China Unicom slashes cost of customer acquisition through online model

China Unicom for mobile usersChina Unicom CEO Wang Xiaochu said the telecom operator cut its Capex (capital expenditure) by 49.5 percent to RMB9.14 billion in the first half of 2017.

China Unicom in the last two years improved network capacity from the deployment of 4G network and fixed-line broadband fibre upgrade. China Unicom focused its investment on key cities and 4G networks in the first half of 2017.

As part of China Unicom’s strategy to promote sharing of resources, the company has also achieved utilisation rate of 35 percent on 4G network.

China Unicom made Capex related investment to enhance its transmission, carrier network and other basic network capabilities, and its backbone network maintained the lowest latency in the industry.

China Build built the world’s biggest single-city NB-IoT network in Shanghai and introduced NFV technology.

China Unicom revenue

China Unicom posted revenue of RMB138.16 billion (–1.5 percent), service revenue of RMB124.11 billion (+3.2 percent) and EBITDA of RMB43.56 billion (+5.5 percent) in the first half of 2017.

China Unicom generated service revenue of RMB76.84 billion (+5.2 percent) from mobile service and RMB46.57 billion from fixed-line service.

Revenue from non-voice service as a percentage of service revenue improved to 77.5 percent in H1 of 2017 from 72.7 percent in H1 of 2016.

China Unicom costs

China Unicom’s network, operation and support expenses rose 2.9 percent to RMB26.37 billion in the first half of 2017.

China Unicom transformed the development model of its mobile service by stepping up online sales efforts via 2I2C, 2B2C, etc. to enhance the quality of new subscribers to reduce customer acquisition cost.

China Unicom has added 34.26 million 4G subscribers to reach 138.81 million. The proportion of 4G subscribers to total mobile billing subscribers reached 51.5 percent. China Unicom said the ARPU of 4G subscribers reached RMB66.5.

Handset data usage grew 325.7 percent, with revenue from handset Internet reaching RMB42.9 billion. The monthly average DOU per 4G subscriber was 3,330 MB.

The fixed-line service revenue was RMB46.57 billion, which was largely stable as compared to the same period of last year. Within that, the proportion of voice revenue dropped to 13.4 percent, further improving the fixed-line service structure.

China Unicom generated RMB1.87 billion (+15.6 percent) from ICT services. Internet Data Centre (IDC) and cloud computing revenue rose 22 percent to RMB5.80 billion.

China Unicom’s Internet of Things (IoT) connections exceeded 50 million.

China Unicom generated fixed-line broadband access revenue of RMB21.56 billion (–3 percent). The number of fixed-line broadband subscribers increased 4 percent to 76.92 million. FTTH subscribers accounted for 74.2 percent of the total fixed-line broadband subscribers.

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