China Unicom (Hong Kong) Limited - Company Strategy & Performance Analysis
China Unicom (Hong Kong) Limited (China Unicom) offers several services including mobile voice, fixed-line voice, value-added services, fixed-line broadband, data communications, and other telecommunications services. One of China Unicom’s objectives is to enhance its 4G and increase the network roll-out. The company is investing in infrastructure to increase its customer base and service revenue
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Strong competitive position in fixed segment
The company leverages its fixed-line segment to drive growth. In the fixed segment, China Unicom has a market share of 26.4% in 2016. The company’s fixed subscriptions stood at 144.6 million in 2016 as compared to China Telecom’s 258.2 million in the same year. Although the company stands second in terms of fixed subscriptions, its continuous focus on offering innovative services has allowed it to gain a competitive advantage.
Weak competitive position in mobile services
Mobile services is one of the major growth drivers to the company’s total revenue. Although the company’s mobile service revenues reported an increase of 5.5% CAGR during 2012-2016 period, it lags behind competitors such as China Mobile and China Telecom, which posted CAGRs of 6.0% and 10.5% respectively in the same period. The relatively lower growth is due to its late entry into the 4G services market.
Advancements in LTE technology enable the company to provide effective services
China Unicom could leverage the growing demand of cloud computing. China is the largest and fastest growing market for cloud computing and IoT. The government is taking initiatives to boost the penetration of the IoT market in the country. China’s IoT market is expected grow from US$80,000 million in 2015 to US$166,000 million by 2020.