China Unicom to Increase Number of 3G Users by 1 Million Each Month

Tuesday Chinese No.2 mobile carrier China Unicom said that the launch of Apple's iPhone will boost revenue in the fourth quarter.

Photo: China Unicom to Increase Number of 3G Users by 1 Million Each Month

In August, Unicom signed a three-year non-exclusive deal to sell Apple's popular iPhone in China, aiming to boost its launch of 3G services this year, but the pricey handset may eventually require more subsidies to achieve wider acceptance.

Chairman Chang Xiaobing and other executives also said the company had already signed up 5,000 iPhone subscribers, but did not give a forecast for how much the iconic handset would help its top line.

All three carriers in China have been under pressure since late last year when they initiated a $58.5 billion plan to build 3G networks capable of carrying more data and multimedia content to the world's largest wireless market, Reuters reports.

News agencies also report, China Unicom (Hong Kong) Ltd., which started offering Apple Inc.'s iPhone in China last week, aims to increase the number of its third-generation mobile users by more than 1 million a month, Chang Xiaobing said Tuesday.

The company launched 3G services in China Oct. 1 and had more than 1 million subscribers to the mobile technology standard at the end of that month, Mr. Chang said, The Wall Street Journal reports.

It was also reported, Unicom and rivals China Mobile (0941.HK), the world's No.1 mobile carrier, and China Telecom (0728.HK) are launching 3G services this year, which analysts say will increase competitive pressure to attract subscribers to the more lucrative service.

Rising competition and expenses associated with the 3G rollout was a prime reason that all three carriers reported disappointing quarterly earnings last month.

"We expect the EBITDA margin to drop from 39 percent to 36 percent in the fourth quarter on higher handset subsidies and competition." Tiffany Feng at Guotai Junan said, referring to earnings before interest, tax, depreciation and amortisation.

While sales of the iPhone would boost revenue, the company would also incur expenses for handset subsidies and advertising, which could pressure profit margins, Chang Xiaobing told reporters after a company meeting, Reuters reports.