China Telecom says 1H profits slip 8%

28 Aug 2008

China Telecom has revealed that its first-half earnings slipped 8%, as revenues for fixed line voice services shrank, and warned it faces pressure on profits as Beijing prepares to restructure the telecoms industry. Net profit for the six months ending 30 June was RMB12.7 billion (USD1.85 billion), down from RMB13.8 billion in the year-earlier period. China Telecom’s efforts to expand the market for fixed line voice service suffered ‘immense pressure’ in the first half, due to the falling price of mobile services, Chairman and CEO Wang Xiaochu said in a statement. The company should benefit in the long run, Wang said but added that it would face ‘downward pressure on our profit’ as it invests to get its mobile business up and running.

China Telecom’s first half revenues for voice service fell 11.8% from the year-earlier period to RMB50.5 billion. Revenues for internet and data services rose 27.3% to RMB24.5 billion, while those for business services climbed 31.6% to RMB12 billion. China Mobile’s total number of access lines fell by 5.4 million, or 2.5%, to 215 million at the end of June 2008.

China, China Telecom Group