Unicom records profit growth despite strong headwinds; Telecom claims 10.7m 5G users

24 Mar 2020

Full-service provider China Unicom has recorded operating revenue of CNY290.5 billion (USD40.9 billion) for the twelve months to end-December 2019, a decrease of 0.1% year-on-year. Service revenue grew by 0.3% annually to CNY264.4 billion, whilst EBITDA and net profit each rose by 11%, to CNY94.4 billion and CNY11.3 billion respectively. CAPEX for the year totalled CNY56.4 billion in 2019, of which 53% was spent on its mobile network, and the company has outlined CAPEX of around CNY70.0 billion for 2020, 57% of which would be directed towards its mobile network. The cellco reported that its 4G base transceiver station (BTS) count reached 1.41 million by the end of 2019, including the net addition of 240,000 900MHz LTE BTS. Through its 5G co-build and co-share agreement with China Telecom, meanwhile, the pair rolled out more than 60,000 5G BTS across 50 cities, with Unicom claiming to have built more than 40,000 of that total. Looking ahead, the operator has lined up CAPEX of CNY35.0 billion for 5G development in 2020, with a target of deploying 250,000 5G BTS and covering all cities by Q3 2020.

China Unicom counted a total of 318.5 million mobile subscribers at the end of 2019 – up from 315.0 million twelve months earlier – including 253.8 million 4G users (219.9 million at end-2018). Monthly mobile ARPU dropped sharply to CNY40.4 from CNY45.7 in 2018, however, whilst 4G ARPU fell to CNY44.5 from CNY53.3 a month earlier. The operator has not yet disclosed any 5G subscriber figures. In the fixed segment, Unicom reported an uptick in broadband subscriptions from 80.9 million to 83.5 million, but accompanied by a similar dip in ARPU from CNY44.6 in 2018 to CNY41.6 in 2019.

Commenting on the results, Unicom’s chairman and CEO Wang Xiaochu said: ‘Although the Company continues to face the impact of high saturation of the traditional market, adverse impacts brought by fierce market competition and “Speed Upgrade and Tariff Reduction”, as well as new challenges such as the increase in capital expenditure and operating expenses arising from 5G deployment and the impact of the outbreak of COVID-19, the Company remains confident in actively responding to the challenges through grasping the valuable opportunities resulting from technological development and industry reform, committing to the strategy and firmly promoting the comprehensive internet-oriented operation.’

In a related development, meanwhile, China Telecom has announced that it had signed up 4.1 million 5G subscribers by the end of December 2019, with that figure rising to 10.73 million by the end of February 2020. Market leader China Mobile maintained a slight lead over Telecom, with 15.40 million 5G users at the end of February.

China, China Mobile, China Telecom Corporation, China Unicom