China Telecom, the country’s third largest mobile operator, posted strong profit and revenue gains in the first half of the year, with double-digit growth in mobile data revenue and 4G subscribers.

Net profit in H1 2017 increased 7.4 per cent year-on-year to CNY12.5 billion ($1.87 billion), while revenue rose 4.1 per cent to CNY184 billion.

A 6.8 per cent year-on-year increase in service revenue to CNY166 billion was fuelled by a 12.2 per cent jump in mobile service turnover to CNY75.7 billion. Mobile data revenue increased 24 per cent to CNY55.3 billion.

China Telecom chairman and CEO Yang Jie said the results showed the company “firmly rose to the challenges” in the face of increasingly intensified competition, coupled with complicated and changing industry environments.

Yang said with a steady improvement in the economy, the ICT sector is now the industry with the highest growth potential among the key industries in the country.

“Technology penetration promotes industry upgrades. The vast potential of new emerging businesses such as IoT, cloud computing and big data opens up vast market potential for the company,” he said.

4G rising
The operator increased its 4G user base 25 per cent, or 30.1 million, during the period, closing June with 152 million LTE subscribers (66 per cent of its total mobile connections of 230 million). Overall, it added nearly 15 million new mobile subscribers in H1.

Mobile voice revenue fell 10.7 per cent year-on-year to CNY20.4 billion in H1, while handset sales dropped 16 per cent to CNY16 billion.

On a sequential basis, mobile ARPU rose to CNY56.80 at end-June from CNY55.50 at the end of 2016 and 4G ARPU fell 7.7 per cent to CNY67.20.

During H1 China Telecom completed refarming of the 800MHz band, and deployed 260,000 4G base stations, bringing its total to 1.05 million. It plans to add an additional 110,000 4G sites in H2.

Capex increased marginally in the first half to CNY41.1 billion, but is expected to drop 8.1 per cent to CNY89 billion for the full year compared with 2016.