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Telco rings in 27% fall in Q1 profit
By Zhu Shenshen |
April 21, 2009, Tuesday
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Print Edition
Print Edition
CHINA Telecom's net profit plunged 27 percent in the first quarter year on year as demand for fixed-line services slowed but it reversed a huge loss in the previous quarter, the country's biggest fixed-line phone firm said yesterday.
But the company's mobile service subscriber base increased in the first quarter for the first time since it took over the CDMA business from China Unicom.
China Telecom posted net profit of 4.7 billion yuan (US$688 million) from January to March, compared with net earnings of 6.47 billion yuan a year earlier, as its traditional fixed-line voice business continued to decline. It also reversed the huge loss of 16.4 billion yuan in the fourth quarter. The loss was due to the telco's write-off of its Little Smart business, a citywide cordless phone service. The firm's revenue rose 15 percent to 50.9 billion yuan from January to March.
China Telecom posted a net increase of 4.93 million customers for its mobile phone service to 32.84 million in the first quarter, reversing a drop in the fourth quarter last year when it acquired the CDMA (code division multiple access) business.
The telco's fixed-line accounts dropped to 204 million in the first quarter from 208.4 million in the previous quarter, the company said.
"China Telecom is in transition as it has to develop new areas of business, such as mobile phones and Internet," said Sandy Shen, Gartner Inc's analyst based in Shanghai.
Chinese mobile phone sales will be unchanged this year although global phone sales will drop 10 percent in 2009, due to the impact of the global financial crisis, according to Gartner, a United States-based IT consulting firm.
In January, China issued 3G licenses to three carriers, which will allow users to enjoy high-speed services such as film download and video conference on their mobile phones.
China Telecom has introduced commercial trials of 3G services based on the CDMA 2000 technology in several cities nationwide, including Shanghai.
But the company's mobile service subscriber base increased in the first quarter for the first time since it took over the CDMA business from China Unicom.
China Telecom posted net profit of 4.7 billion yuan (US$688 million) from January to March, compared with net earnings of 6.47 billion yuan a year earlier, as its traditional fixed-line voice business continued to decline. It also reversed the huge loss of 16.4 billion yuan in the fourth quarter. The loss was due to the telco's write-off of its Little Smart business, a citywide cordless phone service. The firm's revenue rose 15 percent to 50.9 billion yuan from January to March.
China Telecom posted a net increase of 4.93 million customers for its mobile phone service to 32.84 million in the first quarter, reversing a drop in the fourth quarter last year when it acquired the CDMA (code division multiple access) business.
The telco's fixed-line accounts dropped to 204 million in the first quarter from 208.4 million in the previous quarter, the company said.
"China Telecom is in transition as it has to develop new areas of business, such as mobile phones and Internet," said Sandy Shen, Gartner Inc's analyst based in Shanghai.
Chinese mobile phone sales will be unchanged this year although global phone sales will drop 10 percent in 2009, due to the impact of the global financial crisis, according to Gartner, a United States-based IT consulting firm.
In January, China issued 3G licenses to three carriers, which will allow users to enjoy high-speed services such as film download and video conference on their mobile phones.
China Telecom has introduced commercial trials of 3G services based on the CDMA 2000 technology in several cities nationwide, including Shanghai.
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