Sign-ups soar for China Telecom
The robust user growth may prompt analysts to raise forecasts for the carrier
Mainland fixed-line giant China Telecom Corp's first quarterly operation data showed stronger than expected growth for its xiaolingtong and broadband services, which could prompt analysts to raise their forecasts for the H share.
China Telecom signed up 3.6 million new users in the three months to September, more than two-thirds of the 5.3 million new subscribers it signed up in the first half of this year.
About two-thirds of the new users were from its xiaolingtong service - a cheap citywide mobile service that is poaching wireless revenue from the mainland's two fully licensed mobile carriers.
'Despite our expectation that it would slow down in the second half of the year, they may in fact continue to accelerate,' ABN Amro Asia telecommunications analyst Helen Zhu said.
'The company should be able to exceed our year-end line estimate of 67.2 million as they have already reached 65.8 million by September.'
China Telecom, which operates fixed-line services in the mainland's four richest provinces, beat analysts' expectations with robust subscriber growth for its xiaolingtong service.
The carrier signed up 2.3 million new xiaolingtong users in the September quarter, compared with the 2.2 million new users it signed up in the first half, bringing the number of users of the service to 7.7 million.
Xiaolingtong now accounts for 11.7 per cent of the carrier's 65.8 million lines.
According to Thomson First Call, China Telecom's consensus net profit has been raised by 1.45 per cent in the past seven days and by 5 per cent in the past month.
BOCI analyst Allan Ng revised upwards his forecast for China Telecom's earnings this year by 2.4 per cent to 13.98 billion yuan (HK$12.98 billion) after the stronger than expected subscriber growth in the third quarter.
Growth in its broadband service also topped analysts' projections, adding 955,000 new users and bringing its total to 3.51 million, up from the average of 630,000 new sign-ups for the first two quarters.