China Unicom Hong Kong Ltd on Wednesday said net profit fell last year for the first time since 2010, as China's second-largest telecommunications service provider played catch-up in deploying its fourth-generation (4G) network.
Profit fell 12 percent to 10.56 billion yuan ($1.62 billion) on revenue which fell for the second consecutive year, by 2.7 percent to 277.05 billion yuan, the company said in a filing to the Hong Kong stock exchange. Both figures beat the 9.13 billion yuan net income and 274 billion yuan revenue average estimates of analysts polled by Thomson Reuters SmartEstimates.
The results come as network providers struggle to compete with Internet-based messaging services such as Tencent Holdings Ltd's WeChat, which customers increasingly favour over once-lucrative voice calls and short message services (SMS).
"The company is facing difficulties and challenges as well as numerous opportunities and growth potential," Chairman Wang Xiaochu said in the filing.
China Unicom will focus this year on accelerating the introduction of 4G services, Wang said.
Analysts widely expected China Unicom to regain subscribers this year after catching up with China Mobile Ltd and China Telecom Corp Ltd in building its 4G network. The company signed a strategic agreement with China Telecom in January to share resources and improve efficiency, which analysts said would allow the two to use each other's 4G networks in rural areas.