China Telecom books stable growth

18 Mar 2015

State-owned full service provider China Telecom has booked operating revenue of CNY324.39 billion (USD52.7 billion) for the full year ended 31 December 2014, up 0.9% compared to the previous year, despite the negative impact of the implementation of VAT in June 2014 and intensifying competition in the mobile data market. Service revenue accounted for CNY287.38 billion of the company’s turnover, including CNY120.27 billion from mobile services (up 5.7% year-on-year) and CNY167.11 billion from the fixed line segment (+1.2% y-o-y). Meanwhile, cost-saving measures targeting selling expenses, in particular terminal subsidies, led to a 16.3% drop in turnover from terminal sales to CNY31.34 billion. EBITDA for the year was down 1.8% compared to 2013 at CNY94.85 billion, with EBITDA margin falling by 1.6 percentage points to 33.0%. Nevertheless, net profit edged up 0.8% y-o-y to CNY17.68 billion.

Telecom claimed 185.62 million mobile users at the end of 2014, representing only a small increase from 185.58 million twelve months previously, although the cellco improved its subscriber mix, increasing the number of 3G/4G users from 103.11 million to 118.63 million. Price erosion has led to a drop in ARPU, however, with overall monthly ARPU dipping from CNY54.8 to CNY54.0 whilst increasing competition in the data space saw 3G/4G ARPU drop from CNY71.5 to CNY67.5. In the fixed line space, meanwhile, growth has been concentrated in the data segment, with turnover from broadband services growing 3.8% to CNY73.49 billion whereas fixed voice revenue fell by 13.1% to CNY33.59 billion. Broadband subscriptions increased from 100.1 million at end-2013 to 106.95 million, of which fibre-to-the-home (FTTH) customers totalled 43 million – up from 27 million in 2013.

China, China Telecom Corporation