China Unicom suffers drop in profit as subs, revenue fall - Mobile World Live

China Unicom suffers drop in profit as subs, revenue fall

18 MAR 2016

China’s second largest operator China Unicom suffered a series of setbacks last year, with its mobile user base dropping 5.4 per cent, net profit down 12.4 per cent and mobile service revenue falling 8 per cent.

The operator, with 252 million connections by the end of 2015 (down from 266 million the year before), said in a statement it was “facing the complex changes in the business environment and stiff challenges, including speed upgrades and tariff reductions, one-month data carry-over, the replacement of business tax with VAT, and intensifying competition”.

The company’s net profit, which includes a CNY9.25 billion gain on the transfer of telecoms towers and related assets to China Tower, slid to CNY10.6 billion ($1.63 billion). Its EBITDA declined 5.7 per cent year-on-year to CNY87.5 billion.

Overall revenue fell 2.7 per cent to CNY277 billion, while service revenue dropped 3.9 per cent to CNY235 billion. Mobile service revenue declined to CNY142.6 billion. Non-voice business accounted for 69 per cent of service revenue, up from 62 per cent in 2014.

Monthly blended ARPU dropped 7.5 per cent to CNY40.8, and its mobile subscriber base declined by 14.26 million to 252.3 million in 2015.

4G growth
On the positive side, its 4G subscribers reached 44 million, up from less than two million at the end of 2014, and accounted for 17.5 per cent of its total. Average monthly mobile data usage jumped from 137MB a month in 2014 to 231MB last year.

Its fixed-line broadband revenue grew 7.5 per cent year-on-year to CNY54 billion, and fixed-line broadband subscribers increased by 5 per cent to 72.3 million, with FTTH users accounting for more than 50 per cent of the total.

China Unicom said the sharing of tower assets among operators “will promote a quick and efficient 4G network rollout” while reducing capex by an estimated CNY59 billion. It transferred 164,000 towers to China Tower. The company expects to benefit from the future earnings of the tower company and is currently negotiating rental fees with China Tower.

Last year it spent CNY133.9 billion on capex and added 306,000 4G base stations, taking its 4G total to 399,000.

Wang Xiaochu, China Unicom chairman and CEO, said 2016 “marks the beginning of the all-round implementation of our Focus Strategies, and the fostering of innovation and cooperation”. The company said it will focus on driving 4G migration to turn around its mobile business.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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