China Telecom set to cash in on mobile data and internet tech, analysts say

The country’s largest fixed-line telecom operator China Telecom is set to rake in profits over the next year on mobile data usage and emerging internet technology, analysts say.

The state-owned company is betting on 4G cellular networks to continue driving growth, as it sees average data consumption doubling and average revenue per user for 4G networks increasing by 15 to 30 per cent so far this year, according to a report from broker Kim Eng Securities.

“Management [has] remained bullish on overall subscriber growth, especially on 4G,” Kim Eng analysts Mitchell Kim and Jeffrey Kwong said.

China has worked in recent years to improve mobile and fixed-line broadband infrastructure across the country, and this appears to have paid off for China Telecom, which grew internet access revenue by 3.3 per cent in the first half. Total subscribers rose to 118 million as of end June, compared to 109.6 million a year earlier, Macquarie Research said.

This growth comes as China has begun conducting trials of so-called high-speed 5G broadband mobile equipment across 100 cities, amid global industry discussions for a single 5G standard.

While Kim and Kwong say the country’s state-owned telecom operators China Telecom, China Mobile, and China Unicom, are still at peak 4G investment and won’t invest in 5G until a standard is set, which could happen as early as 2019.