China Unicom, one of the three state-owned telecommunication operator in the country reported 56 percent jump in annual net profit, spurred primarily by the surpassing sale of the company’s code division multiple access business to China Telecom Corp.

Its net profit increased to 33.91 billion yuan (US$4.96 billion) from 21.44 billion yuan in 2007, but failed to meet the average forecast of 36.86 billion yuan in Dow Jones Newswires poll of five analysts.

However, undeterred by the reports and still flagging high hopes on the soon to be rolled out 3G services, China Unicom said it will raise its capital expenditure this year to 110 billion yuan from 70.49 billion yuan in 2008. And out of the total capital expenditure budget, it intends to invest more than a third into the rollout of its 3G wireless services.

“The company plans to capture every opportunity in 3G business development, further expanding its subscriber base, optimizing subscriber structure and facilitating the development of upgrading fixed line and mobile communications," Chairman and Chief Executive Chang Xiaobing said in a statement.

Mr. Chang added that the company will launch these services in 55 cities on May 17 this year and aims to expand the service to 284 cities by the end of 2009.

But, Mr. Chang evaded from disclosing any cue on the company''s 3G subscriber target and handset subsidies for the business.

The capex committed for 2009 will be funded through its operating cash flow and may seek new loans of 30 billion yuan, said Chief Financial Officer Tong Jilu.

Furthermore, the company is highly positive and doesn’t expect to book any impairment losses this year from retiring its personal handyphone business, as was the case last year when it had to book an impairment loss of 11.84 billion yuan from retiring the business, added Mr. Tong.

In the running year, China Unicom plans to drive its business by concentrating on its domestic operations with no overseas acquisition plans.