Market leader China Mobile posts strong quarterly results on 4G, fixed broadband demand.
China Unicom late last week reported a sharp recovery in first quarter profit, driven by mobile customers upgrading to 4G services.
Profit attributable to shareholders for the three months to 31 March grew by 79.3% year-on-year to 862 million yuan (€115.21 million). It represents an even bigger improvement on the prior quarter, when China Unicom posted a net loss of CNY963 million.
"The group’s operation progressed steadily as planned" during the quarter, China Unicom said in a statement on Friday, driven by "the accelerated migration of 2G/3G subscribers to 4G."
China Unicom’s mobile customer base grew to 266.27 million, from 263.82 million a year earlier. Its 4G base increased to 122.73 million from 104.55 million. Quarterly 4G net additions came in at 18.18 million, compared to 15.65 million in Q1 2016.
China Unicom’s fixed-line broadband customer base grew to 76.59 million from 75.24 million.
Meanwhile, service revenue increased to CNY61.43 billion from CNY59.98 billion; however, overall revenue fell to CNY69.01 billion from CNY70.34 billion on lower hardware sales.
Unicom’s numbers were published a day after China Mobile posted another strong set of first quarter financials.
The market leader ended March with 856 million mobile customers, 568 million of whom are 4G users. This time last year, those figures stood at 849 million and 535 million respectively. China Mobile’s fixed broadband base jumped to 85.68 million from 77.62 million a year earlier.
Operating revenue increased 3.7% to CNY184 billion, as service revenue grew 6.1% to CNY160.9 billion, offsetting equipment revenue which dropped 10.7% to CNY23.1 billion.
Net profit attributable to shareholders increased to CNY32.3 billion from CNY31.2 billion.
"The group is at a critical stage of transformation of its development, with a relatively high demand for resources from various fronts including the growth of [the] 4G business, the development of wireline broadband, the expansion of the corporate customer market as well as the deployment of emerging business," China Mobile said.