Unicom’s Q1 Results Mask Real Cause for Worry 中国联通：一季度财报掩盖真正忧患

China Unicom (NYSE: CHU; HKEx: 762) has just announced its Q1 results, which have triggered alarm bells for many as its profit tumbled 87 percent and it warned of more low profits ahead due to aggressive spending on handset subsidies to boost its fledgling 3G business. (English announcement; English article; Chinese article) The plunge in profit isn’t necessarily bad, as Unicom does need to take advantage of its superior 3G technology to steal market share from dominant rival China Mobile (NYSE: CHL; HKEx: 941). But the bigger cause for concern, which no one is really talking about, is the fact that Unicom needs to be spending more not only on getting more of its handsets into consumers hands, but also on upgrading its 2G and 3G networks, which are both very weak as a result of neglect over the last five years. Too many of my friends and acquaintances have complained to me that they subscribed to Unicom’s 3G service, only to discover it either slow or nonexistent much of the time even in big cities like Shanghai. If it doesn’t make solving this problem a top priority, which I’m not sure it’s doing, Unicom could discover its sharp drop in profits is more than just a short-term issue.

Bottom line: Unicom needs to focus equal energy on upgrading its networks as it is on selling handsets, or it risks losing a golden opportunity to steal share from China Mobile.

中国联通<0762.HK><CHU.N>刚刚公布一季度财报，公司净利大幅下滑87%。联通且表示由於大规模的3G终端补贴开 支，未来利润可能还会较低。利润下滑未必就是坏事，因联通确实需要利用3G技术优势，与中国移动<0941.HK>、中国电 信<0728.HK>争夺市场份额。但这里真正忧人的问题是，联通不仅需要在3G推广上增加开支，2G、3G网络升级也不能忽略。因为联通一 直忽略问题，这两个网络目前都比较差。很多朋友与熟人都向我抱怨联通3G服务问题，称在上海等大城市，联通3G网络不仅网速太慢，而且很多时候根本无网。 联通如不优先解决这个问题，利润急跌可能不仅只是暂时问题。

一句话：中国联通在升级网络、推广3G手机上需要均分精力，否则可能错失抢占中国移动市场份额的黄金机会。

Related postings 相关文章:

◙ 2011: Year of the Unicom 2011：联通的好运年

◙ Wo! China Unicom OS Stumbles Onto the Wire

◙ Don’t Hang Up On Unicom Just Yet: Seeing is Believing