FAQs
For the first three quarters of 2018, China Telecom proactively adapted to the impacts of cancellation of data roaming fees and implementation of new revenue standard with steady promotion of business operations as planned. The operating revenues were RMB284,971 million, representing an increase of 3.6% over the same period of last year, of which the service revenues were RMB264,934 million, representing an increase of 6.0% over the same period of last year. EBITDA was RMB80,819 million, representing an increase of 2.5% over the same period of last year while EBITDA margin (calculated based on EBITDA divided by service revenues) was 30.5%. The profit attributable to equity holders of the Company was RMB19,034 million, representing an increase of 2.7% over the same period of last year.
For the first three quarters of 2018, facing increasingly intensified market competition coupled with complicated and changing industry environments, China Telecom adhered to established development strategy with excellent execution and continued to implement deepened reforms and innovation, achieving new breakthrough in scale. With further implementation of the “Speed Upgrade and Tariff Reduction” policy, the Company cancelled data roaming fees from 1 July 2018. The number of mobile subscribers reached approximately 294 million, representing a net addition of 44.07 million; of which the number of 4G users reached 230 million, representing a net addition of 48.41 million and maintained good growth momentum.
For the first three quarters of 2018, the handset data traffic increased by 366% over the same period of last year. The monthly average data traffic per 4G user reached 5,219 MB and maintained strong growth. The average mobile service revenue per user per month (ARPU) decreased over the same period of last year.
Facing intensified market competition, wireline broadband subscribers achieved favourable growth and reached 144 million, representing a net addition of 10.31 million. Despite the decline in the ARPU of broadband access, the growth in wireline broadband subscribers vigorously supported the rapid development of Smart Family service. With continuous strengthening of the advantages of ecological cooperation of the Company, the number of e-Surfing HD subscribers exceeded 100 million while IDC, cloud and Big Data businesses achieved rapid development, expediting the growth of Intelligent Applications ecosphere (included Smart Family ecosphere, DICT ecosphere, IoT ecosphere and Internet Finance ecosphere).
In the first half of 2018, revenues from Intelligent Connections ecosphere increased by 3.8% over the same period last year, accounting for 82.5% of service revenues. Revenues from Intelligent Applications ecospheres including the ecospheres of Smart Family, DICT (converged smart application service integrating three technologies, namely communications technology, information technology and cloud & Big Data technology), Internet of Things (IoT) and Internet Finance, accounted for 17.5% of service revenues and increased by 24.8% over the same period last year, becoming a key revenue growth driver of the Company.

In the aspect of Intelligent Connections ecosphere, we firmly grasped the upgrade of users’ demand and insisted on customers’ value operation. With in-depth integration, innovative products as well as strengthened edges on terminals, channels and services, scale development capabilities were consistently enhanced.

In the aspect of Smart Family ecosphere, we strengthened the ecological cooperation of contents and smart homes, procuring to be complementary with the advantages of Intelligent Connection ecology. Leveraging three interactive portals including e-Surfing gateway, intelligent set-top box and e-Surfing housekeeper app, we fully exploited the competitiveness of subscribers scale, channel and services. e-Surfing HD, intelligent WiFi networking services, family cloud and smart homes progressively became core applications of Smart Family. In the first half of 2018, the e-Surfing HD revenues increased by 29.8% while the net increase of e-Surfing HD subscribers was 12.54 million, reaching a total of 98.30 million with 70% penetration rate.

In the aspect of DICT ecosphere, we fully leveraged the integration advantages of cloud with network and accelerated the breakthrough in cloud products capabilities. With our firm perseverance to grasp development opportunities for corporates subscribing for cloud, we accomplished breakthrough in projects covering government cloud services and key industry benchmark customers, affirming the Company’s position as a major force in the area of DICT services. In the first half of 2018, revenues from IDC service maintained a growth rate of 20% and the growth rate of total revenues from cloud and Big Data reached 120%.

In the aspect of IoT ecosphere, we endeavoured to reinforce the efficiently-centralised operations, expedite the construction of platform capabilities and strengthen ecological cooperation. On the foundation of expansion of connection scale, we extended our services to data operation and explored the innovation of business models. In the first half of 2018, IoT services achieved accelerated breakthrough with revenue growth rate attaining nearly 90%. The net increase of connected devices was nearly 30 million, being doubled as compared to the same period last year and reached a total of 74.19 million.

In the aspect of Internet Finance ecosphere, we persisted in differentiated development and leveraged BestPay red packet as main portal to procure in-depth integration with fundamental businesses and promote integrated instalment model with Internet cooperative partners, effectively driving customers growth and enhancing customers loyalty. In the first half of 2018, the number of average monthly active users of Internet Finance (BestPay) exceeded 37.70 million, representing an increase of 34% over the same period last year. The gross merchandise value of personal accounts increased by nearly 90% compared to the same period last year.
Taking into consideration the return to shareholders, the Company's profitability, cash flow level and capital requirements for its future development, the Board of Directors has decided to recommend at the forthcoming shareholders' meeting that a final dividend equivalent to HK$0.115 per share for the year 2017 to be declared, representing an increase of 9.5% over the year 2016.
2018 full year CAPEX budget remains unchanged at RMB75 billion. In the first half of 2018, CAPEX was RMB32.9 billion, representing a decrease of 19.9% with persistent and appropriate control.
Despite continuous reduction in investment scale, enhancement of network fundamental capabilities still leaped forward a new progress while integrated customers experience maintained industry-leading position. Leveraging superior full coverage 4G network characterised by high- and low-frequency collaboration, we continuously optimised in-depth coverage for key scenes including high-speed rail and high-density business districts and deployed dynamic bandwidth expansion in accordance with users’ demand. The number of 4G base stations reached 1.2 million while the network utilisation rate was 36%, offering vigorous support to the development of large data traffic. With efficient promotion of all-fibre network construction, full coverage of Fibre-to-the-Home (FTTH) for households in cities and towns was primarily accomplished while Gbps broadband was deployed in more than 170 cities on demand. The bandwidth of IP metropolitan area network and backbone network reached 500Tbps and 170Tbps respectively, maintaining industry-leading position. With accelerated promotion of eMTC (enhanced Machine-Type Communications) pilot launch, we basically accomplished the whole-range speed rate IoT structure combining high, medium and low speed of 4G, eMTC and NB-IoT, respectively and offered differentiated services capabilities on demand. With our continuous efforts to promote evolution of network cloudification and intelligentisation, we pragmatically implemented CTNet2025 network reconstitution and promoted self-R&D and scale commercial launch of key new products such as intelligent self-selective dedicated line and intelligent gateway based on Software-Defined Networking (SDN) technology, deploying SDN to enhance network operation and maintenance efficiency on cloud resources pool and backbone network. Based on the Network Functions Virtualisation Infrastructure (NFVI) standard unified with China Telecom cloud network, we commenced pilot launch of virtual IP Multimedia Subsystem (vIMS) embedded with full decoupling function, laying the foundation for full 5G network cloudification.
In the first half of 2018, the Company proactively embarked on exploring the landscape of 5G development and accumulating capabilities. We orderly promoted technology research as well as research and development of applications, formulated evolution path for future technology and published 5G Technologies White Paper. Network trials in scale were conducted in many cities focusing on promotion of applications trials including HD video, AR/VR, automated driving, drone and industrial Internet. Research on collaborative network trial for 5G and 4G was commenced, planning well for the landscape of 5G network, applications and business models.
In the first half of 2018, tower leasing fee rose to about RMB7.8 billion. By the end of June 2018, the number of tower leased was about 690,000.

Last updated on 5 November 2018