* China Unicom back to black in Q4

* To raise capital expenditure by a third in 2012

By Lee Chyen Yee and Yuntao Huang

HONG KONG, March 22 (Reuters) - China Unicom (Hong Kong) Ltd , the country's second-biggest mobile operator, swung to a profit in the fourth quarter on higher-end subscribers using more data and said it planned to spend a third more this year to upgrade its network.

The country's three mobile operators - China Mobile Ltd , China Unicom and China Telecom Corp Ltd - have been trying to boost their average revenue per user (ARPU) in the world's largest wireless market, where the bulk of subscribers are 2G users.

China's carriers typically have to dole out hefty handset subsidies to attract higher-end 3G users in the hope that they will ultimately spend more surfing the internet and downloading content in addition to making calls and sending text messages.

"Profit in the fourth quarter fell sharply sequentially mainly because we lost business in the 2G and fixed line sectors and our 3G and broadband revenues did not grow enough to offset that," China Unicom's chief financial officer Li Fushen told a news conference on Thursday.

"Another reason is our cost increase, which includes handset subsidies," he said.

In the fourth quarter, China Unicom eked out a net profit of about 10 million yuan ($1.6 million), much lower than the third quarter but swinging from a net loss of 426 million yuan in the last three months of 2010, China Unicom executives told Reuters.

For the full year, China Unicom posted a net profit of 4.23 billion yuan, lower than a forecast of 5.45 billion yuan from Thomson Reuters I/B/E/S, but 14 percent higher than the year-ago figure of 3.70 billion yuan.

China Unicom had 205.97 million mobile subscribers in February, of which about a fifth are 3G users, more than China Mobile's 8.6 percent but lower than China Telecom's one-third.

China Unicom plans to spend 100 billion yuan in 2012, a third more than in 2011 as it upgrades its network to attract more higher-end 3G subscribers, executives said.

It was the first Chinese carrier to offer Apple Inc's iPhone, but that exclusivity ended earlier this year when Apple sealed a contract with smaller rival China Telecom.

China Unicom said 2011 ARPU of mobile subscribers was 47.3 yuan, up 8.2 percent from a year earlier.

The firm's results came days after China Mobile reported a full-year net profit rise of 5.2 percent and China Telecom posted a 7.5 percent increase.

China Unicom's shares had fallen 20 percent since the beginning of the year, lagging its competitors. (Editing by Chris Lewis and Mark Potter)

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