China Telecom, the country’s third largest mobile player, reported strong increases in profit and revenue for the first half of the year, as its 4G penetration hit 44 per cent.
Its net profit for the period expanded 6.3 per cent to CNY11.7 billion ($1.76 billion), while EBITDA was down very slightly (0.4 per cent) to CNY50.6 billion.
Operating revenue in the half increased 7.2 per cent to CNY177 billion, while service revenue was up 5.6 per cent year-on-year, with mobile service turnover rising 8.3 per cent to CNY67.5 billion and wireline revenue increasing 3.6 per cent to CNY87.7 billion.
Although, as expected, mobile voice revenue dropped (a fall of 8.2 per cent to CNY22.8 billion), mobile data rose 19.3 per cent to CNY44.6 billion. Handset revenue increased nearly 19 per cent to CNY19 billion.
The operator continued to expand its mobile user base, with nine million net additions in the January-June period.
China Telecom also added an average of five million 4G users a month. After adding 31.6 million 4G users this year, its 4G subscribers hit the 90 million mark, a higher number than number two player China Unicom. 4G users now account for more than 40 per cent of its total mobile user base, up from 15 per cent a year ago and 30 per cent last December.
Rival China Mobile – the world’s largest mobile operator – dominates the market. As reported by Mobile World Live today, it added more than 20 million 4G subscribers in July, taking its total to 449 million.
4G network upgrades
China Telecom’s H1 capex increased 10 per cent to CNY40.7 billion but is forecast to decrease 11 per cent for the full year. It is targeting adding 340,000 4G base stations this year, taking its total to 850,000.
It is leasing 550,000 towers from recently established China Tower, with more than half of its towers now leased. It also is partnering with China Unicom to build and share 4G base stations (60,000) and fibre (14,500 km).
The operator said it plans to start refarming the 800MHz band in rural areas in the second half of 2016 and complete the rollout of a nationwide 800MHz network next year. In addition to boosting rural coverage, the company said the LTE network “lays a good network foundation for VoLTE and NB-IoT”.
Rival China Unicom last week reported its H1 net profit fell 80 per cent to CNY1.4 billion, on revenue of CNY140.3 billion, which was down 3.1 per cent. China Mobile fared better, reporting a first half profit increase of 5.6 per cent to CNY60.6 billion ($9.1 billion), on revenue of CNY370.4 billion, up 7.1 per cent.