China Unicom 1H net jumps 26% on mobile data growth

Fiona Chau
08 Aug 2014

China Unicom said its first-half net profit jumped 25.8% from a year earlier, boosted by strong growth in 3G and 4G subscriptions and lower interconnection fees paid to China Mobile.

Net profit for the six months ended June 30 rose to 6.69 billion yuan ($1.08 billion) from 5.32 billion yuan in 2013. Revenue rose 3.6% to 149.57 billion yuan.

Mobile service revenue grew 11.7% to 81.34 billion yuan, with 3G and 4G revenue climbing 33% to 54.38 billion yuan.

The number of 3G and 4G subscribers rose 40.8% to 140.8 million, accounting for 47.7% of its total mobile subscriber base of 295 million. But APRU (for 3G & 4G) fell from 77.60 yuan in 1H13 to 68.70 yuan as of June 30.

Handset subsidy costs (for 3G and 4G smartphones) fell 21% to 3.33 billion yuan from a year earlier, as the ratio of handset subsidies to total mobile service revenue fell to 6% from 10% a year earlier.

China Unicom chief executive Chang Xiaobing said the company expects to slash spending on subsidizing smartphones in the second half of the year, including the new iPhone 6 – which Apple is reportedly due to launch next month.

“Currently there is a wide array of high-end smartphones available in the market, there is no need to increase subsidies, and, like other smart phones, we will gradually reduce subsidies ratio [for the iPhone],” Chang told a media briefing in Hong Kong.

Chang’s comment comes as the State-owned Assets Supervision and Administration Commission of the State Council requested last month that China Mobile, Unicom and China Telecom slash marketing expenses to the tune of over 40 billion yuan over the next three years.

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