The Beijing branch of China Unicom announced yesterday that it will cancel domestic mobile phone roaming and long-distance charges starting from September 1, one month ahead of the timetable announced by the country’s top three telecom carriers.
The Beijing branch also said that it will slash international calling and roaming rates to 22 foreign countries along the OBOR (One Belt and One Road) routes. And it will charge no more than RMB 5 per MB of 4G mobile data for international data plans in 53 foreign countries.
In addition, for Beijing China Unicom fiber optic broadband users with speed below 100 Mbps, the network speed will be raised to 100Mbps for free, and the rates will be lowered as well this year. The Beijing branch of China Unicom has been vigorously advancing the development of its high-speed 4G mobile networks and fiber-optic broadband in recent years. At the end of last year, over 90% of its Beijing household subscribers had access to 50Mbps or even higher broadband services.
China’s top three carriers, namely China Mobile Communications, China United Network Communications and China Telecommunications, have drawn much flak for their exorbitant charges for roaming and data packages.
This has caught the government attention, and Chinese Premier Li Keqiang has repeatedly urged the telecom operators to cut prices and increase Internet speed since 2015.
China Unicom (Hong Kong) Ltd. and its Shanghai-listed affiliate have been implementing a mixed-ownership reform scheme as the Chinese government is seeking to introduce private capital into its state-owned enterprises (SOEs), according to media reports. And their parent company China United Network was among the first batch of SOEs selected to carry out the reform program.
To date, China Unicom has not yet finished the reform program since the company first announced the plan seven months ago, as it involves a lot of government ministries and will take some time to coordinate.
Against a backdrop of charge cuts and internet speed increase, it will be hard for China Unicom to extricate itself from the predicament of declining profits and slow user base growth in the short-term if it only pins its hope on mixed-ownership reform, said industry observer Xiang Ligang.
China Unicom was the worst performer among the three telecom carriers. The company booked RMB 625 million in net profit in 2016, down 94.1% year on year, according to the company’s 2016 annual results. And its revenue dropped 1% year-on-year to RMB 274.2 billion.
The company added 18. 175 million 4G subscribers in Q1 2017, taking its total user base to 123 million. In contrast, China Mobile and China Telecom each have a 4G user base of 568 million and 138 million during the same period.