Tuesday, August 24, 2010

China Telecom to Accelerate FTTH and Mobile Rollouts

Citing continued mobile and landline broadband growth, China Telecom reported a 4.9% growth in revenues to RMB 107,552 million and a 4.7% growth in net profit for the first half of 2010 compared to a year earlier. Profit attributable to equity holders of the Company was RMB8,811 million, representing an increase of 4.7% from the same period of last year. Robust earnings trajectory marked a good start of the result improvement. Basic earnings per share was RMB0.109. Capital expenditure was RMB17,918 million, an increase of 5.2% over the same period of last year. Free cash flow reached RMB18,591 million.

Some highlights from the first half of 2010

  • China Telecom added 18.43 million mobile subscribers in the first half of the year, giving it a total of 74.52 million, of which 7.18 million were 3G subscribers. This puts the company's share of the mobile
    market in China at close to 10%, which is double from 2008. Mobile ARPU declined slightly to RMB 58.1 for 1H2010 vs RMB 59.5 in FY2009. The company is currently supporting over 700 CDMA handset models, with over available for 3G.

  • Revenue from non-voice services as a percentage of the operating revenues further increased to 56.3%, amongst which wireline broadband access revenue attributed to 24.5% of the operating revenues.

  • In broadband, China Telecom continues to hold the leading market share. In the first half of 2010, there was a net addition of 4.87 million wireline broadband customers, giving the company a total of 58.33 million broadband lines. More than 60% of the company's CAPEX in 1H2010 was focused on broadband expansion.

  • For traditional land lines, China Telecom recorded a net loss of 7.61 million PAS subscribers, leaving it with 181 million access lines in service at the end of June this year.

Looking ahead, China Telecom said its strategy will focus on sustainable development of four pillars -- mobile, broadband, wireline voice, and valued-added and integrated information services.

China Telecom will accelerate it broadband network upgrades, especially FTTH. In city areas, its network currently is capable of 4 Mbps and above with 44% coverage at 20 Mbps or more. For its 2010 budget, CAPEX will be increased by RMB 5 billion over previous guidance to RMB 44 billion. For 2011, the CAPEX budget will be increased by a further RMB 10 billion, although final budget figures will be updated with regard to business activity.

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