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August 28, 2009

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Telco rings in 29% drop in H1 net profit

NET profit at China Telecom Corp, which acquired China Unicom's CDMA business last year, tumbled 29 percent year on year in the first half of this year because of spending on mobile phone promotion and network construction.

China Telecom, the nation's largest fixed-line operator, had net profit of 9 billion yuan (US$1.3 billion) in the first six months. The profit, however, beat analysts' expectations of 8.3 billion yuan.

"Despite its short-term pressure on the company's profitability, the increase in marketing initiatives for the development of our mobile services will significantly enhance future sustainable business and value creation for the company," China Telecom's chief executive officer Wang Xiaochu said in a statement yesterday.

By the end of June, the telco boasted a mobile phone subscriber base of 39.28 million, an increase of 11.37 million in the first six months, or 40.7 percent higher from the end of last year.

Its fixed-line subscriber base numbered 199 million by the end of June, a drop of 4.3 percent from six months ago.



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