3G growth offsets costs for China Unicom

28 Oct 2011

China’s second largest cellco by subscribers, China Unicom, has reported that 3G subscriber growth has offset increasing costs and expenses during the nine months ended 30 September. The telco reported a 24.3% increase in its costs for the first three quarters of 2011, largely due to increases in charges for utilities, rental and network and support expenses. Revenues for the nine month period rose to CNY155.9 billion (USD24.5 billion), an increase of 23.4% compared to the same period in 2010, whilst net profits rose slightly year-on-year increasing 0.2% to CNY4.26 billion, although expenditure on network expansion limited profit growth. Unicom’s increasing revenue generation was the result of a 26.2% increase in the number of 3G subscribers in Q3 2011 to 30.23 million. The number of 2G customers also saw net additions of 1.14 million for Q3 2011, though this was a less significant factor: at CNY115 per month, ARPU for 3G subscribers is nearly three times that of the standard GSM users, which is reported as CNY38.1.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the nine month period ending 30 September 2011 was CNY48.57 billion, whilst the EBITDA margin was 31.2%.

China, China Unicom