Unicom profits with cheaper costs for users
Posted on Oct-28-2007· by china investor
Shang Bing (L), executive director and president of the China Unicom, Chang Xiaobing (C), chairman and CEO of the China Unicom and Tong Jilu, executive director and chief financial officer of the China Unicom attend a news conference to announce 2006 annual results in Hong Kong March 29, 2007.(Xinhua/Reuters Photo)
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BEIJING, Oct. 27 — China Unicom Ltd, the nation’s second-biggest mobile-phone operator, more than doubled third-quarter profit, beating analysts’ estimates, by winning customers with reduced rates.
Net income rose to 2.98 billion yuan (398 million U.S. dollars) from 1.39 billion yuan a year earlier. Bloomberg News derived the figures by subtracting first-half earnings from nine-month numbers released by the Beijing-based company yesterday. Unicom spokeswoman Sophia Tso confirmed the third-quarter figures. The median profit estimate of five analysts in a Bloomberg News survey was 1.89 billion yuan.
Unicom joined bigger rival China Mobile Ltd in cutting rates as they expand outside cities, where incomes are lower and two-thirds of the nation’s 1.3- billion people live. China added record wireless users in September, while the number of fixed-line subscribers fell for a second straight month.
”The mobile operators continue to lure users away from the fixed-line operators,” Chen Haofei, a Beijing-based analyst at China International Capital Corp said before the earnings announcement.
Sales gained to 24.9 billion yuan from 23.5 billion yuan.
The company’s shares rose 5.1 percent to close at 17.02 HK dollars(2.20 U.S. dollars) before the earnings were announced. China Unicom’s stock has gained 49 percent this year, while China Mobile’s has more than doubled. Hong Kong’s benchmark Hang Seng Index, on which both stocks are listed, has climbed 52 percent.
China, the world’s largest mobile market by users, gained a record 7.65 million users in September for a total of 523.3 million. The number of fixed-line customers fell to 371.7 million last month, a drop of 790,000 from August.
(Source: Shanghai Daily)
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