##### 



Exhibit 4.38
 THIS AGREEMENT
 BETWEEN
 (1)
    
    UNICOM NEW HORIZON MOBILE TELECOMMUNICATIONS COMPANY LIMITED, a limited liability company
incorporated under the laws of the PRC whose registered office is at 6th Floor,
Tower 3, Henderson Centre, 18 Jianguomen Nei Dajie, Beijing, the PRC (the Lessor);
 (2)
    
    CHINA UNITED TELECOMMUNICATIONS CORPORATION LIMITED, a limited liability company incorporated
under the laws of the PRC whose office is at 40th Floor, Jin Mao Tower, 88 Century
Boulevard, Shanghai, the PRC (the Lessee, and upon execution of the Transfer Agreement, as
defined in clause 1.1 below, the Lessee shall be changed to CUCL, as defined in clause 1.1
below); and
 (3)
    
    CHINA UNITED TELECOMMUNICATIONS CORPORATION, a company incorporated under the laws of the PRC
whose registered office is at Room 615, Tower 3, Henderson Centre, 18 Jianguomen Nei Dajie,
Beijing, the PRC (Unicom Group).
 WHEREAS
   Old CDMA Lease Agreement
    IT IS AGREED




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Interpretation
 Definitions
  Additional Term
 Agreement
 Annual Lease Fee
 Associate
 Business Day
 Capacity
 CDMA
 CDMA Business
 CDMA Business Income
 CDMA Business Profit before Taxation Hong
Kong Financial Reporting Standards
 China Unicom
 Conditions
 CUCL
 Page 2




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Equipment
 Force Majeure Event
 Government Entity
  (b)
    
    any instrumentality, board, commission, court, or agency of any thereof, however constituted;
and
 (c)
    
    any association, organization, or institution of which any of the above is a member or to
whose jurisdiction any thereof is subject or in whose activities any of the above is a
participant;
 HKSE
 Lease Fee
 Lessor Lien
 Listed Group
 Listed Service Areas
 Listing Rules
 MII
 Minimum Lease Fee
 Network
 Page 3




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Network Construction Cost
 Old Operating Entities
 Phase
 PRC
 Purchase Option
 Purchase Price
 Quarter
 Quarterly Lease Fee
 RMB
 Security Interest
 SSE
 Subscriber
 subsidiary
  (b)
    
    of which another has direct or indirect control or owns directly or indirectly more than 50
per cent. of the voting share capital;
 Page 4




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Transfer Agreement
 Unicom New Century
 Unicom New World
  (a)
    
    the headingsare inserted for convenience only and shall not affect the construction of this
Agreement;
 gender
 parties
 clauses schedules
 (e)
    
    words and phrases indicating the singular shall, where the context so admits, include the
plural and vice versa.
  Lease of Network Capacity
     Page 5




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Conditions
  (a)
    
    the Lessor and the Lessee having obtained all necessary approvals (regulatory or otherwise)
to perform their respective obligations under this Agreement;
 (b)
    
    the passing of resolutions by the shareholders of the Lessee approving this Agreement at an
extraordinary general meeting convened for such purpose;
 (c)
    
    the passing of resolutions by the shareholders of China Unicom (other than Unicom Group and
its Associates, who shall abstain from voting in connection with the resolutions) approving
the Transfer Agreement at an extraordinary general meeting convened for such purpose; and
 (d)
    
    all other conditions precedent contained in the Transfer Agreement having been fulfilled or
waived.
 Term
    Additional Term
 Capacity
 Increase in Capacity
  (a)
    
    to improve the quality and quantity of the CDMA services provided by the Lessee to meet the
required industry standards;
   Page 6




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Failure in Making Available the Capacity
  (a)
    
    the nature of the event or circumstances and whether they have arisen as a result of any of
the causes set out in clause 5.5;
 (b)
    
    a description of the steps, if any, which the Lessor has identified are necessary to rectify
the matter or capable of bringing the Capacity into operational service as soon as
practicable; and
 (c)
    
    the likely effect of the event or circumstances on the CDMA services to be provided by the
Lessee, including the number of CDMA Subscribers potentially affected.
  Delay Discount
 DelayDiscount
    
    =
    
    the Number of CDMA
Subscribers of the Lessee
being Affected by the Delay
    
    ×
    
    Period of Delay
(number of days)
    
