China Unicom H1 profits up on lower costs, broadband growth

News General China 21 AUG 2015
China Unicom H1 profits up on lower costs, broadband growth
China Unicom reported revenues for the first half of 2015 down 3.3 percent from a year earlier to CNY 144.69 billion. Services revenue fell 5.3 percent, with mobile revenues down 9.7 percent to CNY 73.46 billion and fixed revenues up 2.2 percent to CNY 46.19 billion. Unicom blamed the drop on the changes to VAT in China and changes to its sales and marketing model. The latter resulted in reduced handset subsidies and operating costs, helping EBITDA for the period increase 5.8 percent to CNY 50.46 billion. Net profit was up 4.5 percent to CNY 6.99 billion. 

The operator highlighted the focus on broadband services, with 3G and 4G now accounting for 71.8 percent of mobile service revenue, up from 66.9 percent a year ago. The number of mobile broadband subscribers increased by 8.68 million in the six months to 157.79 million at the end of June, equal to 54.5 percent of total mobile subscribers, up by 6.8 percentage points over the same period last year. 

Data usage by handset subscribers grew by 47.4 percent year-on-year, and the average monthly data traffic for mobile broadband customers was up 34.1 percent. This helped increase ARPU to CNY 42.1 in Q2 from CNY 41.0 in Q1. Fixed broadband subscribers also increased by 4.7 percent year-on-year to 70.59 million, and fixed broadband ARPU rose to CNY 64.6 in H1 from CNY 62.6 a year ago on the increased migration to fibre.

The broadband growth was helped by network expansion, as capital expenditure increased to CNY 29.83 billion in H1 from CNY 21.58 billion a year ago. Unicom added 272,000 3G and 4G base stations in the period for a total 837,000, realising continuous 4G coverage in most major areas. The total base stations is expected to reach 1.2 million by year-end, while the operator will also double the maximum speed to 300 Mbps and start testing VoLTE, dual-band carrier aggregation and SDN. Tri-band aggregation will follow in 2016. 

The number of its fixed-line broadband access ports increased by 20.8 percent year-on-year, of which 83 percent is FTTX. The latter percentage is expected to reach 90 percent by year-end, with 100 Mbps available in most urban areas. Next year the operator plans to start rolling out fibre to villages in northern China as well. 

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Voice services, Data services, Financial figures, Internet Access

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