IDD traffic lifts Unicom volume

PUBLISHED : Thursday, 01 November, 2001, 12:00am
UPDATED : Thursday, 01 November, 2001, 12:00am

The September 11 attacks on the United States were behind an 18.5 per cent surge in China Unicom's long-distance traffic volume for the month, according to statistics released by the mainland's No 2 phone company.

The increasing volume of international direct dial (IDD) traffic could lead to a round of analyst upgrades for China Unicom, whose share price has been under pressure recently because of falling tariffs in its core mobile business.

In September China Unicom recorded 647.81 million minutes of IDD traffic, 101.12 million more minutes than in August.

The August figure was a substantial increase on the monthly average for the first half of 362.48 million, according to Wallace Cheung, analyst at DBS Vickers Securities.

'The growth in China Unicom's long-distance business has been spectacular,' he said. 'We are looking for further upgrades should the trend continue.'

Mr Cheung said that apart from the terrorist attacks, China Unicom's management had attributed the higher than expected long-distance usage to continuous network expansion and an improved sales force.

China Unicom recorded 3.91 billion IDD minutes under fixed-line services, the second-largest contributor, for the first nine months of the year.

Meanwhile, mobile subscriptions grew 5.63 per cent in September to 23.36 million subscribers.

Of these 15.98 million were post-paid subscribers and 7.37 million were pre-paid.

Subscribers in the first nine months grew 120.58 per cent from the beginning of the year, netting 10.59 million customers.

The one-million net subscriber addition per month was in line with market expectations.

Goldman Sachs expected the largest operator, China Mobile, could reach 69 million subscribers this year.

After meeting China Mobile management yesterday the US brokerage raised this year's net profit forecast by 1 per cent to 27.36 billion yuan (about HK$25.63 billion), while lowering the figure 1 per cent to 29.99 billion yuan for next year.

It said the adjustment was made to reflect higher capital expenditure of 41 billion yuan, and a slightly lower pre-paid average revenue per user (arpu) after next year. The blended arpu was projected to be 121 yuan, down from a forecast 146 yuan this year.

Meanwhile, Barclays Capital called China Mobile a 'safe harbour' in the present market as it had one of the strongest credit positions in the region in terms of its solid and conservative financial profile, strong cash flow, capital expenditure reduction programme, subscriber growth and growth potential.

But uncertainties would remain an overhang for some time, particularly the issue of new licences and the implementation of the calling-party-pays scheme.