China Unicom 1H profit jumps 31.9%

China Unicom 1H profit jumps 31.9%

Staff writer  |   August 24, 2012
telecomasia.net
China Unicom said Thursday its first half net profit rose 31.9%, thanks to strong revenue growth from its mobile business due to its swelling 3G subscriber base.
 
Net profit for the six months ended June 30 surged to 3.43 billion yuan ($539.8 million) from a restated 2.62 billion yuan a year earlier, outperforming rivals China Mobile and China Telecom. China Mobile reported that its net profit grew only 1.5% over the same period, while China Telecom’s net profit fell 8.3% on hefty subsidies on iPhone.
 
Revenue rose 20% on year to 121.69 billion yuan from a restated 101.42 billion yuan. Mobile service revenue jumped 23.4% to 60.5 billion yuan during the period, 44.5% or 26.9 billion yuan of which were from 3G service - up 140% from a year earlier.
 
China Unicom chairman and CEO Chang Xiaobin attributed the strong 3G revenue growth to a substantial increase in the penetration of cheaper 3G smartphones, which helped the company trim subsidy costs and reduce its reliance on Apple.
 
According to the company statics, 67.9% of all the W-CDMA smartphones China Unicom sold during the first half were priced below 2,000 yuan, while 19.2% were priced between 2,000-4,000 yuan and only 12.9% cost more than 4,000 yuan.
 
Chang said that 3G penetration in China is currently at a paltry 16% - far behind more developed countries, where 3G penetration is often higher than 60% - and expected growth in 3G users to pick up in the second half.
 
The company spent 3.52 billion yuan on handset subsidies in the first half, compared with 3.06 billion a year earlier. China Unicom president Lu Yimin said the amount of handset subsidies will increase in the second half, while the subsidies as a proportion of revenue will fall.
 
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