China Telecom, the third-largest operator in the country, reported healthy growth in profit and mobile revenue in 2018, as strong subscriber and data gains offset a sharp drop in 4G ARPU.
Its net profit rose 13.9 per cent year-on-year to CNY21.2 billion ($3.16 billion), with operating revenue increasing 3 per cent to CNY377 billion. Mobile service turnover grew 9.1 per cent to CNY168 billion.
Ke Ruiwen, president and COO, said: “While the macroeconomy is facing downward pressure, cross-industry and homogeneous competition is also becoming increasingly intense. As a result, transforming our development model and pursuing high-quality development have now become the company’s top priorities.”
He noted China Telecom was awarded spectrum in the 3.5GHz band to conduct nationwide 5G network trials. Taking a market-oriented and demand-driven approach, he said it will appropriately manage the development of non-standalone (NSA) and standalone (SA) concurrently, and progressively expand the scale of network trials which cover 17 cities and involve more than 1,000 5G base stations.
Mobile data revenue increased 19.5 per cent year-on-year to CNY137 billion in 2018; voice revenue dropped 21.1 per cent to CNY31.1 billion; and equipment sales fell 24.1 per cent to CNY26.7 billion.
The operator added 60.4 million 4G subscribers, taking its LTE total to 242 million at end-December and giving it an 80 per cent 4G penetration rate. Its total mobile subscriber base rose by 53 million to 303 million, but 4G ARPU slipped 14.8 per cent year-on-year to CNY55.80.
Average monthly 4G traffic per user jumped from 2GB in 2017 to 5.5GB at end-2018.
Capex in 2018 declined 15.5 per cent to CNY74.9 billion. The company ended 2018 with 1.38 million 4G base stations after adding 210,000. With a projected CNY9 billion investment in 5G, 2019 capex is forecast to rise to CNY78 billion.
The company aims to increase IoT connected devices to between 80 million and 100 million by end-2019
In a statement, the operator said energy saving efforts reduced power consumption of data traffic by 16.8 per cent year-on-year.
Rival China Unicom last week posted a more than fivefold increase in profit in 2018. Market leader China Mobile releases 2018 results 21 March.Subscribe to our daily newsletter Back