Unicom profit dives 42%

Fiona Chau
31 Aug 2009
00:00

China Unicom’s profit fell 42.1% in the first half, a result of stronger competition and company restructuring, the carrier said Friday.

Net income was 6.62 billion yuan($968 million), compared with 11.4 billion yuan last year, as sales shrank 4.3% to 76.3 billion yuan.

Chairman and CEO Chang Xiaobing said the restructuring of the mainland telecom industry and the issuance of 3G licenses had made the competition environment “increasingly complicated.”

Mobile revenue grew 5.7%, as the company added over 7 million new GSM users to take its total to 140.4 million subscribers. ARPU declined 4.3% to 41.7 yuan.

The fixed-line business, which has been in decline for the last two years, shrank 9.7% as it lost 1.1 million lines. Voice sales dropped 19.3% to 24.2 billion yuan and fixed-line ARPU declined 13.5% to 60.2 yuan.

This was partly offset by expansion in the broadband business, which grew 9% to 15.3 billion yuan and added another 4.8 million customers.

The company will spend 38.7 billion yuan this year on 3G, of which 19.93 billion yuan were used to expand its 3G network and marketing in the first half.

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