China Unicom celebrates 10 years as a Hong Kong-listed company today by hosting a dinner at the Four Seasons Hotel. Guests are likely to be treated to comments such as those made by chairman and chief executive Chang Xiaobing in the latest annual report, about building 'a solid foundation for the future', 'overall business development remaining steady' and 'the revenue structure [is] gradually improving as the network capacity increased substantially'. But documents filed last month with the US Securities and Exchange Commission by China's second-largest telecommunications network operator, which is also listed in New York, tell a different story because of the US regulator's greater disclosure requirements. Unicom's filing cited difficulties in managing its much larger business operations, which have 321,772 employees. It said the company was still integrating the fixed-line operations of China Netcom Group Corp, which it acquired under the government-backed restructuring of the domestic telecommunications sector in 2008. 'Unicom notes that management's focus on the integration process may result in a significant diversion of attention from business operations and significantly restrain resources, adversely affecting its financial condition, results of operations and growth prospects,' Macquarie Equities Research analyst Lisa Soh said in a report. 'We believe this partially explains Unicom's poor operating momentum in the first quarter this year.' Unicom posted a 68 per cent year on year drop in first-quarter net profit to 1.13 billion yuan (HK$1.3 billion), as it continued spending heavily on marketing to attract more 3G users. 'In contrast to the commonly held view that domestic operators have little exposure to foreign currency movements, Unicom is negatively affected by a depreciating euro due to its stake in Telefonica,' Soh said. Unicom and the Spanish telecommunications giant agreed in September last year to have a mutual investment of US$1 billion in each other's companies to strengthen their co-operation. Unicom's stake, made in euros, has been devalued in recent months. The Macquarie report, which maintained a 'neutral' rating on Unicom, said the carrier is also 'unable to charge sufficient premiums for access to faster speeds', especially in rural areas. Unicom had about 32.1 million fixed-line broadband subscribers on 2 megabits per second and faster data speeds, but its average revenue per broadband user still fell by 10 per cent last year, Soh said.