How to change default size of terminal [Ubuntu]

You can edit the following file with root access.
/usr/share/vte/termcap/xterm

The following entry is the one we have to change.
:co#80:it#8:li#24:\

To change the number of columns, change the co# number, in this case 80.
To change the number of rows, change the li# number, in this case 24.
So as an example if you want a terminal window of 80x54:
:co#80:it#8:li#54:\

Now the terminal size would be half of the screen.