* China Unicom Q4 profit up 0.6 pct y/y to 2.04 bln yuan
* Q4 profit miss analyst estimates of 2.43 bln yuan
* Sales and marketing costs for 2013 up 22.7 y/y
* Full-year profit up 46.7 percent
* Subsidies, capex will remain little changed in 2014
(Adds details on results, competition and 4G networks)
By Yimou Lee and Paul Carsten
BEIJING, Feb 27 China Unicom (Hong Kong) Ltd
, the country's second-biggest mobile carrier by
subscribers, on Thursday reported flat net profit growth in the
fourth quarter compared to the year before, ending a nearly
three-year run of accelerating growth as sales and marketing
The company's net profit barely rose to 2.04 billion yuan
($333.07 million) for the October-December quarter from 2.02
billion yuan the previous year, missing estimates of 2.43
billion yuan based on Reuters calculations from a Thomson
Reuters SmartEstimate poll of 32 analysts.
Sales and marketing expenses were 42.3 billion yuan, up 22.7
percent compared to 2012.
An aggressive push to roll out 4G services by rival China
Mobile Ltd, the world's biggest carrier which signed a
deal in December with Apple Inc to distribute its
iconic iPhone, has forced China Unicom to spend heavily on
marketing and invest in 4G in the world's biggest smartphone
market in order to remain competitive.
China Unicom now hopes the government will release licenses
for the 4G FDD-LTE standard the company will mainly use for its
4G network, Chairman and Chief Executive Chang Xiaobing told a
press conference in Hong Kong on Thursday.
This will allow the company to compete more strongly with
China Mobile, whose network is built on the 4G TD-LTE standard,
which China's government issued licenses for in December.
The growing ubiquity of smartphones in China, with 500
million mobile Internet users as of December, is threatening
revenues for China's carriers as "over the top" mobile messaging
applications like Tencent Holdings Ltd's WeChat, known
as Weixin in China, replace lucrative SMS messaging.
China Unicom said capital expenditure for this year won't be
more than the 80 billion yuan the company had originally planned
for 2013, said Lu Yimin, executive director and president of the
company. Last year's capital expenditure ultimately totaled
73.46 billion yuan.
Smartphone subsidies will be little changed in 2014 from
last year, Lu said. These subsidies are used to entice customers
and weigh heavily on the revenues of all three of China's
China Unicom's revenue for the fourth quarter was 74.9
billion yuan, according to Reuters calculations, up 17.1 percent
on the previous year.
China Unicom's average revenue per user (ARPU), a closely
watched industry barometer, continued its steady decline for
more lucrative 3G subscribers, who account for almost half of
the company's 284 million subscribers.
ARPU for 3G was down to 75.1 yuan for all of 2013 from 86.1
yuan a year earlier. ARPU for all subscribers was 48.2 yuan.
China Mobile's ARPU was 66 yuan for the first nine months of
2013. Third-place China Telecom Corp Ltd did not
disclose ARPU for that period, but for the first six months of
last year ARPU was 54.3 yuan.
The results were released after the market closed. China
Unicom shares ended barely changed compared with a 1.7 percent
rise in the benchmark Hang Seng Index.
($1 = 6.1248 Chinese yuan)
(Editing by Miral Fahmy and Matt Driskill)