China Unicom issues profit warning

China Unicom has issued a profits warning statement and has said that it now expects its net profit for 2010 to be more than halved compared to the previous year.

Although the operator’s revenue grew rapidly in 2010, the China Unicom says there is high pressure on its earning in 2010 due to the fast increase of depreciation and amortisation, networks, operations and support expenses, as well as selling expenses, particularly the 3G handset subsidy, in relation to the initial operation stage of the company’s 3G business.

The drop in profits compared to 2009 comes on top of the fact that 2009’s profits were themselves sharply down on 2008, by 73 per cent.