China Unicom (Hong Kong) (HKG:0762) recorded a drop in its first-quarter profit and operating revenue, despite accelerating its 5G technology, according to an earnings report published Tuesday on the Hong Kong Stock Exchange.

The company's shares fell less than 2% during Wednesday's afternoon trade.

The telecom company's net profit attributable to shareholders fell 18% to 4.89 billion yuan from 5.93 billion yuan a year earlier.

Operating revenue slipped 0.5% to 102.8 billion yuan from 103.4 billion yuan in the prior year.

However, revenue from the computing power business grew 8.3% year on year to 15.4 billion yuan, including revenue from data centers, which climbed 12 from a year earlier.

The company said the 5G market is growing, with a total number of nearly 242 million 5G users in the first quarter. The total number of users of Internet-of-Things terminal connections amounted to 755.1 million in the same quarter.

The growth in artificial intelligence and 5G technology indicates the increasing demand for these technologies.

The number of 5G base stations in China reached nearly 5 million, while the number of passive optical networks amounted to 32 million as of the end of March, government officials said at a press conference with the State Council Information Office (SCIO) on Tuesday.

The 5G-Advanced technology has been rolled out in 330 Chinese cities, and terminal users of mobile Internet of Things reached 2.95 billion, the SCIO said.

Unicom said the group developed more than 53,000 5G commercial projects and established more than 9,800 5G factories. Its international business revenue climbed by almost 15% year on year.

Despite the global popularity of the technology, the company is at risk of being barred from operating in the U.S. due to national security concerns. The U.S. Federal Communications Commission is set to vote on the possible ban on the big three Chinese telecoms, namely, Unicom, China Mobile (HKG:0941), and China Telecom (HKG:0728, SHA:601728), on April 30.

Unicom was first added to the U.S. Federal Communications Commission's list of communications equipment and services that are believed to be a threat to national security in 2022.