China Unicom forecasts strong profit growth despite sales dip - Mobile World Live

China Unicom forecasts strong profit growth despite sales dip

14 AUG 2017

China Unicom, the country’s second largest mobile operator, warned revenue dropped 1.5 per cent in the first half of the year due to intense competition in the broadband market, but forecast net profit to have jumped 69 per cent to CNY2.4 billion ($360 million).

Service revenue for H1 is forecast to increase 3.2 per cent to CNY124.1 billion – fuelled by an expected 5.2 per cent jump in mobile service revenue to CNY76.8 billion. However, consolidated revenue is expected to fall to CNY138.2 billion due to a decline in broadband access sales, resulting in a flat fixed-line service revenue of CNY46.6 billion compared with the same period of last year, the company said.

Looking ahead to the second half, the operator said it will stop charging mobile domestic long-distance and roaming fees from 1 September and: “market competition is expected to cyclically intensify. The group expects that its financial performance in the second half will face increasing pressure”.

The operator, which experienced a dismal 2016, returned to growth in Q1 2017, with its net profit rising 79 per cent year-on-year to CNY862 million ($125 million).

China Unicom will report its H1 earnings in full later this month.

Market leader China Mobile last week reported a 3.5 per cent year-on-year increase in net profit for H1 to CNY62.8 billion. Revenue of CNY388.9 billion was up 5 per cent, and service revenue increased 6.9 per cent to CNY345 billion.

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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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