China Unicom FY15 profit falls 12% due to competition

17 Mar 2016

Wang added Unicom had nearly 55 million 4G subscribers by the end of February and the operator aims to migrate current 2G and 3G users into 4G networks this year.

During 2015, the company also disposed off its towers and related assets and recognized a gain on disposal before taxes of 9.3 billion yuan. Despite a one-off gain on tower disposals, the tower usage fee is expected to bring short-term financial pressure to the company.

“Currently, the company is still negotiating with China Tower Company on the usage fee. According to the China Tower's proposal, the main principal for determining usage fee is cost plus method. Tower usage fee in 2015 was estimated to be 2.9 billion,” Wang said.

“According to internal estimate, savings in depreciation and network maintenance in 2015 was around 80% of the tower usage fee. We hope that China Tower will strengthen cost control and strive to improve operating efficiency and tower sharing.”

Looking forward, Wand said “the company will leverage opportunities, focused strategies, innovation and cooperation to drive greater turnaround with full strength.”

To improve cash flows, Unicom will keep its capex within 75 billion yuan this year, sharply down from last year's 133.88 billion yuan.

Biggest rival China Mobile will announce its 2015 financial results today, while China Telecom on March 23.


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