Key Takeaways From China Unicom’s Q1 Results

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China Unicom

China Unicom (NYSE:CHU), the second largest Chinese wireless carrier, published its financial and operational indicators for Q1 2017 on April 24, posting a year-over-year improvement in earnings, amid high-speed subscriber growth and lower equipment related costs. Below we provide some of the key takeaways from the carrier’s earnings release.

Trefis has a $14 price estimate for China Unicom, which is slightly ahead of the current market price.

See our complete analysis of China MobileChina UnicomChina Telecom

  • Revenues declined year-over-year, amid lower sales of telecom products and currency headwinds (RMB down 5% vs USD).
  • Net profits increased year-over-year on account of lower equipment subsidy costs and higher mobile and fixed line service revenues.
  • Net wireless billing subscriber adds improved sequentially to 2.44 million, as Q1 is typically the strongest quarter for Chinese carriers in terms of subscriber acquisition activity due to the Chinese New Year holiday.
  • 4G net adds for the quarter stood at 18.2 million, marking an improvement of 16% sequentially, driven by improving coverage. The carrier added about 340k base stations over the last year, with plans to add another 150k base stations this year.
  • Overall ARPU for mobile billing subscribers stood at RMB 46.7, marking a slight improvement over the last year, although 4G ARPU saw a decline of about 3%, amid low data tariffs and the government’s unused data carry forward policy.
  • China Unicom’s broadband subscriber base increased by about 1.4 million over the last quarter. However, the number is still well below China Mobile, which added about 8 million new broadband subscribers over the quarter.
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