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China Unicom Looks At 4G To Turn Around Its Business

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China Unicom Looks At 4G To Turn Around Its Business

China’s second largest operator China Unicom recorded a drop in its subscriber base by as much 5.4% and profit by as much as 12.4%.

The company said it is “facing the complex changes in the business environment and stiff challenges, including speed upgrades and tariff reductions, one-month data carry-over, the replacement of business tax with VAT, and intensifying competition.” The service provider with 252 million subscribers by the end of 2015, down from 266 million the year before.

Overall revenue fell 2.7 per cent to CNY277 billion, while service revenue dropped 3.9 per cent to CNY235 billion. Mobile service revenue declined to CNY142.6 billion. Non-voice business accounted for 69 per cent of service revenue, up from 62 per cent in 2014.

Monthly blended ARPU dropped 7.5 per cent to CNY40.8, and its mobile subscriber base declined by 14.26 million to 252.3 million in 2015.

However on the other side, the company recorded an increase in its 4G subscribers from less than two million at the end of 2014 to 44 million at the end of the last financial year. It accounted for 17.5% of its total subscribers.  Average monthly mobile data usage jumped from 137MB a month in 2014 to 231MB last year.

Its fixed-line broadband revenue grew 7.5% year-on-year to CNY54 billion, and fixed-line broadband subscribers increased by 5% to 72.3 million, with FTTH users accounting for more than 50% of the total.

China Unicom said the sharing of tower assets among operators “will promote a quick and efficient 4G network rollout” while reducing capex by an estimated CNY59 billion. It transferred 164,000 towers to China Tower. The company expects to benefit from the future earnings of the tower company and is currently negotiating rental fees with China Tower.

Last year it spent CNY133.9 billion on capex and added 306,000 4G base stations, taking its 4G total to 399,000.

Wang Xiaochu, China Unicom chairman and CEO, said 2016 “marks the beginning of the all-round implementation of our Focus Strategies, and the fostering of innovation and cooperation”.

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