Mobile phone operator China Unicom on Tuesday reported a 58 percent rise in 2008 profit, boosted by one-time gains from the sale of its Code Division Multiple Access (CDMA) wireless unit to China Telecom.

Net income increased to 33.91 billion yuan from 21.4 billion yuan last year, China Unicom said in a statement. Revenue for the period declined 1.2 percent to 148.91 billion yuan.

As part of the country's telecom restructuring, China Unicom was ordered last year by the government to take over China Netcom and sell one of its mobile operations to China Telecom.

The government hopes that the restructuring would help China Unicom to expand into the fixed-line business while focusing on its GSM wireless business, which often competes with the CDMA wireless business.

China Unicom said revenue from the fixed-line and broadband operations acquired from Netcom fell 4.4 percent to 82.77 billion yuan last year, as its traditional voice business fell 12.3 percent to 53.23 billion yuan. Revenue from broadband and IP telephony business increased 23.9 percent to 25.17 billion yuan last year.

Chang Xiaobing, chairman of China Unicom, said at a press conference yesterday that the third generation (3G) service, which China Unicom is due to launch in May, will contribute to the company's earnings in the second half of the year.

The company said it would increase its capital spending by 56 percent to 110 billion yuan this year, with 38.7 billion yuan earmarked for the 3G service.

The company is now betting on its 3G service based on the WCDMA technology, which is believed to be more mature than the TD-SCDMA technology that China Mobile was mandated to adopt for its 3G services.

As part of its efforts to attract new users, China Unicom has started talks with Apple Inc to introduce the popular iPhone handsets in China. Apple Inc has been talking with China Mobile for a long time but could clinch any firm agreements.

China Unicom said its GSM users increased 10.6 percent to 133.36 million last year.

(China Daily April 1, 2009)