China Unicom added 9.89 million 3G subscribers in the first half, bringing its 3G user total to 23.95 million.

China Unicom, China's second largest wireless provider, posted a 9.2 percent drop in profits for the first half as it struggles to build its 3G wireless network amidst strong competition with big spending on handset subsidies.

China Unicom's 3G business continued to bleed money in the first half, posting pretax losses of 3 billion yuan, despite the company's status as China's sole carrier officially offering Apple's iPhone.

Speaking at a news conference Wednesday, China Unicom's chief financial officer Lu Fushen said he expects the company's 3G business to begin turning monthly profits by November or December.

China Unicom posted first-half net profit of 2.65 billion yuan (US$414 million), down 9.2 percent from 2.92 billion yuan last year, while revenue rose 23 percent to 101.4 billion yuan.

The company added 9.89 million 3G subscribers in the first half, bringing its 3G user total to 23.95 million. Its average revenue per 3G user fell 11.7 percent to 117.5 yuan.

China Unicom President Lu Yimin said the iPhone wasn't the company's critical profit engine, but did provide a "positive boost." Analysts said growth may pick up in the second half as handset subsidies begin to show results.