Monday, March 23, 2009

China Telecom Reports Tumultuous 2008 Changes

In 2008, China Telecom experienced the historic restructuring of the nation's telecommunications market, completed a major expansion through its wireless acquisition and responded to unprecedented natural disasters, including snowstorms and earthquakes. Nevertheless, the company said its operating fundaments remained robust and its underlying results solid.

Excluding the amortization of upfront connection fees and the impact of one-off items including impairment loss of the Personal Handyphone System (PHS) assets and losses related to natural disasters, the operating revenues were RMB184,779 million, a growth of 4.0% over last year. EBITDA was RMB85,889 million, a decrease of 1.3% from 2007, and the EBITDA margin was 46.5%.

Profit attributable to equity holders of the Company was RMB20,066 million, a decline of 12.8% over the preceding year.

China Telecom's 2008 capital expenditures reached RMB48,410 million, accounting for 26.2% of the operating revenues, similar to that for 2007. Free cash flow reached RMB36,768 million, an increase of 8.1% from 2007.

Revenues from the wireline non-voice services reached RMB82,294 million, accounting for 46.1% of the wireline revenue in 2008, an increase of 8.9 percentage points from last year.

Broadband access revenue for the whole year of 2008 reached RMB40,243 million, a rise of 28.6% compared to last year and contributed 5.0 percentage points of the company's overall revenue growth.

Revenue from direct information services including "Best Tone" Services for the whole year reached RMB4,787 million, an increase of 44.6% from 2007.

Revenue from government and enterprises customers increased by 10.9%, while revenue from household customers increased by 2.9%.

China Telecom also launched its new mobile service brand "e surfing" shortly after the acquisition of the CDMA business. The company's mobile service has shown favorable growth momentum with a net increase of 2.72 million customers in the first two months of 2009, a turnaround from the decline in subscribers after the acquisition of the CDMA business in the fourth quarter of last year.

The total number of mobile subscribers reached 30.63 million as at the end of February 2009.

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