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China Unicom's profits up 26 pct as 3G subscriptions grow [Cihan News Agency (Turkey)]
[October 23, 2014]

China Unicom's profits up 26 pct as 3G subscriptions grow [Cihan News Agency (Turkey)]


(Cihan News Agency (Turkey) Via Acquire Media NewsEdge) China Unicom Hong Kong Ltd saw net income for the first nine months of 2014 increase 26.1 percent to 10.56 billion yuan ($1.73 billion), as the telecoms firm continued to increase its high-paying 3G subscriber base while cutting spending on handset subsidies.



The carrier said sales from smartphone users who pay for 3G internet access rose 24.3 percent from a year ago, reaching 80.36 billion yuan, and now accounts for two thirds of its mobile service revenues.

The results underscored how Unicom has fared relatively well thanks to its proportion of high-paying customers compared to rivals like China Mobile.


Unicom said its total subscriptions stood at 297.1 million by the end of September, including 145.71 million 3G and 4G LTE mobile broadband users.

In the organic business there's very strong momentum, said Standard Chartered Bank analyst Steven Liu before the earnings release. It's really driven by economy of scale in the 3G business.

Unicom also benefited from reduced subsidies and lower marketing expenses, as part of a government-ordered effort to control costs at China's three carriers.

Costs related to the sale of telecommunications products fell 33 percent to 32.25 billion yuan during the period, while total costs and expenses were down 3.7 percent to 201.27 billion yuan from a year earlier.

Unicom's shares fell sharply in August after rivals China Telecom Corp Ltd and China Mobile Ltd disclosed plans to cut $2 billion and $1 billion respectively in subsidies but Unicom did not.

China's second-largest carrier has also been helped in part by government policies enacted this year that reduce the interconnection fees Unicom pays to larger rival China Mobile.

Unicom reported total revenue of 215.34 billion yuan in the first nine months, a 2.2 percent decline from the same period a year earlier.

Unicom's performance contrasts with that of China Mobile which announced results on Monday, reporting net income for the first nine months fell 9.7 percent as Internet-based messaging apps such as Tencent Holdings Ltd's Weixin ate into voice and text messaging revenue.

Unicom is still awaiting a full licence to operate its 4G network, which is expected to boost revenues.

(c) 2014 Cihan News Agency. All right reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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