China Telecom loses subscribers in 4G race
The mainland's third-largest mobile player records drop in users as profit climbs 17.9 per cent and revenue jumps 6.9 per cent in quarter
China Telecom saw a drop in the number of mobile subscribers in the first quarter as competition intensified after Beijing gave approval for the three major telecommunications operators to launch 4G services in December.
China Telecom, the mainland's largest fixed-line network operator and third-largest mobile services operator by subscribers, said first-quarter net profit rose 17.9 per cent from a year earlier to 5.5 billion yuan (HK$6.8 billion) while revenue grew 6.9 per cent to 83.2 billion yuan.
The company had 183.2 million mobile subscribers in the quarter, a drop of 2.38 million from the preceding quarter. However, the number of 3G subscribers rose 1.03 million to 104 million.
The drop in mobile subscribers was mainly due to increasing market competition driven by the launch of 4G services and strengthened marketing promotion by rivals, China Telecom said in a filing to the Hong Kong stock exchange yesterday.
Ricky Lai, an analyst at Guotai Junan International, said the jump in profit was helped by the expansion of the 3G users' pool.
The average revenue per user was 71 yuan, unchanged from the year-ago period.
The company might continue to lose users in the current quarter because of promotions launched by its rivals, according to Lai.