CHINA Unicom Hong Kong Ltd. saw net income for the first nine months of 2014 increase 26.1 percent to 10.56 billion yuan (US$1.73 billion), as the telecom firm continued to increase its high-paying 3G subscriber base while cutting spending on handset subsidies.

    The carrier said Friday that sales from smartphone users who pay for 3G Internet access rose 24.3 percent from a year ago, reaching 80.36 billion yuan, and now accounts for two thirds of its mobile service revenues.

    The results underscored how Unicom has fared relatively well thanks to its proportion of high-paying customers compared with rivals like China Mobile.

    Unicom said its total subscriptions stood at 297.1 million by the end of September, including 145.71 million 3G and 4G LTE mobile broadband users.

    “In the organic business there’s very strong momentum,” said Standard Chartered Bank analyst Steven Liu before the earnings release. “It’s really driven by economy of scale in the 3G business.”

    Unicom also benefited from reduced subsidies and lower marketing expenses, as part of a government-ordered effort to control costs at China’s three carriers.

    Costs related to the sale of telecommunications products fell 33 percent to 32.25 billion yuan during the period, while total costs and expenses were down 3.7 percent to 201.27 billion yuan from a year earlier.

    Unicom’s shares fell sharply in August after rivals China Telecom Corp. and China Mobile Ltd. disclosed plans to cut US$2 billion and US$1 billion respectively in subsidies but Unicom did not.

    China’s second-largest carrier has also been helped in part by government policies enacted this year that reduce the interconnection fees Unicom pays to larger rival China Mobile. (SD-Agencies)