China Telecom – China’s third-largest mobile operator – has reported a 33.9 percent decline in profit for the first three quarters of 2009 as it focused on rolling out and promoting its new 3G EV-DO network. Profit in the period between 1 January and 30 September 2009 declined to CNY11,392 million (US$1,671 million) compared to CNY17,230 million in the year-ago period. EBITDA also declined by 3.9 percent (to CNY63,556 million), but revenues rose 15.3 percent to CNY154,748 million. The EBITDA margin slipped from 49.3 percent to 41.1 percent. In a statement, China Telecom noted that it had “mitigated and offset the decline in the traditional wireline voice services and enabled the Group to maintain robust fundamentals.” However, it also noted that the rollout of its mobile service “would lead to an increase in marketing initiatives, which would result in short term pressure on the Company’s profitability.” Chairman and CEO Wang Xiaochu said in July that the firm’s mobile unit could become profitable by either 2011 or 2012 depending on levels of competition.

China Telecom entered the mobile space last year during the restructuring in China’s telecoms market, which saw it acquire China Unicom’s CDMA business. By the end of the third quarter, China Telecom’s mobile subscriber base reached 46.78 million, representing a net increase of 18.87 million from when it inherited the network a year ago. This figure represents quarterly net additions of 7.5 million, up from 39.28 million in 2Q09. Mobile voice usage rose to 42.53 billion minutes in the third quarter, up from 35.78 billion minutes in 2Q09. Its domestic fixed-line customer base declined to 194.39 million from 212.97 million a year ago, while fixed-line broadband rose 42.18 million to 51.45 million.