China Unicom, the country's only dual-network mobile operator, reported an above expectation third-quarter net profit of 1.47 billion yuan, on lower financing and depreciation charges. On a nine-month basis, however, its bottom line shrank 7.39 per cent from 4.1 billion yuan as it added fewer new subscribers per month than last year. Revenue rose 10.7 per cent to 65.28 billion yuan from 58.97 billion yuan a year ago. On a quarter-on-quarter basis, the third quarter was up 16 per cent from the second quarter. Analysts polled by Bloomberg expected a third-quarter profit median of 1.3 billion yuan. 'This is the best quarter since the new chairman arrived at Unicom. Clearly, the new management's strategy to focus on the more profitable GSM [global system for mobile communication] business is the right decision,' wrote Merrill Lynch analyst Wendy Liu. Chang Xiaobing, Unicom chairman since last November, said in August that management maintained its target to turn around its CDMA (code division multiple access) business, which lost 584 million yuan last year. It would also boost capital expenditure for GSM this year by 10 per cent. For CDMA, stiff handset subsidies of 4.55 billion yuan to lure new subscribers had dragged the business to a 400 million yuan pretax loss, widening from the 30 million yuan loss a year ago. It had 31.91 million CDMA customers out of the total 124.15 million subscriber base; the other 92.24 million were GSM customers. Taking out both taxes and interest costs, CDMA was already profitable, Merrill Lynch said, with 80 million in earnings before interest and taxes (EBIT) level. However, Ms Liu wrote that accounting changes had bolstered Unicom's bottom line by 168 million yuan, affecting its booking of upfront revenue, amortisation of goodwill and other issues. The revaluation of the yuan by 2.1 per cent in July to 8.11 to the US dollar gave Unicom a 239.9 million yuan exchange gain, against a loss last year, so that its finance costs dropped 40 per cent. Average revenue per user (arpu) for CDMA was 77 yuan, slightly down from the 78.1 yuan for the first half this year. Unicom's stronger GSM arpu was 48.9 yuan for the nine months, down from the 49.1 yuan for the first six months. GSM pretax profit was 5.9 billion yuan, up 6.4 per cent from a year ago.