FAQs
In the first three quarters of 2021, the Company captured the period of strategic opportunities brought by the booming digital economy. Taking A-share IPO as an opportunity, the Company comprehensively deepened its “Cloudification and Digital Transformation” strategy, expanded integrated intelligent information services with customer-oriented approach, built core capabilities for sci-tech innovation, and constructed new information infrastructure featuring cloud-network integration. The Company also expanded the industry and capital ecologies with open cooperation, speeded up system and mechanism reforms, and reinforced the solid foundation of network and information security so as to advance its green development and achieve rapid growth of operating results.

For the first three quarters of 2021, operating revenues were RMB329,241 million, representing an increase of 12.5% over the same period of last year, of which service revenues were RMB304,271 million, representing an increase of 8.3% over the same period of last year. The profit attributable to equity holders of the Company was RMB23,327 million, representing an increase of 24.7% over the same period of last year and an increase of 17.1% over the same period of last year excluding the one-off after-tax gain from the disposals of E-surfing Pay Co. Ltd and China Telecom Leasing Corporation Limited of RMB1,416 million. Basic earnings per share was RMB0.28, representing an increase of 21.7% over the same period of last year. EBITDA was RMB96,348 million, representing an increase of 4.5% over the same period of last year. EBITDA margin (calculated based on EBITDA divided by service revenues) was 31.7%, and free cash flow was RMB23,168 million, representing an increase of 19.6% over the same period of last year.
The Company continued to deepen co-building and co-sharing, leveraged the edge of deepened integration of 5G and e-Surfing Cloud to forge a high-quality service experience, while also comprehensively deployed the application and privilege portfolio for individual customers with an aim to establish the individual digital life covering entertainment, work and study, expand the potential value space for 5G, and propel enhancement in both scale and value of mobile subscribers. In the first three quarters of 2021, the revenues from mobile communications service amounted to RMB140,528 million, representing an increase of 6.3% over the same period of last year. The total number of mobile subscribers reached approximately 370 million with a net addition of 18.64 million, which continued to maintain an industry-leading position. The number of 5G package subscribers reached approximately 156 million with a net addition of 69.04 million, while the penetration rate reached 42.1%. The total handset data traffic increased by 39.3% year-on-year, and mobile ARPU amounted to RMB45.4, which continued to increase over the same period of last year.
In the first half of 2021, the Company’s 5G CAPEX was RMB11.1 billion with 50 thousand base stations self-built, and 2021 5G CAPEX plan unchanged at RMB39.7 billion. The Company continued its cooperation with China Unicom on co-building and co-sharing of 5G networks. Making full use of the complementary network resources of both parties and the adjacent spectrums in 3.5GHz/2.1GHz, the Company rapidly enhanced the construction efficiency and coverage of its 5G network. The number of 5G base stations in use reached 460,000 and 5G network coverage will extend to counties and developed towns within this year. We continued to benefit from 5G co-building and co-sharing. Two parties already saved over RMB86 billion of CAPEX. Meanwhile, the two parties continued to conduct 4G network co-sharing with the total number of co-shared 4G base stations reaching 460,000. This further enhanced the quality of network coverage and saved network operating costs and investment. Two parties already saved over RMB24 billion of CAPEX.
With a focus on the digital life in all scenes, and leveraging the strengths in cloud-network integration, the Company created the high-quality “Triple-Gigabit” ubiquitous connectivity services, comprising 5G+Fibre Broadband+WiFi6. It also established E-surfing Digital Life Technology Co., Ltd. (天翼數字生活科技有限公司) to build a Smart Family platform that aggregates different industry ecologies such as content, applications and smart home devices, and to develop integrated information services covering Smart Family, smart community and digital village. For the first three quarters of 2021, wireline and Smart Family service revenues of the Company amounted to RMB85,498 million, representing an increase of 4.7% year-on-year. The total number of wireline broadband subscribers reached approximately 168 million with a net increase of 9.11 million, while revenue from broadband access reached RMB56,896 million, representing a year-on-year growth of 6.8%. Broadband access ARPU reached RMB38.8, maintained the rebounce momentum over the same period of last year. Revenue from Smart Family increased by 30.3% year-on-year, driving the broadband blended ARPU to RMB46.1, representing an increase of 4.5% year-on-year.
The Company deeply integrated the essential elements of the digital economy with emerging information technologies and repackaged its fundamental capabilities with 5G, e-Surfing Cloud and security as the core to foster the vigorous market demand. 5G business model had been evolving continuously with a series of benchmark projects widely replicated. E-surfing Cloud Technology Limited Company (天翼雲科技有限公司) was set up officially and e-Surfing Cloud kept its industry leading position leveraging on its servicing capabilities of cloud polymorphism, including public cloud, private cloud, dedicated cloud and hybrid cloud, as well as its IDC resources, which are the greatest in number and widest in distribution in China. In the first three quarters of 2021, the Company’s Industrial Digitalisation service maintained rapid growth and recorded revenue of RMB74,090 million, representing an increase of 16.8% over the same period of last year, maintaining the industry-leading position in terms of revenue and market share.
Taking shareholders’ return into full consideration, alongside the Company’s profitability, cash flow level and capital needs for its future development, the Board of Directors has decided that the Company’s profit to be distributed in cash for the year 2021 shall be no less than 60% of the profit attributable to equity holders of the Company for that year. Within three years after A-share offering and listing, the profit to be distributed in cash for each year will gradually increase to 70% or above of the profit attributable to equity holders of the Company for that year. At the same time, an interim dividend will be declared and paid starting from year 2022. The Board of Directors has full confidence in the Company’s future development and believes that the Company will continue to create value for its shareholders by virtue of its good profitability and cash flow generation capability, as well as its effective capital expenditure control.
The Company continued to optimise investment structure to focus on new development drivers. CAPEX in 2020 was RMB84.8 billion. Of which, 5G CAPEX was RMB39.2 billion. CAPEX in 2021 is budgeted at RMB87.0 billion, a minor increase of 2.6% from 2020. Of which, 5G CAPEX budget is RMB39.7 billion.