    ×
    
    ARPU of CDMA Subscribers
the number of days
in the relevant month
    (b)
    
    any material breach by the Lessee of any of its material obligations under this Agreement
which prevents the Lessor from performing the relevant obligation under this Agreement; or
 Page 7




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(c)
    
    compliance with any applicable law, the mandatory requirements of any Government Entity or
any other applicable statutory regulations;
  Lease fee
      Quarterly Lease Fee
   Page 8




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(a)
    
    in the event that the Lease Fee of any year calculated on the basis of the audited CDMA
Business Income as set out in the audited financial report and on the basis of the final Lease
Fee percentage as determined according to clause 6.1 above (the Annual Lease Fee) is greater
than the total Quarterly Lease Fee paid by the Lessee for that year, the Lessee shall pay the
difference to the Lessor as soon as practicable;
 (b)
    
    in the event that the Annual Lease Fee is less than the total Quarterly Lease Fee paid by the
Lessee in that year, the Lessor shall refund the difference to the Lessee as soon as
practicable,
   Payment
    Procurement and Construction of the Network
   Page 9




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Revenue and Costs of Management, Operation and Maintenance
     total amount of Capacity constructed on the Network
    
    -
    
    the actual number of the Lessees cumulative CDMA (Subscribers as at the end of the month before the Costs are incurred )90
    %total amount of Capacity constructed on the Network
  Subscribers as at the end of the month before the Costs are incurred
 
  Page 10




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Risk and Title
    Responsibilities of the Parties
 Lessors Responsibilities
  (a)
    
    obtain and maintain all necessary government and other approvals, authorisations, licences
and other documents necessary or desirable for the construction, operation, maintenance and
upgrading of the Network;
 (b)
    
    obtain all PRC approvals and permits for the import of all equipment and technology, other
supplies and installation services required for the construction, operation of the Network,
and to use best endeavours to obtain and maintain favourable customs duties;
 (c)
    
    obtain all necessary funding for the construction and expansion of the Network in accordance
with the Lessees requirements;
 (d)
    
    ensure that each Phase of the Network is constructed in accordance with construction
timetable agreed by the Lessor and the Lessee;
   (g)
    
    use best endeavours to ensure that the Network quality standards shall meet the standards
agreed by the Lessor and Lessee;
 (h)
    
    upon request by the Lessee to upgrade the software or hardware of the Network, to use best
endeavours to satisfy the request as soon as possible;
 (i)
    
    make available to the Lessee during the term the benefit of all manufacturers warranties in
relation to the Equipment and other product support;
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(j)
    
    unless agreed in writing with the Lessee and Unicom Group, refrain from leasing or selling
any part of the Network to any third party, or permitting any third party to use or operate
the Network in any manner to provide telecommunications services, except conducted as
contemplated in the Transfer Agreement;
 (k)
    
    without the prior written consent of the Lessee, not use or operate the Network in any manner
to provide telecommunications services to any third party, or to compete in any other manner
with the Listed Group, except conducted as contemplated in the Transfer Agreement; and
 (l)
    
    in the event of a breakdown of any part of the Network, provide the Lessee with all necessary
cooperation, including liaising with Equipment suppliers and coordinating relevant parties.
 Lessees Responsibilities
  (a)
    
    promptly notify the Lessor of any event of loss or any event which is likely to result in an
insurance notification claim;
 (b)
    
    provide the Lessor with such information concerning the condition, use and operation of the
Network as the Lessor may from time to time reasonably request;
 (c)
    
    permit the Lessors representatives to inspect the Network during normal working hours, upon
reasonable notice;
 (d)
    
    be responsible for the maintenance and safety of the Network and maintenance of all databases
in relation to the Network;
 (e)
    
    permit the Lessor to use such of its premises as are reasonably required by the Lessor for
the purpose of complying with its obligations under this Agreement;
 (f)
    
    refrain from subleasing any part of the Network or assigning its rights under the lease to
any party other than a member of the Listed Group, except conducted as contemplated in the
Transfer Agreement; and
 (g)
    
    in accordance with market requirements and subscriber demand, use all reasonable efforts to
promote and advertise the CDMA Business in the Listed Service Areas.
 Unicom Groups Responsibilities
  Page 12




