31 Dec 2005
On 19 December 2005 China Telecom held its annual work conference in Beijing to conclude its operations in 2005 and plan its work for 2006. In 2006, China Telecom will change and innovate its mode of growth and development with reference to scientific development and the overall goals of strategic transformation. It will strengthen development of integrated information services, and improve the quality and effectiveness of its business growth, with a view to achieving sustainable healthy development of the company.
Vice Minister of the Ministry of Information Industry Mr. Xi Guohua was the keynote speaker at the work conference. He highlighted the developments of China's telecom industry during the Chinese government's "Tenth Five-Year Plan" period and affirmed China Telecom's achievements during the period. He said the emergence of new technologies and the diversion of telecommunication traffic to mobile communications have posed serious challenges to the development of the wireline operators. To overcome these challenges, China Telecom has acted decisively and was the first major telecom operator to effect strategic transformation and reported preliminary success. Mr. Xi hoped that in the new year China Telecom would continue to realize scientific development and push actively for strategic transformation, step up technology and business innovation, advocate healthy competition as well as collective efforts in upholding market order, speed up the development of services in rural areas and enhance the quality of services.
In his work report delivered at the conference, Chairman and CEO of China Telecom Mr. Wang Xiaochu pointed out that, in 2005, China Telecom had endeavoured to realize scientific development. Facing intensive market competition and the surfacing of replacement technologies, China Telecom has remained steadfast to its strategic transformation and made strides in achieving its near term development goals. In 2005, the enterprises at all level within China Telecom has pushed to transform their operations and services as the basis for implementing strategic transformation of the entire corporation. Besides striving to maintain effective growth for the traditional wireline business, they also actively developed new businesses and integrated information services business in order to achieve all budget targets. Compared with last year, the proportion of income contribution from non-voice services had grown notably and value-added services became a key driver for overall revenue growth of China Telecom, bearing witness to the preliminary success of the company's strategic transformation. Steady progress in strategic transformation has clearly allowed the company to better respond to market changes. Improving internal management has led to significant rise in overall operational efficiency. Enhanced branding and services have further bolstered the company's corporate image. Conscientious efforts were devoted into maintaining market order and promoting operators' interconnection. China Telecom has also been actively pursuing rural communications projects, installing wireline services over 15,000 administrative villages in 2005. It was the first telecom operator to surpass the target set by the Ministry of Information Industry for rural communications projects. In 2005, the reputable international finance magazine EUROMONEY named China Telecom as "The Best Managed Telecommunications Company in China". After a full year of practice, China Telecom has deeply realized that under the present circumstances and conditions, effecting strategic transformation is the way to maintain its vigor, thus it will push ahead unwaveringly.
2006 is an important year to the company for implementing comprehensive strategic transformation. China Telecom will fully implement scientific development, think proactively while firmly grounded in the present, hold steadfast to its overall goal of strategic transformation, transform its mode of growth, adopt an innovative mindset, develop effectively the traditional wireline business and strengthen the integrated information services development, in order to steadily enhance the enterprise value. China Telecom will strengthen precision management and optimize resources allocation, and effectively organize and control logistics, capital and information flows, which will allow it to reduce operational costs, enhance management and resources efficiencies, and consolidate its foundation for future development.
Chairman Wang pointed out that China Telecom had to focus on improving its capability of innovation. It has to change the simple "cultivate in Spring and harvest in Autumn" growth mode and create for itself its own unique edges through developing new business models and the organic integration of technologies, business and network. China Telecom will also speed up the development of integrated information services to ensure the company is able to respond to market competition with more flexibility. In 2006, the company has to develop two markets and speed up the development of three major businesses. The first is to develop the rural market. The company will strive to develop the rural market effectively and will provide information services critical to the development of the rural economy and society. Meanwhile, the company will continue to enrich the scope of its information services to bring to urgently needed agri-production and livelihood information to the rural population, to help them achieving affluence and prosperity. The second market to focus on is the overseas market. To complement the nation's "Investing Overseas" strategy and boost the company's profile, China Telecom will provide comprehensive information service solutions to Chinese companies and businessmen that have ventured overseas. Proactively developing broadband business is the third goal of the company in 2006. Based on knowledge of its customers, China Telecom will divide the market into segments. Besides, the company will optimize its broadband network and enhance service quality. Leveraging robust economic development and promotion of informatization in China, the company will actively diversify and simplify broadband access terminals, enriching and personalizing broadband contents. The fourth focus is the promotion of the voice information enquiry service. Currently, there are about 750 million telephone users in China but only about 60 million personal computers. There is a tremendous demand for information services among the public and launching voice information enquiry service would help to satisfy this demand. We see the enhancement of the informatization is not only essential to the company's development but also part of our corporate social responsibility. The voice information enquiry service aims to address the needs of everyday life of the public, promising "convenience and ease" to their living. The goal is to deliver information that the public need, and instill in consumers' mind that "nothing in the world is difficult and you could always count on the voice information enquiry service". Our fifth key pursuit is the business navigation service (Information, Communication & Technology services). With China having a large number of small and medium enterprises, and to capture the opportunity of the country's informatization, China Telecom has a favourable window for promoting its business navigation services to help SME on its informatization. We will use the business navigation service as a vehicle to launch services customized for various SMEs. The service will facilitate the application of information and network technologies by SMEs, allowing them to improve management, lower costs, raise competitiveness and enhance value.
To fulfill the missions for 2006, Chairman Wang emphasized that in the new year, China Telecom has to correctly analyse and grasp market situations, and be more sensitive to possible risks and the urgency of the company's development. To grasp the favorable opportunities bred by China's economic development, the company must continue to overcome difficulties, adopt effective measures and drive strategic transformation to speed up company development. It must persist with coordinating all its tasks with scientific development as its beacon in its bid to raise quality and efficiency. China Telecom will proactively push strategic transformation, enforce precision management and continuously optimize resources allocation. Capitalizing on development of the global information industry and China's focus on informatization, the company will strive to grow its value and shift from a capital investment driven growth mode into one based on economies of scale. Through studying the market scientifically, the company can identify or innovate services in the complex market fully leveraging its resource related edges to enhance value to its customers. Such differentiated businesses and services would be crucial to the company in gaining its market. The company will seek to strengthen the concept of collaboration and shared success, pushing for steady growth of the company as well as the development of a harmonious society. By adhering to the principle of healthy competition and cooperation, embarking on rational competitive pursuits while helping to maintain market order, China Telecom will work with its peers to enhance the overall telecom market. The company will find ways to create value and benefits for all, and, in the process of driving strategic transformation, continuously extend the industry value chain and derive value from the extended chain. China Telecom pledges to fashion a healthy industry value chain that can foster prosperity, win-win, at both its upper and lower reaches. This healthy, interactive industry value chain will provide both the setting and assurance for successful strategic transformation to the company. China Telecom will cultivate and develop its business according to customer demands and grow together with its customers. It will also seek to understand and implement precision management to constantly upgrade its management and operational efficiency. With quantitative management as the core, information management as the base, and informatization support as the means, China Telecom will further enhance its precision management in all production and operation processes and at all management levels. The company needs to properly address the relationship between strategic transformation and the tasks at hand. It will effectively prevent and manage possible risks arising from transformation to ensure its success. The company will strengthen its corporate culture with due emphasis on maximizing customer value and convenience. It will also advocate an innovative working attitude among management and staff.