China Unicom Boosts 3G Phone Target

Zacks

Beijing-based China Unicom Hong Kong Limited (CHU) has set a target of selling 90 million units of 3G smartphones in 2013, up nearly 50%. Management stated that all the 3G smartphones offered by the company will support high-speed mobile network and provide faster download speed.

In Aug 2009, China Unicom launched 3G services in China along with China Mobile Limited (CHL) and China Telecom Corp. (CHA). Initially, China Unicom offered the service through WCDMA technology but currently, is upgrading to the faster HSPA+ network that generates a higher download speed of up to 21 Mbps. The company’s HSPA+ coverage spans 330 cities.

Last week, China Unicom – the nation’s second biggest telecom carrier by subscribers – unveiled its latest offering – the Nokia Lumia 520 with a price tag of RMB 1,300 or $206. This 3G handset is compatible with the company's high-speed HSPA+ network, signaling that consumers can now avail devices that make net surfing easier and quicker.

China Unicom is making every possible move to make its 3G network the fastest in the country. The company is consistently teaming up with international big brands like Nokia Corporation (NOK) to expand its 3G business that stands as the prime contributor to its revenue growth.

In fiscal 2012, 3G business telecommunication service revenues were RMB 59.80 billion ($9.47 billion), up 82.6% year over year and accounted for 28.5% of telecommunication service revenues. The company’s total 3G subscriber base reached 76.456 million, with 36.437 million new customers added, last year.

Currently, China Unicom has a Zacks Rank #3 (Hold). We believe that the company will continue to make significant progress in expanding economies of scale in 3G, broadband and other businesses that will likely improve its overall revenue and profitability. The company is also poised to benefit from the expansion of fiber optic service in the fixed-line broadband business.
 

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