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(a)
    
    obtain and maintain all necessary government and other approvals, authorisations, licences
and other documents necessary or desirable for the construction, operation, maintenance and
upgrading of the Network; and
 (b)
    
    establish and maintain roaming and interconnection arrangements with other telecommunications
operators.
 Representations and Warranties
 Representations and Warranties of the Lessee
  (a)
    
    Status: It is a limited liability company duly incorporated and validly existing under the
laws of the PRC and has the corporate power to own its assets and carry on its business as it
is being conducted;
 (b)
    
    Power and authority: It has the corporate power to enter into and perform, and has taken all
necessary corporate action to authorise the entry into, performance and delivery of, this
Agreement and the transactions contemplated by this Agreement;
 (c)
    
    Legal validity: This Agreement has been duly authorised, executed and delivered by the
Lessee, and this Agreement constitutes legal, valid and binding obligations of the Lessee,
enforceable in accordance with its terms;
 (d)
    
    Non-conflict: The entry into and performance by the Lessee of, and the transactions
contemplated by, this Agreement do not and will not (i) conflict with the constitutional
documents of the Lessee; or (ii) conflict with or result in default under any document which
is binding upon the Lessee or any of its assets nor result in the creation of any Security
Interest over any of its assets;
 (e)
    
    Authorisation: All authorisations, consents, registrations and notifications required by the
Lessee in connection with the entry into, performance, validity and enforceability of, this
Agreement and the transactions contemplated by this Agreement, have been obtained or effected
(as appropriate) and are in full force and effect;
 (f)
    
    No immunity: The Lessee is subject to civil commercial law with respect to its obligations
under this Agreement; and neither Lessee nor any of its assets is entitled to any right of
immunity, and the entry into and performance of this Agreement by the Lessee constitute
private and commercial acts; and
 (g)
    
    Litigation: No litigation, arbitration or administrative proceedings are pending or
threatened against Lessee which, if adversely determined, would have a material adverse effect
upon the Lessees financial condition or business or its ability to perform its obligations
under this Agreement.
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Representations and Warranties of the Lessor and Unicom Group
  (a)
    
    Status: The Lessor is a company duly incorporated and validly existing under the laws of the
PRC and has the corporate power to own its assets and carry on its business as it is now being
conducted;
 (b)
    
    Power and authority: The Lessor has the corporate power to enter into and perform, and has
taken all necessary corporate action to authorise the entry into, performance and delivery of,
this Agreement and the transactions contemplated by this Agreement;
 Legal validity
 (d)
    
    Non-conflict: The entry into and performance by the Lessor of, and the transactions
contemplated by, this Agreement do not and will not conflict with: (i) any laws binding on the
Lessor; or (ii) the constitutional documents of the Lessor; or (iii) any document which is
binding upon the Lessor or any of its assets;
 (e)
    
    Authorisation: So far as concerns the obligations of the Lessor, all authorisations,
consents, registrations and notifications required under the laws of the PRC in connection
with the entry into, performance, validity and enforceability of, and the transactions
contemplated by, this Agreement by the Lessor have been obtained or effected (as appropriate)
and are in full force and effect;
 (f)
    
    No breach: The use of the Network by the Lessee in accordance with this Agreement will not
cause the Lessee to breach any law, regulation, direction, permission, waiver, consent,
registration, approval or other authorisation; and
 (g)
    
    No immunity: The Lessor is subject to civil commercial law with respect to its obligations
under this Agreement; and neither the Lessor nor any of its assets is entitled to any right of
immunity, and the entry into and performance of this Agreement by the Lessor constitute
private and commercial acts.
 Representations and Warranties of Unicom Group
 12.3
    
    Unicom Group also represents and warrants to the Lessee that:
 (a)
    
    Status: Unicom Group is a company duly incorporated and validly existing under the laws of
the PRC and has the corporate power to own its assets and carry on its business as it is now
being conducted;
 (b)
    
    Power and authority: Unicom Group has the corporate power to enter into and perform, and has
taken all necessary corporate action to authorise the entry
 Page 14




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into, performance and delivery of, this Agreement and the transactions contemplated by this
Agreement;
 (c)
    
    Legal validity: This Agreement constitutes Unicom Groups legal, valid and binding
obligation;
 (d)
    
