China Unicom said the outbreak of the COVID-19 pandemic in China has slowed the deployment of 5G networks and impacted business development.
In a statement, the company said the pandemic has also increased demand for digitalization, which could translate into new business opportunities.
The carrier’s net profit in the first quarter of the year declined by 13.9%y ear-on-year to CNY3.17 billion ($448 million), while revenue grew by 0.9% to CNY73.8 billion
In a statement, Wang Xiaochu, China Unicom chairman and CEO, claimed that while facing challenges such as market saturation and strong competition as well as the coronavirus outbreak, the telco managed to control customer acquisition costs during the quarter.
The executive also said he expects 5G user growth to accelerate in the second half of 2020, as 5G network deployments accelerate and prices of 5G devices decline and more innovative applications emerge.
The company did not provide specific information about the number of 5G subscribers.
China Unicom ended Q1 with a total of 311 million subscribers, down by 12.1 million from Q1 2019. Its 4G user base expanded 10.5% year-on-year to 254.5 million. After losing 1.37 million LTE subs in the first two months of 2020, it added 756,000 in March.
Mobile ARPU declined 2.9% year-on-year to CNY40.
In late March, China Unicom reported its net profit for 2019 had increased 11.1%year-on-year to CNY11.3 billion, while service revenue was flat at CNY264 billion.
In September last year, China Telecom and China Unicom inked an agreement to cooperatively build a 5G mobile network, with the main aim of reducing costs. Under the “co-build, co-share” deal, the carriers will work together to outline districts in 15 cities for the network construction.
China Unicom said it will work with China Telecom to deploy 250,000 5G base stations across the country by the end of the third quarter.
In the first half of the year, the two operators seek to build 100,000 5G base stations in 47 prefectures and cities.
As of February 20, China Unicom had installed 64,000 5G base stations across the country.
In June 2019, China’s Ministry of Industry and Information Technology (MIIT) officially issued licenses for the launch of commercial 5G networks in the country. Those 5G permits were granted to China Mobile, China Unicom, China Telecom and state-owned broadcaster China Broadcasting Network.
According to the China Academy of Information and Communications Technology, 5G technology is expected to create more than 8 million jobs in China by 2030.
It is forecasted that 28% of China’s mobile connections will be running on 5G networks by 2025, accounting for about one-third of all 5G connections globally, according to a report by the GSMA.
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