China Unicom (Hong Kong) will boost capital spending this year to expand its 3G, Wi-fi and fixed-line broadband infrastructure nationwide, after posting a decline in profit last year.
The mainland's second-largest mobile network operator yesterday reported a 59.7 per cent decrease in net profit last year to 3.85 billion yuan (HK$4.57 billion) owing to high depreciation and amortisation, network operation and support, marketing and selling, and administrative expenses.
That was higher than the 2.5 billion yuan profit forecast by Deutsche Bank's Hong Kong analysts, but lower than the market's consensus estimate of a 4.4 billion yuan gain.
Revenue increased 11.3 per cent to 171.3 billion yuan, from 153.95 billion yuan a year earlier, because of growth in its 3G business and a change in accounting policy related to promotional, or subsidised, handset packages to new subscribers.
Under a so-called relative fair value method, Unicom immediately recognises revenue based on the sale of the handset and the actual use of mobile services by each new customer. Deutsche Bank said 'front-loading of revenues' also resulted in higher profitability.
The Unicom board proposed to pay a final dividend of eight fen per share, or 1.89 billion yuan, on or about June 22, subject to stockholders' approval.
Chairman and chief executive Chang Xiaobing said revenue from the 3G business grew an average 40.2 per cent each quarter last year, with the monthly average revenue per user at 124 yuan.