CHINA Unicom (Hong Kong) Ltd. yesterday said it expected to report Friday an 80.6 percent slide in its profit for the nine months through September as marketing costs and spending to catch up with bigger rival China Mobile Ltd. in fourth-generation (4G) services rose.

    Net income was about 1.59 billion yuan (US$236 million), the company, China’s second-largest telecom service provider, reported on a preliminary basis, compared with 8.18 billion yuan a year earlier.

    The carrier added about 9.76 million wireless subscribers in the period, bringing the total to 262 million, it said.

    First-half profit had plunged 80 percent to a 16-year low after racking up heavy expenses marketing its 4G network.

    China’s top three telecom operators — China Mobile, China Unicom and China Telecom — are competing to capture Chinese users as they migrate to 4G from 2G and 3G.

    China Unicom, whose 4G subscribers accounted for 28 percent of China’s total by the end of June, is likely to continue to face heavy marketing costs that will weigh on profits, analysts said.

    “The company is still in the stage of trying to gain market share. Its operating leverage is very high, profit margin very low, so any increase in cost results in great fluctuation in profit,” said Nomura analyst Joel Ying.

    “Competition among the service providers is only more fierce in the second half now that China Unicom and China Telecom have basically completed their 4G networks,” he added.

    China Unicom said it expects its number of 4G subscribers to double to 88.9 million in the first three quarters of the year.

    (SD-Agencies)