China Unicom boosted by 3G, low-cost smartphones

China Unicom boosted by 3G, low-cost smartphones

21 MAR 2013

Chinese number-two operator China Unicom benefited from the growth of its 3G business and focus on low-cost smartphones during 2012 and the fourth quarter.

In March last year the operator lost its advantage as the only carrier in the country to offer the iPhone with a service plan after China Telecom made subsidised iPhones available.

China Unicom responded by offering low-cost devices priced at RMB1,000 to boost the “quality-to-price ratio and competitiveness of its terminal products” and attract new smartphone subscribers.

A rapid growth in the 3G business was attributed to handset sales, distribution channels, improved tariffs and promotion of integrated 2G and 3G products. The company added 36.44 million 3G subscribers during the year to reach a total of 76.46 million by year end.

The company also focused on building out its 3G network, increasing the number of HSPA+ base stations from 92,000 to 331,000 during the year. Mobile data volume increased by 92 per cent compared with the previous year.

Based on the company’s full year figures, the company’s net income for the fourth quarter was RMB1.64 billion ($264 million), surpassing profit estimates compiled by Bloomberg and a significant increase on the RMB14 million reported a year earlier.

Revenue for the fourth quarter was up 20 per cent on a year earlier at RMB63.7 billion.

For the year as a whole, profit was RMB7.1 billion, up 67.9 per cent on 2011 while revenue was RMB248.93 billion, up 19 per cent on 2011. The board recommended an end of year dividend of RMB0.12 per share.

Mobile subscribers hit 239.31 million, up 19.9 per cent year-on-year with mobile service revenue reaching RMB126.04 billion, up 22 per cent. The share of total service revenue attributed to mobile rose by 4.4 percentage points year-on-year to 60 per cent.

The share of mobile subscribers using 3G hit 31.9 per cent, up 11.9 percentage points compared to 2011. 3G’s share of mobile service revenue was 47.9 per cent, a 1.3 percentage point increase.

GSM subscribers grew to 162.86 million, a two per cent increase. However, GSM service revenue fell by 6.1 per cent to RMB66.24 billion, which was attributed to a decline in use of voice and SMS.

The company plans to accelerate the scale and profitable growth of its 3G business in 2013 and accelerate “the integrated development of 2G and 3G businesses, fixed-line and mobile business”. It will also deploy IP RAN for backhaul traffic to “meet future bandwidth demand from LTE”.

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Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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