China Telecom profit falls 9.5 percent

Mar 20, 2013 by Kelvin Chan
China Telecom Corp. Chairman Wang Xiaochu smiles as he speaks during the company's 2012 annual result announcement in Hong Kong Wednesday, March 20, 2013. State-owned China Telecom said Wednesday that profit fell 9.5 percent last year because it spent more to market the iPhone as it battled rivals for higher-paying customers. (AP Photo/Kin Cheung)

State-owned China Telecom Corp. said Wednesday that profit fell 9.5 percent last year because it spent more to market the iPhone as it battled rivals for higher-paying customers.

China Telecom, which is also the world's biggest fixed-line phone operator by subscribers, rolled out service for the Apple Inc iPhone in the first half of last year, becoming the second Chinese carrier to offer the popular smartphone.

Chairman Wang Xiaochu said the company stepped up spending on marketing to win over "high-end" subscribers following the launch of the iPhone. The spending will benefit the company in the longer term but put "short-term pressure on profitability," Wang said in a statement.

China's phone companies are facing intense competition and the high costs of upgrading their networks to support the latest mobile technology. China Mobile Ltd., the world's biggest mobile phone carrier by subscribers, reported last week that profit rose just 2.7 percent. The country's third state-owned carrier, China Unicom, is expected to report earnings later this week.

China Telecom said it earned 14.9 billion yuan ($2.4 billion) in 2012 or 18 yuan a share, down from 16.5 billion yuan or 0.2 yuan a share the year before. The decline came despite revenue climbing 15 percent to 283 billion yuan.

Mobile subscribers rose 27 percent to 161 million as the company added 34.1 million new customers, with 33 million of those for faster third-generation service. Broadband internet customers grew 13 percent to 90.1 million while fixed phone lines fell 6.6 million to 163 million.

China Telecom became the country's third big state-owned mobile phone company after it bought a mobile network from rival China Unicom Ltd. in a 2008 restructuring of the government-owned telecoms industry that formed three groups, each with mobile and fixed-line assets.

The restructuring was aimed at reviving competition after the popularity of mobile phones caused China Mobile to dominate the market.

Explore further: The New York Times to cut 100 newsroom jobs

More information: Online: en.chinatelecom.com.cn/

4.5 /5 (2 votes)
add to favorites email to friend print save as pdf

Related Stories

China Telecom profit down 8.3 percent

Aug 22, 2012

(AP) — China Telecom Ltd., one of the country's three major state-owned phone carriers, said Wednesday its first-half profit fell 8.3 percent amid intense competition and high technology costs.

China Mobile 2012 profit rises just 2.7 percent

Mar 14, 2013

China Mobile Ltd., the world's biggest phone carrier by number of subscribers, said Thursday that profit rose just 2.7 percent last year as it grappled with fierce competition and higher costs.

China Mobile in talks with Apple over iPhone

May 16, 2012

China Mobile, the world's biggest mobile operator by subscribers, said Wednesday the company is in talks with Apple to offer the popular iPhone to its users in the Asian nation.

China Mobile 1H profit rises to $9.6 billion

Aug 18, 2011

(AP) -- China Mobile Ltd., the world's biggest phone company by subscribers, said Thursday its first-half profit rose 6.3 percent as sales were boosted by greater usage of mobile Internet devices.

China Mobile net profit rises 1.4%

Oct 22, 2012

China Mobile, the world's biggest mobile operator by subscribers, Monday reported a 1.4 percent rise in net profit for the first nine months of the year, amid robust growth in its subscriber base.

Recommended for you

Germany's Rocket Internet has lukewarm IPO

5 hours ago

Germany's ambitious start-up platform Rocket Internet made its high-profile arrival on the Frankfurt stock market on Thursday but got off to a disappointing start as shares slumped in morning trading.

Samsung China supplier sues US labor watchdog

5 hours ago

A Chinese supplier of Samsung Electronics Co. filed a lawsuit accusing a New York City-based labor watchdog of spreading false rumors of child labor, but the labor group says it has evidence to back up its report.

The New York Times to cut 100 newsroom jobs

21 hours ago

The New York Times Co. says it is cutting about 100 newsroom jobs through buyouts and layoffs in an effort to trim costs and focus more on its digital efforts.

User comments : 0