China Unicom looks to 5G to drive top-line growth - Mobile World Live

China Unicom looks to 5G to drive top-line growth

23 MAR 2020

China Unicom outlined plans to drive growth this year, after declines in data revenue and ARPU led to a drop in mobile service turnover in 2019.

In a statement, chairman and CEO Wang Xiaochu, said the company was challenged by the complex internal and external environment and continued to face pressure in revenue growth during 2019.

At the same time, he said, it boosted its capabilities with targeted investments in 5G and new businesses to capture opportunities to drive a gradual recovery in overall service revenue.

Net profit rose 11.1 per cent year-on-year to CNY11.3 billion ($1.59 billion), attributed mainly to effective cost control relating to customer acquisition, and eliminating low-value products and channels.

Total service revenue was flat at CNY264 billion (up 0.3 per cent), with mobile service turnover falling 5.3 per cent to CNY156 billion. Mobile data sales slipped 2 per cent to CNY103.4 billion, voice fell 15 per cent to CNY30.2 billion and product sales declined 3.9 per cent to CNY26.1 billion.

The operator said the rate of decline in mobile revenue slowed in the final quarter compared with the first three quarters.

5G plans
China’s third-largest operator earmarked CNY70 billion in capex for 2020, a 24.1 per cent increase, with half going to 5G infrastructure (up from CNY7.9 billion in 2019). It had access to more than 60,000 5G base stations in 2019, about 40,000 of which it deployed.

With China Telecom, it aims to jointly build more than 250,000 5G sites by end-2020, covering all prefectural cities nationwide. China Unicom noted the combined efforts resulted in capex savings of CNY10 billion in 2019.

To lower network operating costs, it plans to push the decommissioning of 2G and 3G networks by region and refarm the spectrum.

LTE growth
Its 4G subscriber base grew 15.4 per cent in 2019 to 254 million, taking penetration to 80 per cent, up 10 percentage points from end-2018. The company added 3.44 million mobile subscribers, taking its a total to 318.5 million.

Average monthly data usage per subscriber increased 35.6 per cent to 8GB, though monthly ARPU fell 11.6 per cent to CNY40.40.

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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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