FAQs
In the first half of 2018, operating revenues amounted to RMB193.0 billion, increased by 4.7% over the same period last year. Service revenues amounted to RMB177.6 billion, representing an increase of 7.0% over the same period last year (if excluding the impact of IFRS 15 on the current period, it represented an increase of 8.5% over the same period last year) with revenue growth surpassing the industry average for consecutive years. EBITDA amounted to RMB55.9 billion, increased by 6.5% over the same period last year while EBITDA margin (EBITDA divided by service revenues) was 31.5%. Net profit amounted to RMB13.6 billion, representing an increase of 8.1% over the same period last year.
In the first half of 2018, mobile service revenues amounted to RMB83.6 billion, representing an increase of 10.3% over the same period last year and continuing to maintain double-digit growth. The total number of mobile subscribers reached 282 million, representing a net increase of 31.66 million which was more than double of the net additions in the same period of last year and reached a historical record high. It accounted for 46.5% market share in the net additions of the industry and the overall total market share increased to 18.9%. Of which, the total number of 4G users reached 217 million, representing a net increase of 35.27 million while the penetration rate reached 77%.
In the first half of 2018, the mobile handset Internet access revenue amounted to RMB54.5 billion, increased by 26.5% over the same period last year, and became the Company's No.1 source of incremental service revenue. The aggregate handset Internet data traffic had strong growth momentum with 4G DOU reached 4,637MB, increased by more than two times over the same period last year.
In the first half of 2018, wireline service revenues amounted to RMB94.0 billion, representing an increase of 4.2% over the same period last year with further enhancement of growth rate. The total number of wireline broadband subscribers reached 141 million, representing a net increase of 7.09 million and also achieved a historical high. Of which, the proportion of wireline broadband subscribers of Hundred-Mbps reached 56%, representing an increase of 19 percentage points over the same period last year. The ARPU of broadband access was RMB47.2 while the broadband blended ARPU (total monthly average revenues from Smart Family and broadband access divided by the average number of broadband subscribers) was RMB52.5, maintaining the leading position in the industry.
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 7 September 2018