The company says almost $2 billion was spent on first-quarter handset subsidies to lure subscribers to the network
Red chip China Unicom has cut the revenue target for its code division multiple access (CDMA) mobile operation by 20 per cent.
The cellular carrier also surprised the market by revealing it had spent more than two billion yuan (about HK$1.87 billion) in the first quarter on handset subsidies to lure subscribers to the new network - a move that contradicted the carrier's earlier claim that it would gradually eliminate CDMA handset subsidies.
Unicom had set a new monthly net average revenue per user (arpu) target of 80 yuan per subscriber, executive director and vice-president Shi Cuiming said on the sidelines of the company's annual general meeting yesterday.
As recently as a few months ago, China Unicom had reiterated its original net monthly arpu target of 100 yuan per subscriber. The target excluded handset subsidy costs paid by the carrier to acquire such users.
Mr Shi said the company revised the revenue target to reflect the market situation, as well as to take into account its extensive launch of CDMA pre-paid services in July, which would continue to drag down the CDMA network's arpu.
