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October 21, 2009

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Weak demand sinks telco's net

CHINA Telecom Ltd yesterday said its net profit in the first three quarters of this year sank 34 percent on weakening demand for traditional fixed-line phone services.

It earned 11.4 billion yuan (US$1.7 billion) for the nine months ended September 30, compared with 17.2 billion yuan in the same period a year earlier, the Beijing-based company said. That was despite a 15.3-percent rise in revenue to 154.7 billion yuan.

The company did not give separate figures for the third quarter.

With demand for fixed-line services falling as customers opt for mobile phones, China Telecom is trying to drive revenue growth by promoting high-speed Internet access and other new services. It expanded into mobile phone service last year, taking over a CDMA network from rival China Unicom Ltd in a government-orchestrated industry restructuring.

Rolling out mobile services is putting pressure on overall profitability but will enhance the company's finances in the long term, it said.

China Telecom's fixed-line accounts fell to 194 million at the end of last month from 199 million in the previous quarter.

The company is expanding its broadband and wireless services, reporting nearly 47 million mobile service users by September 30, up from 39 million at the end of June.


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