Better than expected results for China Telecom Corp

31 Mar 2005

China Telecom Corp, the largest fixed line telco in China, has reported a doubling in year-on-year profits. Net income rose to CNY28 billion (USD3.4 billion) for the twelve months to December 31 2004, up from CNY13.9 billion a year earlier, while sales climbed 6.4% to CNY161 billion. The company said it revised its 2003 figures after acquiring ten provincial networks – which reported a combined CNY10.8 billion loss – from parent China Telecommunications Corp in the first half of 2004. This completed the network acquisition process.

At the end of 2004 China Telecom Corp had 187 million fixed line customers, a 16% increase in twelve months, while broadband internet subscribers rose 91% to 13.8 million. Subscribers to ‘Little Smart’ – a limited mobility wireless service known locally as XiaoLingTong – more than doubled to 42.2 million last year from 18.4 million at the end of 2003. Despite the steep growth, investment in the service is being scaled back as it waits to see if it will receive a 3G licence when they are issued later this year.

The Beijing-based company is also waiting to hear from the government about its plans to buy one of the two wireless networks owned by China Unicom. Unicom is the only operator in the world to operate and maintain GSM and CDMA networks in equal measure. China Telecom Corp hopes to acquire and run one of the networks jointly with fellow wireline operator China Netcom.

China, China Telecom Corporation