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SCMP Reporter

China Telecom Corp, the country's biggest fixed-line operator, yesterday issued a profit warning for last year's earnings as a result of a write-down of assets for its xiaolingtong wireless fixed service.
Analysts estimate a write-down of between 10 billion yuan (HK$11.14 billion) and 20 billion yuan, leading to full-year results of between a 5 billion yuan net loss and a 10.1 billion yuan net profit.
China Telecom said it expected its financial results to decline significantly compared with those in 2007. Its results are due on March 24.
The company said it was conducting impairment tests on the carrying amount of the group's long-lived  assets.
'A proposal for making a significant amount of provision for impairment loss on its PAS (personal access system, branded as xiaolingtong) asset will be submitted to the board for review and approval on March 24,' the company said in the announcement.
BOC International expected China Telecom to write down xiaolingtong assets by 10 billion yuan last year and 5 billion yuan this year. It also estimated between 9 billion yuan and 10 billion yuan would be booked for subsidies of mobile handsets this year and next.
Merrill Lynch estimated China Telecom's mobile business could record a profit margin on earnings before interest, tax, depreciation and amortisation of 32.2 per cent, with an average revenue per user per month of 64.70 yuan.
China Telecom paid 43.8 billion yuan last year to China Unicom for the acquisition of its CDMA mobile business for 3G mobile services, as part of the government-mandated restructuring of the  telecommunications industry.
The carrier received a 3G mobile licence this year and plans to roll out the service as early as the end of this month in major cities such as Beijing and Shenzhen.
Meanwhile, commerce minister Chen Deming said yesterday that the mainland had invested 100 billion yuan in the 3G mobile industry.
'Many countries around the world have participated in the project. Huawei Technologies and ZTE Corp have established more than 100 points of presence in overseas markets, with more than 10,000 technicians and engineers,' he said at a press conference in Beijing.
Shares in China Telecom rose 3.79 per cent yesterday to close at HK$2.74.



China Telecom expects loss over write-down