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Unicom bottom line hit by bond losses

By Hui Ching-hoo (China Daily)
Updated: 2007-03-30 09:23

The mainland's second-largest mobile carrier China Unicom recorded a 24.3 percent drop in net profit to 3.73 billion yuan for 2006 because of a non-cash loss.

The result had been forecast by experts, with the slide in profit attributed to unrealized losses in convertible bonds the company issued last year.

Excluding that loss, China Unicom would have posted a net profit of 6.13 billion yuan for 2006, a 24.3 percent increase over the previous year. China Unicom's revenue surged 8.3 percent to 94.3 billion yuan.

The company said the capital expenditure for 2007 would increase 20.65 percent to 26 billion yuan. The proceeds from the GSM cellular business are estimated at 13.6 billion yuan and those from local gateway and infrastructure network at 3.9 billion yuan.

The company's CDMA business, for the first time, was in the black, notching up 1.06 billion yuan in profit before taxes, compared with a 2 billion yuan loss in 2005.

The average revenue per user (ARPU) of CDMA dropped 12.25 percent to 65.9 yuan and the average usage per user per month decreased to 274.7 minutes from 276.9 in the previous year.

The total number of CDMA subscribers reached 142.4 million in 2006, adding 14.6 million new callers that year.

Value-added cellular businesses achieved a rapid growth. SMS volume reached 75.7 billion, while the number of subscribers for the CDMA 1X wireless data service grew to 20.04 million.

Unicom shares in Hong Kong yesterday closed at HK$11.32, increasing by HK$0.52, or 4.81 percent.