China Unicom | March 29, 2011 | Press Release
Hong Kong, 29 March 2011 – China Unicom (Hong Kong) Limited (“China Unicom” or “the Company”) (HKSE: 0762; NYSE: CHU) announced its 2010 annual results today.
In 2010, the Company focused on the implementation of “3G Leadership and Integrated Innovation Strategies” and actively optimized resource allocation to accelerate innovation and development. As a result, the Company achieved rapid growth in revenue and significant results in structural adjustments, while network capacity and service standards continued to improve, further enhancing its overall competitive strength.
In 2010, revenue of the Company totaled RMB171.30 billion, of which, telecommunications service revenue was RMB162.00 billion. After excluding deferred upfront connection fee, revenue and telecommunications service revenue would be increased by 11.5% and 8.5% respectively compared with last year. Revenue from mobile business (Note 1) was RM89.55 billion, an increase of 24.4% compared with last year. Revenue from fixed-line business (Note 1) was RMB80.06 billion, a decline of 1.2% compared with last year after excluding deferred upfront connection fee.
In 2010, EBITDA of the Company was RMB59.59 billion, representing an increase of 2.2% over last year when compared on the same basis (Note 2). However, due to network scale expansion and the initial stage of the 3G business operation, the Company continued to face pressure on profit. Profit for the year was RMB3.85 billion, a decline of 55.0% over last year when compared on the same basis (Note 2). Basic earnings per share was RMB0.163.
As at 31 December 2010, operating cash flows of the Company was RMB66.34 billion, an increase of 14.9% compared with last year. Capital expenditure was RMB70.19 billion, a decline of 37.6% compared with last year. Debt-to-capitalisation ratio was 32.0% and net debt-to-capitalisation ratio was 24.6%. The Company’s debt-to-capitalisation structure remained solid.
Based on the Company’s financial position in 2010 and taking into account various business development needs, the Board recommends the payment of a final dividend of RMB0.08 per share for the year ended 31 December 2010.
In 2010, telecommunications service revenue from mobile business was RMB82.36 billion, up by 18.0% compared with last year, accounting for 50.9% of the total telecommunications service revenue. Revenue from the mobile non-voice business accounted for 32.0% of telecommunications service revenue from mobile business, an increase of 4.4 percentage points compared with last year. The total number of mobile subscribers reached 167.426 million, an increase of 13.4% compared with last year. The overall ARPU of mobile subscribers was RMB 43.7, an increase of 5.0% compared with last year.
Growth of the 3G business accelerated: In 2010, the Company persisted in its unified 3G operating strategy in brands, services, package, tariffs, handset policies and service standards. The Company also devoted efforts to fully leverage on the advantage of the WCDMA industry chain and created an innovative business development model. Telecommunications service revenue of 3G business was RMB11.59 billion, with a quarterly average period-on-period growth of 40.2％. The net additions of 3G subscribers were 11.318 million, taking the subscriber number to 14.06 million, of which, subscribers with handset purchase accounted for 90.4％. The ARPU was RMB124.
The GSM business remained stable: In 2010, telecommunications service revenue of the GSM business reached RMB70.77 billion, an increase of 2.6％ compared with last year. The net additions of GSM subscribers were 8.521 million, taking the total subscriber number to 153.366 million, an increase of 5.9％ compared with last year. The ARPU was RMB39.5, a decrease of 4.1％ compared with last year.
In 2010, excluding deferred upfront connection fee, telecommunications service revenue from fixed-line business was RMB78.70 billion, a decline of 0.4％ compared with last year. Revenue from the fixed-line non-voice business accounted for 55.2% of telecommunications service revenue from fixed-line business, an increase of 7.1 percentage points compared with last year.
The fixed-line broadband business continued to grow rapidly: In 2010, the Company continued to upgrade broadband and enhance broadband speed, actively developed the incremental markets and stepped up efforts to market content applications. The fixed-line broadband business recorded revenue of RMB29.82 billion, an increase of 24.8% compared with last year. The total number of fixed-line broadband subscribers was 47.224 million, an increase of 22.5% compared with last year. The ARPU was RMB57.1, largely in line with last year.
The decline in the fixed-line voice business (Note 3) slowed down: In 2010, the Company actively promoted the integrated business, implemented the sales and marketing of voice volume package. The fixed-line voice business recorded revenue of RMB40.12 billion, a decline of 13.3% compared with last year. The total loss of local telephone subscribers was 6.187 million and the total number of subscribers was 96.635 million, of which, the loss of PHS subscribers was 5.319 million and the total number of subscribers was 13.423 million. The ARPU of local telephone subscribers was RMB 28.9, a decline of 8.0% compared with last year.
In 2011, the Company’s major operating measures and objectives include: The Company will strive to achieve economies of scale in 3G, broadband and other key businesses, further increase its overall revenue and continue to improve its profitability. The Company will further optimize the product structure, enhance terminal driven and leverage on the advantage of integration to facilitate scale development of revenue and subscribers from 3G business. The Company will implement the sophisticated marketing of the GSM business and ensure the steady development of the GSM business. The Company will also maintain the rapid growth of the fixed-line broadband business, aiming at achieving continuous improvement in the structure of the fixed-line business. The Company will devote efforts to actively promote the integration of mobile and fixed-line business, provide enterprises, families and individuals with better variety of information services, so as to achieve new breakthroughs for its business integration and development of industry applications for key sectors.
Note 1: Revenue from mobile business and the fixed-line business represents revenues from external customers, excluding inter-segment revenue.
Note 2: The non-comparable factors below which are reflected in the figures of current year and last year are excluded: (1) deferred fixed-line upfront connection fees of RMB0.19 billion for 2010 and RMB0.49 billion for 2009, and (2) realised gain of RMB1.24 billion on changes in fair value of derivative financial instrument in 2009.
Note 3: The fixed-line business includes local voice, long-distance, fixed-line value-added and inter-network settlement businesses.
