China Unicom (Hong Kong), which reported a decline in net profit from continuing operations yesterday, said it might raise 30 billion yuan (HK$34.02 billion) in debt to partly fund its 110 billion yuan capital expenditure plan this year. The nation's smallest telecommunications operator released its first set of final results for last year after the completion of a merger with fixed-line rival China Netcom Group Corp in October last year. Net profit, which included a one-off gain from the disposal of its CDMA network, rose 58.19 per cent to 33.91 billion yuan. Revenue was down 1.18 per cent at 148.91 billion yuan. Earnings per share rose 53.76 per cent to 1.43 yuan and the company declared a final dividend of 20 fen per share. Excluding the one-off items, net profit from continuing operations was down 5.8 per cent at 14.33 billion yuan. Analysts had estimated net profit in the range of 14.3 billion to 17.9 billion yuan. 'The results are in line with market expectations, but as it's the merger results we will focus more on future development,' said Bocom International analyst Li Zhiwu. In May, Unicom is expected to roll out 3G mobile service based on Europe's WCDMA technology in 55 cities, and will expand that to more than 284 cities by the end of this year. The company has budgeted 110 billion yuan for capital expenditure this year. Of that amount, 35.2 per cent or 38.7 billion yuan will be for 3G network construction, while 21.5 per cent or 23.7 billion yuan will be for GSM mobile network expansion. 'We will finance capital expenditure through our operating free cash flow, which totals not less than 65 billion yuan per year, and the disposal gain from the CDMA network, worth 26.3 billion yuan,' said chief financial officer Tong Jilu. 'The company may raise 30 billion yuan through issuing debt,' said Mr Tong, without giving details. He said the company's net debt to equity ratio was only 8.8 per cent. Chairman Chang Xiaobing said the company was still negotiating with Apple over the introduction of the popular iPhone 3G in mainland market, but no agreement had been reached. The company's core GSM mobile business experienced 4.3 per cent growth in revenue last year to 65.25 billion yuan. Voice revenue was down 1.3 per cent at 47.32 billion yuan, while value-added services revenue was up 20.2 per cent at 16.26 billion yuan. Average revenue per user, a benchmark to measure profitability, was down 7.44 per cent at 42.3 yuan per month, while usage minutes for each user dropped 1.32 per cent to 246.4 minutes per month. Revenue from fixed line operations fell 4.4 per cent to 82.7 billion yuan. Unicom shares yesterday fell 1.9 per cent to HK$8.28.