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China Unicom posts 62% drop in H1 profits

08-27-2010 16:30 BJT

China Unicom, the nation's second-largest wireless operator, said Friday that its net profits in the first half fell 61.8 percent to 2.53 billion yuan ($371 million), dragged down by the fledging 3G business.

The company posted revenue of 82.11 billion yuan for the first half, up 7.6 percent year-on-year.

Tong Jilu, CFO of China Unicom, said the drop in profits is in accordance with expectations, as its 3G business was in the initial stage and the revenue from this sector could not cover 3G network operation and maintenance, asset depreciation and marketing costs, the China Business Daily reported Friday.

But he added the 3G business was developing fast, and the company expects to attract 30 million new 3G customers with an upcoming economic 3G package. By the end of July, China Unicom's 3G users have reached 8.5 million, doubling the number at the beginning of this year.

Bloomberg said the company's second-quarter net income fell 54 percent to 1.4 billion yuan, from 3.05 billion yuan a year earlier, deriving the figure from China Unicom's first-half earnings report, adding that China Mobile and China Telecom delivered profits this month that exceeded analysts' projections.

"Terrible numbers," Tucker Grinnan, head of Asian telecommunications research for HSBC Securities Asia, said. "Shows a real execution gap with China Telecom and China Mobile."

China Unicom, the country's only carrier selling Apple Inc's iPhone, also said that it would sell Apple's iPhone 4 and iPad tablet computer, Bloomberg reported Thursday, citing China Unicom President Lu Yimin.

Editor:Xiong Qu |Source: China Daily

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