Update | China Unicom says removal of domestic roaming fees will trim 1.6b yuan in quarterly revenue
China’s second-largest mobile network operator posts 94pc drop in 2016 net profit amid higher network, marketing, support and other operating costs
China Unicom, the world’s sixth-largest mobile network operator by subscribers, has estimated the cancellation of domestic roaming fees will cost the company about 1.6 billion yuan (US$231 million) in lost revenue each quarter, which may complicate the company’s turnaround efforts this year.
Unicom is the first among the country’s “big three” telecommunications network operators to provide guidance on the financial impact of the further tariff reductions announced by China’s Premier Li Keqiang to the National People’s Congress earlier this month.
Li renewed his call to the three operators to “raise speed, drop prices” by completely removing domestic long-distance and roaming charges this year, lowering internet access and leased line fees for small and medium-sized enterprises, and cutting international long-distance voice tariffs.
China Mobile, Unicom and China Telecom pledged to abide by that directive in separate regulatory filings last week, while each pointed out that the measures would impact revenue and profit to a certain extent.
“The removal of roaming fees has the biggest impact on us,” Unicom chairman and chief executive Wang Xiaochu told a press conference on Wednesday. “It will roughly cost us 1.58 billion yuan in revenue every quarter.”
The removal of roaming fees has the biggest impact on us. It will roughly cost us 1.58 billion yuan in revenue every quarter
Wang said the impact of the other tariff reduction measures are still being assessed. He claimed consumers might end up increasing their use of telecommunications services, which could lessen the impact on Unicom’s profits.