China Unicom reported weakness in mobile service revenue for the first nine months of 2019 as the government continued its push to make tariffs more affordable, but its profitability improved due in large part to tight cost controls.
Net profit rose 11.9 per cent year-on-year to CNY9.82 billion ($1.39 billion), while service revenue dipped 0.7 per cent to CNY199 billion, though the company noted this was an improvement on H1, when revenue was down 1.1 per cent.
In a statement, the second-largest operator in China by subscribers said despite facing new challenges and competition, expenses were down due to strong control of capex, and a reduction in network, operation and support expenses, while sales and marketing costs rose only marginally.
Mobile service revenue was hit by a government policy to upgrade internet speeds and reduce tariffs, falling 6.1 per cent year-on-year to CNY118 billion. Revenue from its industry internet business increased 48 per cent to CNY24.3 billion.
Mobile ARPU fell 13.2 per cent to CNY40.60. Average monthly mobile data usage jumped to 22.9GB from 15GB at end-September 2018.
Its mobile subscriber base grew by nearly 15 million to end September with 324.7 million subs. Penetration of 4G rose to 77.3 per cent, with 37 million LTE users added in the year to end-September taking its total to 251 million.
Referring to an agreement with China Telecom to co-build a 5G access network, China Unicom’s chairman and CEO Wang Xiaochu, said the deal will reduce 5G network construction, operation and maintenance costs, while delivering coverage efficiently.
“It will also benefit the establishment of 5G service capabilities rapidly and strengthen the market competitiveness of 5G networks and services, while improving network investment return and asset operation efficiency, and leading to win-win for both parties.”Subscribe to our daily newsletter Back