    Non-conflict: The entry into and performance by Unicom Group of, and the transactions
contemplated by, this Agreement do not and will not conflict with: (i) any laws binding on
Unicom Group; or (ii) the constitutional documents of Unicom Group; or (iii) any document
which is binding upon Unicom Group or any of its assets;
 (e)
    
    Authorisation: So far as concerns the obligations of Unicom Group, all authorisations,
consents, registrations and notifications required under the laws of the PRC in connection
with the entry into, performance, validity and enforceability of, and the transactions
contemplated by, this Agreement by Unicom Group have been obtained or effected (as
appropriate) and are in full force and effect;
 (f)
    
    CDMA Licence: Unicom Groups CDMA licence (Licence No. [2001] Yi Zi No. 01) issued by the MII
dated 1 August 2001 is in full force and effect and there are no circumstances which indicate
that such licence will or is likely to be revoked, in whole or in part. In accordance with
applicable PRC laws and regulations, Unicom Group is permitted to authorise the Lessee to
provide CDMA mobile telecommunications services by using the Network; and
 (g)
    
    No immunity: Unicom Group is subject to civil commercial law with respect to its obligations
under this Agreement; and neither Unicom Group nor any of its assets is entitled to any right
of immunity, and the entry into and performance of this Agreement by Unicom Group constitute
private and commercial acts.
 Purchase Option
 Purchase Option Purchase Option Notice
 Purchase Option Notice
 Page 15




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Purchase Price
     Insurance
    Page 16




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Network Maintenance
  (a)
    
    take all necessary or desirable steps to safeguard all parts of the Network and keep the
Network in good repair and condition, subject to fair wear and tear; and
 (b)
    
    maintain the Network in accordance with the generally accepted best practice of other mobile
telecommunications operators in the PRC.
   Performance Guarantee and Indemnity
   Page 17




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Confidentiality
  (a)
    
    in connection with any proceedings arising out of or in connection with this Agreement to the
extent that any party may consider necessary to protect its interests; or
 (b)
    
    if required to do so by an order of a court of competent jurisdiction whether in pursuance of
any procedure for discovering documents or otherwise or pursuant to any law or any regulation
of any stock exchange or securities regulatory authority; or
   (e)
    
    if required to do so by any applicable law or in order for such party to comply with its
obligations under this Agreement.
 17.2
    
    Nothing contained in clause 17.1 shall preclude the Lessee from disclosing to any member of
the Listed Group any information, document or other materials relating to this Agreement.
 Force Majeure
 Affected Party
 (a)
    
    the Affected Partys obligations under this Agreement are suspended from the time of
notification of the event in accordance with clause 18.1(b) while the Force Majeure Event
continues, but only to the extent that it is so prevented, hindered or delayed;
 (b)
    
    immediately after the occurrence of the Force Majeure Event the Affected Party shall promptly
notify the other parties in writing of the Force Majeure Event, the time and date on which the
Force Majeure Event started and the effects of the Force Majeure Event on its ability to
perform its obligations under this Agreement;
 Page 18




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(c)
    
    the Affected Party shall take all reasonable endeavours to mitigate the effects of the Force
Majeure Event on the performance of its obligations under this Agreement; and
 (d)
    
    immediately after the end of the Force Majeure Event, the Affected Party shall notify the
other parties in writing that the Force Majeure Event has ended and the duration of the Force
Majeure Event, and shall resume performance of its obligations under this Agreement.
 Termination
       Redelivery
  (a)
    
    the Network shall be returned free and clear of all Security Interests (other than Lessor
Liens);
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(c)
    
    all damage to the Network shall have been repaired and certified in accordance with the
requirements of the relevant Equipment manufacturer.
 Notices
    (c)
    
    in the case of prepaid recorded delivery, special delivery or registered post, at 9 a.m. on
the second Business Day following the date of posting
    LessorAddress:
    
    6th Floor, Tower 3, Henderson Centre, 18 JianguomenNei Dajie, Beijing, 100005, PRCFax:
    
    +86 10 6611 0768For the attention of:
    
    Zhao LeLesseeAddress:
    
    40th Floor, Jin Mao Tower, 88 Century Boulevard,Shanghai, the PRCFax:
    
    +86 10 6650 4066For the attention of:
    
    The Directors
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Unicom GroupAddress:
    
