China’s number three operator China Telecom lost 4 million subscribers in the nine months to September as it struggled to play catchup with the launch of 4G services by larger rivals.

China Telecom’s total subscriber base now stands at 182 million, of which 113 million are 3G users. It had 1.3 million 4G subscribers at the end of September (compared to China Mobile’s 41 million and 2.7 million at China Unicom).

“The decline in the number of mobile subscribers during the period was mainly due to the increasing market competition driven by the launch of LTE services and strengthened marketing promotion by the peers,” noted chairman and CEO Wang Xiaochu in a statement.

Wang stressed that 4G development is a priority for the company, with China Telecom currently deploying LTE technology in 40 mainland cities (via hybrid TDD-FDD LTE trials) amid plans to expand. Wang confirmed reports it will apply for expansion of its hybrid trials as well as a full commercial FDD license.

“The Group will continue to expand the width and depth of 4G network coverage in major cities to create superior network quality and accelerate e-Surfing 4G handset value chain development to assure superior 4G handset service experience to drive its mobile subscriber growth and investment return in future,” added Wang.

Despite trailing in 4G, China Telecom reported steady overall financial growth, with net profit and operating revenue increasing during the nine months. Net income rose 9.8 per cent to CNY16.2 billion ($2.65 billion) while operating sales increased 2.2 per cent to CNY243.6 billion. The profit gain was attributed to upgrading more 2G users to 3G services (a net addition of 9.4 million 3G subscribers in the period), savings in interconnection settlement charges and stable revenue from wireline broadband services (it increased wireline broadband subscribers by 5.61 million).