The second largest mobile phone company of China, China Unicom Limited, posted high profit margins for the recently concluded half year and is expected to rise further with growth driving on increased number of 3G services subscribers.

The company posted a net profit rise of 32% for the first half of the current financial year exceeding the market expectations significantly. The company has registered a large number of new 3G services subscribers, at a rate faster than the close competitor China Mobile. All together China Unicom Ltd. posted a rise of 17.51 million new subscribers, exceeding China Mobile by 1.64 million new subscribers. The total number of 3G subscribers registered with China Unicom Ltd. now stands at 57.5 million. Its main competitor, China Mobile has net 67.1 million 3G services subscribers registered with it, by the end of June, 2012.

With the response it got from the market, China Unicom Ltd. expects its 3G services sector to cross the break-even point in the current financial period only, provided it is able to stand for the reputation created in the market.

The net revenue generated by 3G business on China Unicom Ltd. stood at a whopping USD 4.2 billion. The 3G segment of its operations alone currently stands at 44.5% of the net revenue posted by China Unicom Ltd. The rest of revenue inflow came from other services such as 2G.

The support for this growth has largely come from cheaper smart phones which are increasingly desired by users for 3G based services such games, downloads, etc. Mr. Chang Xiaobing, Chairman of China Unicom Ltd., opines that with the trend continuing, it is expected that in the near future company’s 3G services business would become the major revenue contributor surpassing the 2G segment. The growth in 3G services business of China Unicom Ltd. is largely coming from low-end smart phone users and their inclination towards small budget smart phones.