In 2021, the Company’s investment focuses on 5G, yet with strong commitment to co-build and co-share, the CAPEX size is basically flat versus last year. Meanwhile, the Company proactively commenced 4G network co-building and co-sharing, in a bid to further enhance network coverage, save CAPEX and operating and maintenance expenses, hence 4G investment decreased significantly by 83.3%. The investment of the Company’s booming Industrial Digitalisation business increased by 67% yoy, with planned addition of 52 thousand IDC cabinets and 100 thousand cloud servers.
In the first half of 2021, the Company strengthened its unified deployment of cloud and Internet Data Centre (IDC) resources according to the “2+4+31+X+O” layout. The Company continued to deploy IDC on a large scale around core cities in the four most economically developed regions in China, namely Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macau, and Sichuan-Chongqing-Shaanxi. The number of data centres exceeded 700, while the number of cabinets serving external customers reached 430,000 units, above 80% of which were deployed in the four economically developed regions. The Company has the greatest number and widest distribution of IDC resources in China, with prominent data-oriented characteristic and significant efficiently-centralised edges. At the same time, leveraging its resources of 60,000 exchange buildings and integrated access offices, the Company built edge nodes to deploy its edge computing capabilities, while establishing its servicing capabilities of cloud polymorphism, including public cloud, private cloud, dedicated cloud and hybrid cloud. In this way, the Company formed an edge in providing integrated digital solutions based on cloud-edge collaboration to satisfy customers’ demands for low latency, data localisation, security, and differentiated services.

The Company continued its deployment of Gigabit fibre broadband in over 300 cities, as well as its deployment of overseas network nodes. It completed the construction of an all-fibre transmission ROADM network with the greatest capacity in the world, covering the entire country and key overseas regions. The Company also completed the construction of two premium networks, including the CN2-DCI network that connects all e-Surfing Cloud resource pools and key data centres as well as the OTN network for government and enterprise customers. Leveraging its edges in satellite communications network resources, the Company continued to integrate its mobile, fibre broadband and satellite networks to build a unified information network infrastructure covering land, sea, air and space. The Company achieved in-depth integration of cloud resource pools and network capabilities, with its end-to-end differentiated cloud-network servicing capabilities becoming increasingly significant.
The Company deepened its research and development (R&D) system reforms, innovated incentive mechanism and stimulated vitality for sci-tech innovation. Focusing on its technological development objectives, the Company increased its investment intensity in R&D, elevated the input and output efficiency of R&D resources. With building a sci-tech company as the objective, the Company pushed forward corporate development driven by sci-tech achievements. The Company innovated its R&D mechanism and promoted the chief technician as person in charge system, the “open competition” system as well as the “horse racing” mechanism for major R&D projects. The Company strengthened its own problem-tackling efforts for core technologies and reinforced its challenge-confronting efforts for core technologies in key areas such as cloud computing, AI, cloud-network integration, 5G, digitalisation as well as network and information security. In the first half of the year, the number of newly applied patents increased significantly. The Company’s proprietary distributive storage of e-Surfing Cloud obtained ISO27040 certification, making it the first cloud storage service provider in China to gain this certification. The Company’s proprietary database has the hyper-scale processing capabilities that can support the hosting of billions of users and tens of millions of concurrent services. e-Surfing Cloud CDN has provided content distribution service for a number of leading Internet companies. The Company conducted proprietary R&D of products such as MEC platform, UPF, 5G frequency-shifting MIMO, overcame roadblocks in key technologies such as cloud-edge collaboration and low-cost indoor coverage, which effectively reduced network construction and operation costs. The Company developed a proprietary online and offline omni-channel digitalised operation platform, with 95% of its offline businesses having been brought online. The Company continued to optimise the planning of its sci-tech innovation and collaborated with partners from the ecosystem to carry out research for key technologies as well as cooperative innovation among industry, academia, R&D institutes and customers, leading to in-depth cooperation in the fields such as cloud and cloud-network operating systems, future network, network and information security and business innovation.
The Company will continue to seize the new development stage, insist on the new development philosophy and establish the new development pattern. Capturing the current important period of strategic opportunities, the Company will strive to transform its model of development and growth to become a service-oriented, technology-oriented and secured enterprise. Taking A-share IPO as an opportunity, the Company will deepen its “Cloudification and Digital Transformation” strategy, expand its customer-oriented integrated intelligent information services, and pursue breakthroughs in key technologies and accumulation for the next generation technologies. The Company will also build core capabilities for sci-tech innovation, construct the green and low-carbon new information infrastructure featuring cloud-network integration and leverage its digitalised platform to empower the green development of numerous walks of life. The Company will introduce strategic investors with synergies to build the industry and capital ecologies with strong alliance and open cooperation. The Company will also carry out system and mechanism reforms to stimulate its corporate vitality and intrinsic motivation, reinforce the solid foundation of network and information security, and strive to build the cornerstone for the development of digital economy. The Company will also facilitate the construction of Cyberpower and Digital China, safeguard network and information security and promote rural revitalisation. The Company will create a better digital life for customers and share the results of its high-quality development with shareholders.

Last updated on 29 October 2021

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