China Telecom adds 37M 4G subs, net profit rises 14%

China Telecom sees profit growth as 4G picks up pace

28 OCT 2015

China Telecom, the country’s third largest operator, added almost 37 million 4G connections in the first nine months of the year, as its move to 4G picked up momentum after the government approved its FDD-LTE licence in late February.

The operator had 43.7 million 4G connections at the end of September, representing 21.5 per cent of its 194 million total connections. Rival China Mobile reported last week that 4G users account for 30 per cent of its total subscribers.

China Telecom also saw solid gains in net subscriber additions to date, up 8.7 million, or 7 per cent, since the beginning of the year. That is a major reversal from 2014, when its lost subscribers for the first seven consecutive months of the year.

ARPU was stable at CNY55.50 ($8.72) compared to 2014, the company said.

Net profit in Q3 expanded 13.7 per cent to CNY5.38 billion ($846 million) from a year ago, while its EBITDA rose 6 per cent to CNY25.77 billion. Overall revenue increased 4.8 per cent to CNY81.36 billion during the quarter, and service revenue was up 6 per cent to CNY74.3 billion.

The results for the nine months to end-September, however, were weaker due to the government’s tax reform in June, the company said. For the January-September period, operating revenue was up 1.1 per cent to CNY246 billion and net profit increased 1.2 per cent to CNY16.4 billion.

Like rivals China Mobile and China Unicom, China Telecom also expects the introduction of unused data carry-over on 1 October to have an “adverse impact on its operating revenues and net profit to a certain extent”.

The company, along its two larger competitors, two weeks ago formalised an asset transfer agreement with China Tower, with all three operators receiving shares in the firm in exchange for selling their masts.

China Telecom said in a statement that the tower sharing deal will allow it to speed up its 4G network rollout and reduce capex.

It noted that its finance costs for the first nine months decreased by 20.5 per cent over the corresponding last year due mainly to a fall in interest rates.

Author

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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