China Telecom reported sound results for the nine months to 30 September 2013, underpinned by solid growth in its mobile subscriber base, stating that it will “firmly seize the present golden window of opportunity and focus on accelerating the scale expansion of our strategic 3G services and wireline broadband services”.
For the nine months, the company reported a net profit attributable to shareholders of CNY14.71 billion ($2.42 billion), up 17.1 per cent, on revenue of CNY238.19 billion, up 13.4 per cent.
The company ended the period with 181.14 million subscribers, an increase of 18.7 per cent from end September 2012, of which 96.48 million were 3G subscribers – around 53 per cent of the total.
China Telecom’s 3G subscriber base increased by 61.6 per cent.
Unsurprisingly, 3G subscriber additions of 27.43 million in the nine months outstripped total subscriber growth (20.52 million), as users shifted away from 2G-only services.
Monthly mobile service ARPU remained stable compared with its 2012 level.
China Telecom said that as a result of the “significant increase” in the cost of mobile terminals sold, its “other operating expenses” increased by 35.5 per cent to CNY40.63 billion.
The company acquired its mobile network assets at the end of 2012, leading to “significant savings” in its mobile network capacity lease fees moving forward – and leading to a decrease in network operations and support expenses.
Contrastingly, its depreciation and amortisation expenses increased, “mainly due to the depreciation for the newly acquired mobile network”, and because the network was bought “substantially in the form of debt financing”, its finance costs also increased.
The picture for its fixed line business was a little more mixed. Noting “challenges from the new internet technology and the intensified mobile substitution”, the company said the number of local access lines declined, but “services like internet access and data services continued its robust growth momentum, which effectively offset the impact of decline in the wireline voice services”.
The operator said that it will look to “promote rapid development of our emerging businesses through open cooperation to progressively accomplish fundamental enhancehemnt of the business structure, and that it will “proactively participate in discussion to strive for the most favourable regulatory policies, especially on the issuance of [an] LTE licence”.