China Telecom awaits Apple deal after profit surge
As a much anticipated deal with Apple looms, China Telecom is gearing up to accelerate development of its mobile internet services after posting solid earnings growth in the first nine months of the year.
The mainland's biggest fixed-line network operator yesterday said its net profit for the period up to last month rose 10.1 per cent to 13.86 billion yuan (HK$16.92 billion), from 12.59 billion yuan a year earlier, on steady mobile subscriber growth and strong adoption of broadband internet and data services.
The number of mobile subscribers at the end of last month was 116.95 million, including 28.43 million 3G users. Fixed-line broadband subscribers totalled 73.69 million, a net addition of 10.21 million users during the period.
Revenue, excluding the amortisation of upfront connection fees, grew 11.8 per cent to 182.36 billion yuan from 163.16 billion yuan.
'The company's operation was on track as planned for the first three quarters of the year,' chairman Wang Xiaochu said.
Like those of larger mainland rivals China Mobile and China Unicom, China Telecom's third-quarter profit missed analysts' estimates because of intense competition for high-value 3G subscribers.
Net profit for the three months rose 9.7 per cent year on year to 4.15 billion yuan on sales of 62.2 billion yuan. That was lower than the 4.31 billion yuan average profit forecast of five analyst estimates.
China Telecom, which lags behind its rivals in terms of wireless network subscribers, is expected to receive a big boost to its 3G operations when it becomes Apple's next carrier-partner for the iPhone.
'We should see an announcement made early next year,' said Sandy Shen, a research director at market analyst firm Gartner. 'China Telecom is working very hard to attract star products for its CDMA2000-standard 3G network.
'I think the addition of the iPhone will be a very good fit with the operator's strategy.'
Apple designed the new iPhone 4S to support 3G networks based on the so-called CDMA2000 1x EV-DO standard and more mature WCDMA standard in a single device.
Unicom, Apple's mainland carrier-partner, runs a WCDMA-based 3G network, while China Mobile runs a 3G network built on the government-backed TD-SCDMA standard.
China Telecom's share price fell 4.37 per cent to close at HK$4.81 yesterday while China Mobile dropped 1.91 per cent to end at HK$74.65 and Unicom lost 1.74 per cent to settle at HK$15.82.