China Telecom net profit up 4.5pc on back of 4G subscriber and mobile services growth

China’s largest fixed-line telecommunications operator China Telecom on Thursday reported a 4.5 per cent jump in net profit thanks to a steady increase in the number of 4G users and a rise in mobile service revenues.

The company’s net profit jumped to 5.35 billion yuan (US$775 million) for the first quarter of the year, compared to 5.12 billion yuan in the same period last year.

China Telecom’s mobile subscribers grew 3 per cent to 222 million in the first quarter, of which over 62 per cent are 4G subscribers.

Operating revenue for the telecom provider grew 5.8 per cent year on year to 91.43 billion yuan.

China’s telecommunications operators are expected to feel the squeeze on revenues this year after the Chinese government called for a reduction in tariffs.

In March, Premier Li Keqiang’s call for the telecommunications sector to “raise speed, drop prices” by removing domestic roaming fees and levelling out local and long-distance domestic call charges.

These fees accounted for almost 10 per cent of China Telecom’s 309.6 billion yuan in service revenues last year, the company said.