China Unicom reveals cost optimization and investment strategy

China Unicom Capex 2017China Unicom has revealed the company’s business turnaround, investment, focus areas, cost optimization and growth strategy in 2017.

Cost optimization

China Unicom has reduced the number of departments at the headquarters by 33 percent. It has also slashed the number of institutions at provincial branches by 21 percent. China Unicom has withdrawn 15 percent of mid‐ level management as part of its strategy to build an organisational structure with lean management, scale operation and strong synergy.

The state-run telecom company issued restrictive shares to managerial staff and key talents. It has combined short‐term and long‐term incentives to align the interests of the company and employees. It also optimised incentive structure to be more closely aligned with results and  performance.

Investment

China Unicom has reduced its capital expenditure (Capex) by 41.6 percent to RMB42.13 billion. China Unicom said the number of 4G base stations increased by 0.11 million to 0.85 million.

China Unicom enhanced its network coverage capability and quality to attract more users for broadband market.

FTTH ports accounted for 79.2 percent of the total fixed-line broadband ports. China Unicom achieved 4G network utilisation rate of 57 percent.

The percentage of FTTH subscribers to total broadband subscribers reached 77 percent.
China Unicom business turnaround 2017Business achievements

China Unicom’s achieved 4.6 percent growth in service revenue to RMB 249.02 billion, 0.5 percent increase in EBITDA to RMB84.33 billion with a profit of RMB4 billion.

China Unicom’s mobile service revenue rose 7.9 percent to RMB156.44 billion. It added 20.34 million mobile subscribers to reach 284.16 million in end-2017. ARPU of China Unicom rose 3.5 percent to RMB48. China Unicom added 70.33 million 4G subscribers to reach 174.88 million in 2017.
China Unicom revenue break-down 2017Fixed-line service revenue fell 0.9 percent to RMB90.87 billion because of 13.3 percent drop in voice revenue.

ICT revenue rose 11 percent to reach RMB3.32 billion. IDC and Cloud computing revenue increased 16.6 percent to RMB11.02 billion.

China Unicom clocked Internet of Things (IoT) revenue of RMB1.41 billion and Big Data revenue of RMB0.16 billion last year.

Fixed-line broadband access revenue dropped 2.6 percent to RMB42.71 billion. Fixed-line broadband subscribers increased by 1.30 million to 76.54 million.

Future

China Unicom’s broadband services will focus on video offering, integrated products and e-commerce channels to optimise product offerings, strengthen operation and services, and stimulate the sales productivity of front-line staff to enhance the competitive advantages of its broadband business.

Baburajan K

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