CHINA Unicom (Hong Kong) Ltd. said net income fell 26 percent in its fourth quarter, as the carrier faced stiff competition for telecom subscribers from its two main rivals and lagged in providing Internet-based messaging services.

    China Unicom chairman Lu Yimin warned at a press conference in Hong Kong on Tuesday that user growth may slow or even fall in absolute terms in 2015.

    Lackluster results in recent quarters at China Unicom and China Telecom have prompted speculation that the two may merge, although the prospect has been rejected by Chinese regulators. Lu dismissed a question again Tuesday, saying he had not heard of speculation from within the company.

    China Unicom posted a profit of 1.5 billion yuan (US$239.08 million) for the quarter ending December, far below the 2.4 billion yuan expected by analysts. Revenue fell 7 percent to 69.34 billion yuan, according to a calculation.

    China Unicom, which finally received its 4G license Friday, said it had been hobbled by its inability to offer consumers a 4G network over the past year, at a time when 4G business was booming for its rival China Mobile, which reached more than 100 million users as of February.

    The company has also been negatively affected by China’s value-added tax reform enacted in 2014.

    Lu said the company, which lists shares in Hong Kong, will now have the infrastructure available to offer the next-generation service to 100 million out of its 300 million mobile subscribers by the end of the year.

    Net profit for the full year rose 15.8 percent to 12.06 billion yuan as the company cut its handset subsidy expenses by more than a quarter.

    Total revenue for the year was 284.68 billion yuan compared with 295.04 billion yuan a year ago.

    (SD-Agencies)