Costs and subsidies hurt telco
By Zhu Shenshen |
October 30, 2012, Tuesday
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Print Edition
Print Edition
CHINA Telecom Corp's third quarter net profit fell 7.3 percent because it has to incur rising costs to compete with bigger rivals and offer subsidies for Apple Inc's iPhone when it expanded into the mobile sector.
Net profit for the country's biggest fixed-line carrier declined to 3.75 billion yuan (US$595 million) from 4.05 billion yuan a year ago.
Its revenue in the third quarter jumped 16 percent to 72 billion yuan. In the first nine months, China Telecom's net profit fell 8 percent to 12.5 billion yuan, while revenue grew 15 percent to 210 billion yuan.
The "intensifying mobile competition" (with added cost) is one of the major risks facing China Telecom, Morgan Stanley said in a statement yesterday.
In the third quarter, the telco's mobile unit attracted an extra 8.44 million users, giving it 152.6 million 3G users.
Net profit for the country's biggest fixed-line carrier declined to 3.75 billion yuan (US$595 million) from 4.05 billion yuan a year ago.
Its revenue in the third quarter jumped 16 percent to 72 billion yuan. In the first nine months, China Telecom's net profit fell 8 percent to 12.5 billion yuan, while revenue grew 15 percent to 210 billion yuan.
The "intensifying mobile competition" (with added cost) is one of the major risks facing China Telecom, Morgan Stanley said in a statement yesterday.
In the third quarter, the telco's mobile unit attracted an extra 8.44 million users, giving it 152.6 million 3G users.
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