Tuesday, April 5, 2005

China Netcom Reports 6.22M Broadband, 80.4M Fixed Line Subscribers

China Netcom, the incumbent operator across northern China and Shanghai, reported key operating statistics and annual results for the year ending 31 December 2004. Some highlights:

  • Consolidated revenue was reported at RMB 64,922 million and net profit reached RMB 9,248 million, representing an increase of RMB 5,024 million and RMB 20,359 million, respectively, over previous year.


  • The Company continued to maintain its market dominance in the northern service region with a 94.5% market share in local telephony and a significantly expanded market share in broadband to 95.8% at the end of 2004, compared to 89.2% in 2003.


  • Broadband subscribers grew by 145.3% to 6.22 million. In its Northern service region, China Netcom's market share reached 95.8% at the end of 2004, compared to 89.2% at the end of 2003. Broadband and Internet services revenue reached RMB 5,058 million, which was 44.8% higher that of 2003.


  • Fixed-line subscribers grew substantially to 80.4 million, an increase of 15.5% from the end of 2003 as the number of PHS subscribers more than doubled to reach 15 million and accounted for 18.8% of total fixed line subscribers by the end of the year. PHS usage more than tripled, which more than offset a slight 5.8% decrease in PSTN usage resulting from mobile substitution. Total usage of fixed-line excluding dial-up increased 9.6% while dial-up usage decreased rapidly due to the prevalent upgrading to broadband.


  • Domestic long distance usage grew approximately 12.9% in 2004, while international long distance usage increased close to 3.9%. The percentage of VOIP usage increased for both domestic long distance and international long distance. This, combined with lower effective tariffs, prompted a decline in overall long distance revenues by 3.4% in 2004 while domestic long distance revenues remained relatively stable.


  • Revenues from managed data services were RMB1,217 million in 2004, an increase of RMB 2 million, or 0.2%, from RMB1,215 million in 2003, primarily due to growth in the total leased bandwidth of FR, ATM and MPLS VPN services. Revenues from leased line services were RMB1,825 million in 2004, a decrease of RMB621 million, or 25.4% from RMB2,446 million in 2003 as other carriers chose to build and use their own networks.


  • Revenues for International Telecommunication Services over the company's pan-Asian network grew 91.7%, reaching RMB 2,643 million in 2004 compared to RMB1,379 million in 2003 and accounted for 4.3% of total revenues compared to 2.5% in 2003


China Netcom Chairman, Mr. Zhang Chunjiang, commented, "We expect that China will maintain its robust economic growth and that demand for communication services, particularly broadband access, will continue to grow. For China Netcom, 2005 will be 'the year of execution.' We plan to take advantage of our dominant market position, service quality, broadband leadership, rapid growth in international telecommunication services and growing brand recognition as an Olympic marketing champion."http://www.china-netcom.com

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