UPDATE: China Unicom Targets Adding Over 1 Million 3G Users A
Month
(Adds more comments from executives on the company's 3G business.)
By Lorraine Luk
Of DOW JONES NEWSWIRES
HONG KONG -(Dow Jones)- China Unicom (Hong Kong) Ltd. (CHU), which started
offering Apple Inc.'s (AAPL) iPhone in China last week, is targeting increasing
the number of its third-generation mobile users by more than 1 million a month,
Chairman Chang Xiaobing said Tuesday.
The company launched 3G services in China Oct. 1 and had more than 1 million
subscribers to the mobile technology standard at the end of that month, Chang
said.
He said China Unicom has signed up more than 5,000 iPhone users in China since
it launched the phone there Friday and it expects the Apple phone to boost its
average revenue per user. The company is the only seller of the iPhone in China
at the moment, though China Mobile Ltd. has said it is in talks with Apple.
But analysts say China Unicom's high pricing of the iPhone will limit demand
for the product.
China Unicom has been selling the 32-gigabyte iPhone 3GS for CNY6,999 ($1,024)
without a service contract, higher than the around $800 consumers pay for the
same product in Hong Kong, which has different wireless carriers than on the
mainland.
Chang said the company hopes to offer more low-cost smartphones to drive its
3G business.
Analysts also said China Unicom's earnings will decline in the short term
because of its 3G startup costs and as its fixed-line business comes under
growing pressure from subscribers switching to mobile phones.
The fixed-line business accounted for about 50% of the company's first-half
revenue excluding upfront connection fees of CNY74.23 billion.
"In the early investment stage of our 3G business, we will see revenue growth
and user addition lagging behind the increase in operating expenses and network
costs, but this will be temporary," Chang said.
China Unicom Chief Financial Officer Tong Jilu said the company expects its 3G
operating expenses, which include handset subsidies and advertising expenses, to
account for 30% of total 3G revenue in 2010.
Competition in China's telecommunications market has intensified since the
government awarded 3G operating licenses to China Unicom, China Mobile and China
Telecom Corp. in January.
All three companies have been striving to roll out new 3G services with lower
tariffs and higher handset subsidies to boost demand.
-By Lorraine Luk, Dow Jones Newswires; 852-2802-7002; lorraine.luk@
dowjones.com
(END) Dow Jones Newswires
11-03-090518ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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