree that their respective subsidiaries or branches involved shallmake monthly settlement directly in compliance with the settlement arrangementdefined herein.

 

IV.                                 Obligations

 

i.                                          TheProvider, as is required by the Receiver, shall add seats for operator-basedservice or enrich the service contents if appropriate, including but notlimited to providing seats exclusively for 10010 value-added services if theReceiver instructs as such in written format. As how todetermine the cost per seat, the Article II (a) shall apply.

 

ii.                                       TheReceiver shall keep the Provider updated about the new services available toits cellular subscribers and shall provide the information about all kinds ofservices delivered to its cellular subscribers as is required by the Provider.

 

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iii.                                    Inthe absence of the consent of the other, no party is allowed to recklesslyinterrupt the communication necessary for the service delivery under thisannex. In case of the interruption or severely blocked communication, eachparty shall take effective measures for remedy.

 

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# **AnnexIII: Ag**encyServices

 

 

I.                                         ServiceDescription in Brief

 

The Providerconducts products/services promotion and marketing activities to the customersif the market calls for it and the Receiver requires the services on theinitiative of the Provider.

 

II.                                     SettlementStandard

 

The service standard for the Provider shallbe no inferior to that of any independent third party agency whohelps to expand the subscriber base of the Receiver in the same area. And thecommissions the Provider charges the Receiver shall be no higher than theaverage commissions such independent third party agency in the same areacharges the Receiver.

 

III.                                 OtherIssues on Settlement

 

a)                                      Theaccounts shall be settled according to the billing materials of the Receiver.

 

b)                                     Bothparties agree that their respective subsidiaries or branches involved shallmake monthly settlement directly in compliance with the settlement arrangementdefined herein.

 

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