Falling handset sales weigh on China Telecom - Mobile World Live

Falling handset sales weigh on China Telecom

29 APR 2019

China Telecom recorded profit growth in the first quarter of the year, but a sharp drop in handset sales led to a marginal decline in overall revenue.

In a statement, the operator said it faced a fiercely competitive market during the quarter, but “firmly grasped the development opportunities arising from the digital economy and carried out supply-side structural reforms”.

Moving forward, it pledged to promote “cloudification and accelerate ecological endowment”. China Telecom plans to develop a three-pronged management system covering “convergence, integration and intelligentisation” in a bid to become “a leading integrated intelligence information services provider”.

Financials
During Q1, net profit attributable to equity holders increased 4.5 per cent year-on-year to CNY5.96 billion ($886 billion).

Operating revenue fell 0.5 per cent to CNY96.1 billion, which the company said was due to a 48.5 per cent drop in equipment sales compared with the same period in 2018.

Service revenue during the recent period grew 4.1 per cent to CNY91.5 billion.

Operating expenses dipped 1.1 per cent to CNY87.4 billion, with network operations and support expenses down 8.3 per cent to CNY25 billion.

Its 4G subscriber base rose 28 per cent to end March at 256 million. Despite LTE penetration surpassing 80 per cent at end 2018, uptake of the service hasn’t slowed: it added 13.7 million 4G subs in Q1 alone. Monthly average data traffic per 4G user reached nearly 7GB.

Overall, it signed up 50 million new mobile subs year-on-year, to take its total to 315 million at end Q1.

Last week market leader China Mobile booked a decline in profit and broadly flat revenue for Q1, while China Unicom posted a sharp rise in profit.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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