Unicom profit falls 22.5% in 9M15

telecomasia.net

China Unicom said its profit for the first nine months of the year fell 22.5% to 8.18 billion yuan ($1.29 billion), dragged down by changes to China's tax policy and an underperformance in the 4G market.

Service revenue fell 3.8% to 179.8 billion yuan, with mobile revenue down 8% to 109.5 billion yuan. Fixed line revenue by contrast grew 3.4% to 69.2 billion yuan.

China's move to replace an existing 3% business levy on telecom services with a value added tax (VAT) contributed to the decline in profit and mobile revenue, the company disclosed.

Unicom's total mobile subscriber base meanwhile fell 3.2% year-on-year by the end of September to 287.6 million.

The South China Morning Post quotes Bernstein senior analyst Chris Lane as stating that the firm believes that China Unicom's financial woes are also in part due to a flawed 4G deployment strategy.

He said Unicom has been attempting to go head to head with the far more deep-pocketed China Mobile in terms of coverage area, in contrast with China Telecom, which has focused on providing high-quality 4G services in a relatively few urban areas.

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