China Unicom (0762.HK) on Tuesday said it expects average revenue per user per month for its mobile and broadband services to drop in the second half, but hopes income from its 3G data services will offset part of the decline.

Unicom, which lags industry leader China Mobile (0941.HK) by subscribers, recently reported a net profit for the first quarter of 3.57 billion yuan ($522.8 million), on total revenue of 37.92 billion yuan.

ARPU figures for the first quarter were not immediately available but the average for 2008 stood at 42.3 yuan, down from 45.7 yuan in 2007.

"Although ARPU is expected to decline, I still hope that the launch of 3G services will bring in more income from data services," Chairman Chang Xiaobing told reporters after the company's annual general meeting. He did not give a timeframe to stabilise ARPU.

The mobile carrier had 138.83 million total mobile subscribers as of April, up from 137.69 million in March.

Unicom, which holds the sole licence to operate WCDMA technology in China, officially launched third-generation mobile services on May 17.

Chang said the company would not initiate a price war in the industry and said he expected competitors to be rational in pricing their services.

"We all need to adjust the way we do things from how we did them in the past. Operators are more rational now," he said.

Rival China Telecom (0728.HK) on Tuesday said it had started to see some improvement in its ARPU since it acquired the CDMA business from Unicom last year. It gave no figures or details.

China Telecom plans to roll out its own 3G services next month, and aims to introduce 10 new 3G EVDO (evolution data optimised) phone handsets each month from June to August.

Source:Reuters