China Unicom (Hong Kong) Ltd. Thursday beat forecasts to report a 68% increase in its net profit last year as its third-generation mobile communications network and fixed-line broadband businesses continued their rapid growth.
Chinese telecommunications carriers are scrambling to ramp up their networks to accommodate the rapid increase in data traffic in the world’s largest mobile market, as more people replace their basic cellphones with smartphones. China has already overtaken the U.S. as the world’s biggest smartphone market.
The Chinese mobile market is still upgrading to 3G networks, while major local carriers are also preparing to launch faster fourth-generation networks. Capital expenditure for network infrastructure continues to put pressure on major local carriers, even though smartphone users are boosting their data communications revenue.
China Unicom, the country’s second-largest mobile operator by subscribers after China Mobile Ltd., said its net profit for the 12 months ended Dec. 31 was 7.10 billion yuan ($1.13 billion), up from CNY4.23 billion in 2011.
Its 2012 net profit was above the average CNY6.93 billion forecast of 28 analysts polled earlier by Thomson Reuters.
Revenue rose 19% to CNY248.93 billion from CNY209.17 billion in 2011, and was below the average CNY251.20 billion forecast in the poll.
China Unicom recommended a final dividend of CNY0.12 a share, up from CNY0.10 a year earlier.