Telecom Equipment News
- China Telecom net drops on mobile rivalry
Date: 29-Aug-2007 Sources: (Shenzhen Daily)
CHINA Telecom Corp., the nation's biggest fixed-line phone company, reported a 5 percent decline in first-half profit after competition with China Mobile Ltd. and China Unicom Ltd. slowed user growth.
Net income fell to 13.48 billion yuan (US$1.8 billion), or 0.167 yuan per share, from a restated 14.16 billion yuan, or 0.175 yuan, a year earlier, Beijing-based China Telecom said yesterday. Sales rose 1.5 percent to 88.6 billion yuan. Figures include connection fees.
Ten times as many Chinese signed up for wireless-phone services than for fixed lines during the first half, lured by lower rates from China Mobile and China Unicom. China Telecom chairman Wang Xiaochu has applied for a permit to offer third-generation wireless services, which allow faster downloads of music and video.
'We expect further pressure from mobile substitution in the second half,'' Jeffrey Tan, an analyst at Credit Suisse in Hong Kong, said before the earnings announcement.
Excluding connection fees of 1.67 billion yuan, net income rose 1.3 percent to 11.82 billion yuan, or 0.15 yuan per share. Sales increased 2.5 percent to 86.96 billion yuan.
THE Chinese Government in 2001 stopped connection fees, a one-time charge for linking fixed-line users to an operator's main network. The charges are being amortized by China Telecom and China Netcom Group Corp. (Hong Kong) Ltd., the nation's second-largest fixed-line company, over 10 years.
China Telecom was expected to report first-half net income of 11.9 billion yuan excluding the fees, based on the median estimate of six analysts in a Bloomberg survey.
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