    Room 615, Tower 3, Henderson Centre,18 Jianguomen Nei Dajie, Beijing, the PRCFax:
    
    +86 10 6611 4366For the attention of:
    
    Li Zhang Ting
   (b)
    
    if no date is specified or the date specified is less than five Business Days after the date
on which notice is given, the date following five Business Days after notice of any change has
been given.
 Assignment and Sub-Contracting
   Severability
  Further assurance
  Page 21




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Costs
   Waivers and Variations
    Entire Agreement
  Settlement of Disputes
    Page 22




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CIETAC
     Language
  IN WITNESS
 Page 23




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By:
    
    /s/ Zhao LeName:
    
    Zhao Le
  By:
    
    /s/ Sun QianName:
    
    Sun Qian
  By:
    
    /s/ Chang XiaobingName:
    
    Chang Xiaobing




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SCHEDULE 1
 Quarterly CDMA Business Income
 Breakdown of CDMA Business Income (Note 1 )
 Prepared by: Provincial Branch
    
    Unit of Amount: RMBAmount forthe currentItems
    
    Rows
    
    quarter
    
    NoteTotal Service Revenues
from Business
    
    1=2+3+4+5+6+7-8
    
    
    
    Formula for calculating the CDMA network lease fee referred to in row 11:1. Monthly fee
    
    2
    
    
    

(1) assuming that under PRC GAAP, revenues generated by CUCL from its business (row 1) equals to A;2. Usage fee
    
    3
    
    
    

(2) CDMA network lease fee payable to Unicom Horizon, i.e. revenues generated by Unicom Horizon from its business equals to B;3. Revenue from value-added services
    
    44. Interconnection revenue
    
    5
    
    
    

(3) under the connected transaction agreements, the settlement represents R% of the operating revenue calculated in accordance with HK GAAP; and5. Business revenues from digital circuits and leased lines
    
    6
    
    
    

(4) under HK GAAP, the business revenues generated by CUCL equals to C.6. Others
    
    7
    
    
    
    C = A - (A-B)*3%Business Tax
    
    8
    
    
    
    Formula : B = C*R%= [A - (A-B)*3%]*R%Costs incurred by Principal Business
    
    9
    
    
    
    Where: B=[A*(1-3%)] / (1/R%-3%)......
    
    10In which, CDMA network lease fee payable to Unicom Horizon
    
    11
 
 Note1
    
    The monthly breakdown of the consolidated
income statement prepared by China Unicom Limited in accordance with the Hong
Kong Financial Reporting Standardsissued by the Hong Kong Institute of
Certified Public Accountants does not contain any deferral or amortisation of
any upfront non-refundable revenue arising out of the CDMA business.




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26 October 2006
 UNICOM NEW HORIZON MOBILE TELECOMMUNICATIONS
COMPANY LIMITED
 and
 CHINA UNITED TELECOMMUNICATIONS
 CORPORATION LIMITED
 and
 CHINA UNITED TELECOMMUNICATIONS CORPORATION
 
 NETWORK CAPACITY LEASE
AGREEMENT




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CONTENTS
 CLAUSE
    
    PAGE1. Interpretation
    
    
    22. Lease of Network Capacity
    
    
    53. Conditions
    
    
    64. Term
    
    
    65. Capacity
    
    
    66. Lease fee
    
    
    87. Payment
    
    
    98. Procurement and Construction of the Network
    
    
    99. Revenue and Costs of Management, Operation and Maintenance
    
    
    1010. Risk and Title
    
    
    1111. Responsibilities of the Parties
    
    
    1112. Representations and Warranties
    
    
    1313. Purchase Option
    
    
    1514. Insurance
    
    
    1615. Network Maintenance
    
    
    1716. Performance Guarantee and Indemnity
    
    
    1717. Confidentiality
    
    
    1818. Force Majeure
    
    
    1819. Termination
    
    
    1920. Notices
    
    
    2021. Assignment and Sub-Contracting
    
    
    2122. Severability
    
    
    2123. Further assurance
    
    
    2124. Costs
    
    
    2225. Waivers and Variations
    
    
    2226. Entire Agreement
    
    
    2227. Settlement of Disputes
    
    
    2228. Language
    
    
    23SCHEDULE 1
    
    
    25