China Unicom, the country’s second largest mobile operator, issued a positive profit alert, with brisk service revenue growth and lower expenses expected to drive a 155 per cent jump in its net profit for the first nine months of 2017.

The operator’s preliminary results forecast net profit of CNY4.1 billion ($616 million) on service revenue of CNY187.9 billion, up 4.1 per cent year-on-year. Mobile service turnover is expected to increase 6.7 per cent to CNY117 billion.

In a statement the company said its strategy “centred on scale and profitable development though promotion, cost control and mechanism reform”, with the expected profit growth helped by lower selling and marketing expenses and handset subsidies.

According to Jefferies Hong Kong, the level of profit would be China Unicom’s highest in the past seven quarters and would come despite the one-month impact of a government mandated cut in domestic long-distance and roaming fees from 1 September.

Unicom said it added 55.73 million 4G subscribers in the January to September period to take its total to 160 million. September net 4G adds reached 7.56 million, its highest in 2017. Its total subcriber base rose by 13 million to 277 million.

4G penetration stood at 57.9 per cent at end-September, compared to 68.7 per cent for China Telecom and 70.6 per cent for China Mobile (both end-August figures).

Jefferies forecasts China Unicom’s Q4 profit will drop due to the full-quarter impact of the tariff cuts and traditionally heavy promotions in the final quarter.