China Telecom’s profit rises 12%

China Telecom profit rises 12% in H1

27 AUG 2014

China Telecom announced today its profit in the first half of the year rose nearly 12 per cent from a year ago to CNY11.4 billion ($1.85 billion) as revenue increased 5.3 per cent to CNY166 billion.

The company said in a statement that it had faced “unprecedented uncertainty” regarding factors such as 4G regulatory policy, the implementation of the VAT reform, the establishment of a tower company and the resale of mobile services (MVNOs).

Despite a net loss of 5.35 million connections in H1, a result of increased competition from its two rivals with broader 4G coverage, the operator’s mobile revenue increased 13.5 per cent to CNY62 billion.

It added 4.13 million 3G connections and now claims 180 million mobile connections, 60 per cent of which are 3G.

The average monthly data usage per 3G subscriber jumped 30 per cent to 218MB from a year ago.

China Telecom Chairman Wang Xiaochu said China is applying for a full LTE FDD licence to expand its trial footprint and prepare for the commercial launch of a hybrid (TDD/FDD) 4G network.

Both Telecom and China Unicom have a trial FDD licence.

Fixed-line revenue grew by 3.2 per cent, as broadband connections expanded by four million to 104 million. FTTH connections increased to 33 million and now account for a third of total broadband subscribers – up from 27 per cent at the end of 2013.

Excluding the impact of the country’s value-added-tax reform, which went into effect in June, the company said its net profit was up 20.8 per cent. EBITDA edged up 0.8 per cent to CNY50.2 billion while earnings per share increased by CNY0.01 to CNY0.14.

The results were down slightly from the 17-per cent jump in net profit and 14-per cent increase in revenue for fiscal 2013. Operating expenses were up 4.3 per cent.

CAPEX fell during the period to CNY23 billion from CNY33.1 billion in the first half of 2013, but the operator’s budget for the year is almost the same as last year (CNY80 billion), as it focuses on expanding its 4G coverage.

It added 26,000 4G base stations in the first half of the year and now has 90,000 across 16 cities. It is targeting 140,000 4G base stations by the end of the year.

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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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