Business is booming at China Unicom

Strong growth in enterprise and cloud services have helped drive China Unicom to a 15% increase in full-year earnings.

The operator reported net income of 14.4 billion yuan (US$2.26 billion), with total revenue 7.9% higher at 327.9 billion yuan.

The buoyant result launches the reporting season for the three state-owned operators, with China Telecom and China Mobile issuing guidance ahead of their full announcements later this month.

{image 1}

China Telecom expects to report a 23% to 25% rise in profit and 10% to 12% higher revenue, while China Mobile has forecast flat earnings on 10% to 11% higher sales.

China Unicom's industry Internet unit led the way, overtaking fixed-line broadband to become its second largest segment. The unit recorded a 28% spike in revenue to 55 billion yuan, with the cloud services business jumping 46% to 16 billion yuan.

Smaller enterprise segments also did brisk business, with IoT up 43% to 6 billion yuan and the big data group, which includes blockchain and AI, up 49% to 2.6 billion yuan.

But network and operations costs grew 15%, double the rise in aggregate costs, the result of higher fees for sites and equipment, energy and network maintenance, the company said.

Steady progress

Liu Liehong, chairman and CEO, said China Unicom had made steady progress in key businesses and in developing economies of scale.

It had enhanced its innovation capability and significantly improved operational efficiency, he said in a filing to HKEx.

He said Unicom was interested in expanding its "co-build co-share" partnership with China Telecom to encompass data centers and other infrastructure including "transmission lines, pipes and fibers, equipment rooms and antennae, DAS, etc."

Without elaborating, he said he also hoped to promote cooperation with China Telecom in "technological innovation."

Unicom and Telecom jointly added 310,000 5G basestations last year and now own and operate 690,000 5G sites and 660,000 4G sites. This has meant cumulative capex savings of 210 billion yuan for the operators over the past three years, Unicom said.

Want to know more? Sign up to get our dedicated newsletters direct to
your inbox

Its core mobile business grew 4.8% to 164 billion yuan, with ARPU improving 4.3% to 43.9 yuan. It added a net 11.3 million mobile customers, a turnaround from 2020 when it lost 12.7 million.

It now has 155 million 5G package subscribers, accounting for just under half the total customer base.

In 2022, Unicom said its priorities were to continue rolling out its premium 5G and gigabit broadband networks, its government-enterprise network and its computing power network.

Related posts:

— Robert Clark, contributing editor, special to Light Reading