3G growth boosts Unicom profits by 55%

9 Aug 2013

China’s second largest mobile and broadband operator by subscribers China Unicom has booked an 18.6% year-on-year increase in revenues to CNY144.31 billion (USD23.41 billion) for H1 2013, driven by strong growth in the wireless segment. EBITDA for the period grew by 17.0% compared to a year earlier to CNY42.18 billion, whilst EBITDA margin edged up by one percentage point to 36.2%. Net profits increased by 55.1% y-o-y to CNY5.32 billion from CNY3.43 billion.

3G service revenues reached CNY40.91 billion, up 52.1% y-o-y and accounting for 56.2% of mobile service revenues, as 3G subscriptions passed the 100 million mark in June 2013 (57.5 million in June 2012). By end-June 2013 HSPA+ had been rolled out to all of the cellco’s 364,000 3G base stations and areas of a handful of key cities have been upgraded with dual carrier (DC)-HSPA+. Blended ARPU for wireless services was CNY48.5 (0.8% y-o-y), whilst 3G ARPU remained comparatively high at CNY77.6, although price erosion and the dilution of the provider’s user base has seen that figure drop from CNY91.8 a year earlier. Total data traffic for the six-month period was 109.69 billion MB – of which 82.81 billion MB was from 3G users (124.5%) and 26.88 billion MB from 2.5G (+155.0%) – an increase of 131.3% compared to H1 2012.

In the broadband market, service revenues increased by 10.4% to CNY22.58 billion, representing 52.2% (49.2% in H1 2012) of fixed line revenues – 26.3% (31.0%) was derived from fixed line telephony and the remaining 21.5% (19.7%) was attributed to ‘other’. Subscriptions increased by 12.3% to 62.56 million, although ARPU dipped by CNY2 to CNY61.9. Multi-play packages, dubbed ‘WO Family’, made up a third of broadband subscriptions, compared to a little over a quarter a year earlier. Unicom’s fibre rollout has continued apace, and broadband access ports increased by 19.9% y-o-y, with fibre-to-the-home/building (FTTH/B) accounting for 63% of all ports, representing an increase of ten percentage points compared to a year earlier.

China, China Unicom