Unicom annual profit falls 94%

17 Mar 2017

Full service provider China Unicom has reported operating revenue of CNY274.197 billion (USD39.733 billion) for the year to end-December 2015, a 1.0% decline year-on-year, although service revenue for the period was up 2.4% on an annual basis to CNY240.982 billion. EBITDA, meanwhile, dropped sharply, falling 9.1% y-o-y to CNY79.498 billion, with a margin of 33.0% compared to 37.2% in 2015. Rising operating and supporting expenses, linked in part to the transfer of its tower portfolio to China Tower, and substantial increases in sales and marketing costs saw Unicom’s net profit for the year plummet from CNY10.562 billion to CNY625 million, a fall of 94.1%.

Despite the poor financial performance, Unicom noted that it has seen success during 2016 with regard to network expansion and customer sign-ups, claiming to have – amongst other things – ‘popularised “All Network Access” handsets with dual SIM card slots, contributing to the fast improvement in terminal supply [and] triggered rapid increase in mobile data traffic by targeted marketing of data capacity bundled with content [thereby] speeding up the migration of 2G/3G subscribers to 4G.’ Indeed, the cellco counted a total of 104.551 million LTE users at the end of December 2016, compared to 44.16 million a year earlier even whilst its overall mobile subscriber base dropped from 286.657 million to 263.822 million. On the network expansion front, the cellco reported a net increase of 337,000 4G base stations to a total of 736,000 including 70,000 4G base stations and 16,000km of transmission fibre that were co-built and shared with its partners in China Tower – China Mobile and China Telecom.

China, China Unicom