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But telco insists it will reverse recent declines in mobile customer numbers in first three months of 2016.
China Unicom this week warned that its net profit will decline by around 85% in the first quarter of 2016, but was upbeat on the turnaround of its mobile business after weak performances in recent quarters.
The operator said profit attributable to shareholders will fall to 480 million yuan (€65 million) for the three months to the end of March, largely due to an increase in sales and marketing costs and a 37% hike in network, operation and support costs. The latter was impacted by tower usage fees, higher energy charges and property rentals, China Unicom said.
However, it pointed out that its bottom line will be an improvement on the CNY4.55 billion net loss – excluding gains from tower asset sales – it posted in the fourth quarter of last year, and talked up its prospects in the mobile business.
China Unicom expects to add 6.61 million mobile customers in Q1, reversing the quarterly subscriber losses it posted last year.
The telco returned to monthly mobile customer base growth in January and by the end of February had 257.8 million subscribers, including 54.8 million 4G users.
It expects mobile service revenue to decline by 1% in Q1 to CNY36.2 billion, but the figure represents 9% growth on Q4.
"Overall service revenue in the first quarter of 2016 is expected to be approximately CNY60.8 billion, showing growth compared to both the same period and the fourth quarter of last year," the operator said.
It will report its first quarter results in full on Thursday.
