China Telecom Corporation Limited (China Telecom) has released its operating results for the first six months of 2012. Consolidated fixed line, mobile and broadband revenues reached CNY138.021 billion (USD21.775 billion) in January-June 2012, up 14.8% year-on-year from CNY120.222 billion in H1 2011. Of the total revenue, mobile services accounted for CNY54.128 billion, an increase of 43.2% from CNY37.786 billion in the same period a year earlier. In the first half of 2012 China Telecom added a net total of 17.71 million new mobile subscribers (since 1 January) to reach a total of 144 million at 30 June, and claiming a mobile subscriber market share of approximately 13.8% at that date. Amongst this total, the net addition of 14.67 million 3G subscribers took its 3G user total (all based on CDMA2000 1xEV-DO technology) to 50.96 million at mid-2012. 3G handset data traffic increased rapidly, with average monthly data usage per user reaching 111MB, while 2G to 3G user migration gained further traction, and the operator also leveraged its iPhone offering via an increase in marketing initiatives to increase its share of the high-end handset market and enhance revenue growth; despite the short-term pressure on profitability caused by the iPhone-related marketing, the company expects the strategy to foster long-term sustainable growth. TeleGeography’s GlobalComms Database says that of the country’s three mobile operators, China Telecom has the highest level of 3G penetration within its customer base, with 36% of its users on 3G subscriptions at end-June 2012. In a further announcement today, China Telecom reported that its total (including 3G) mobile subscribers reached 146.91 million (53.81 million 3G) at the end of July 2012, after net monthly additions of 2.73 million (2.85 million 3G).
Wireline (including broadband) revenues grew 1.8% year-on-year to CNY83.893 billion in H1 2012, as China Telecom accelerated the penetration of fibre broadband. In the first half of the year fixed broadband internet revenue was CNY33.369 billion, representing an increase of 12.1% over the same period of 2011. The net addition of 6.89 million broadband subscribers in January-June 2012 took its total to 83.70 million, maintaining its leading market share. China Telecom’s total number of fixed access lines in service stood at 167 million at end-June 2012, representing a net decrease of 2.1 million from the end of December 2011, while pure wireline voice revenue in the first half of 2012 amounted to CNY22.241 billion, and as a proportion of the group’s total turnover the segment decreased to 16.1% in 1H12.
Consolidated group EBITDA inched up by 0.3% to CNY48.760 billion in the six months ended 30 June 2012, based on EBITDA figures calculated before CDMA network capacity lease fees, due to a simultaneously announced agreement to purchase CDMA assets from parent company, China Telecommunications Corporation. H1 2011 data was restated to include the retrospective impact of adopting an amendment to International Financial Reporting Standard 1 (IFRS 1) in the second half of 2011. Six-month net profit attributable to shareholders fell by 8.3% year-on-year to CNY8.814 billion (down from CNY9.616 billion). Total CAPEX was CNY25.647 billion in the period under review, accounting for 18.6% of consolidated revenues.