Telecommunications network operator China Unicom's profit down 22.5 per cent
Mobile network hopes to turn around flawed 4G strategy with revamped expansion plan
China Unicom has posted a widely expected decline in earnings for the nine months to September, while its new chief executive pursues a turnaround strategy with a revamped 4G expansion plan.
The world's fourth-largest wireless network operator by subscribers on Thursday reported a 22.5 per cent drop in net profit during the period to 8.18 billion yuan (HK$9.97 billion), from 10.56 billion yuan a year ago.
Total service revenue from its mobile and fixed-line operations fell 3.8 per cent to 179.75 billion yuan from the previous year.
In its filing with the Hong Kong stock exchange after the market closed, Unicom mainly attributed the decrease in earnings to the impact of the central government's implementation of a value-added tax scheme and directive for the country's three telecommunications carriers to cut marketing expenses.
Unicom had 287.57 million combined 2G, 3G and 4G mobile subscribers at the end of September.
"We believe a flawed strategy for 4G deployment amplified Unicom's problems, and is largely responsible for its underperformance versus its two rivals," Bernstein senior analyst Chris Lane said in a research note.