China Unicom has posted a healthy 10% hike in earnings, driven by fast 5G takeup and a further strong performance in cloud and enterprise.
The number three Chinese operator announced Thursday a full-year profit of 12.5 billion yuan (US$1.93 billion) on 4.6% higher revenue of 303.8 billion yuan ($46.78 billion).
For the first time, it has disclosed its 5G numbers. It reports 70.83 million 5G "package customers" at December 31, accounting for 23% of its mobile customer base. Its 22% share of 5G was ahead of its 19% share of the total mobile market, the company said.
Rivals China Mobile and China Telecom have claimed 165.0 million and 86.5 million 5G subscribers respectively, making a national total of 322.3 million, or around 25 times more than South Korea, the next highest nation.
Five reasons why
The 5G business is making its presence felt on the bottom line, helping bump mobile ARPU 4.1% higher to 42.1 yuan and reversing the decline in mobile service revenue.
While it came in flat at 156.7 billion yuan ($24.1 billion), that compares with a 5% fall in mobile revenue the previous year.
The company also squeezed 3.1 billion yuan ($477 million), or 9.2%, out of sales and marketing cost, and reduced finance costs by 17.7%, or 376 million yuan ($57.9 million).
Total capex was 67.7 billion yuan ($10.4 billion), of which the 5G network accounted for 34 billion yuan ($5.2 billion), the company said. It has forecast spending 70 billion on capex in 2021, of which approximately half will go to 5G.
Unicom currently has 380,000 5G basestations deployed and it expects that to increase to 700,000 in 2021.
It said the joint 5G network rollout and sharing agreement with China Telecom had resulted in a combined capex saving of 76 billion yuan ($11.7 billion) for the two operators and had significantly reduced operating costs and the network deployment cycle.
In 2021, it is looking forward to the release of 2.1GHz spectrum for 5G as it aims to expand indoor coverage as well macro coverage of major towns and counties.
The biggest source of revenue growth was the enterprise segment, which increased revenue by 30% and now accounts for 16% of total sales, nearly double the level two years ago.
The biggest contributors were data centers, which grew 21%, IT services, up 33%, and IoT, 39% higher.
Broadband access grew 2% to 42.6 billion while smart home revenue rose 39% to 5.4 billion.
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— Robert Clark, contributing editor, special to Light Reading