China Unicom expects to sell 144 million smartphones this year, a year-on-year increase of 35 percent, a company executive said. [Provided to China Daily]

China Unicom (Hong Kong) Ltd, the nation's second-largest telecom operator by subscriber, saw net profits surge 89 percent year-on-year to 1.9 billion yuan ($307.7 million) in the first quarter, thanks to the company's burgeoning third-generation, or 3G, network business.

In a filing to the Hong Kong Stock Exchange on Thursday, China Unicom said revenues rose 15 percent to 70.6 billion yuan in the three months.

The performance means Unicom has managed to narrow the profits gap between it and major domestic rival China Mobile Ltd.

The latter this week posted its weakest profit growth in three quarters as higher costs eroded gains from an increase in its 3G service users.

China Mobile's net profit edged up just 0.3 percent to 27.9 billion yuan in the first quarter.

Analysts attributed China Unicom's rapid growth to its rising 3G service business.

The company has relied on an improved smartphone portfolio and attractive service plans to draw subscribers to its 3G network.

China Unicom became the first Chinese telecom carrier to introduce Apple Inc's iPhone series on contract three years ago, and has now greatly expanded its smartphone offerings.