China Telecom Annual Work Conference Highlights

03 Jan 2007

On 19 December 2006 China Telecom held its annual work conference in Beijing to review its operations in 2006 and plan its work for 2007. In 2007, China Telecom will strive to fully realize scientific development, enhance brand management, further innovate its mode of development, continuously improve its structure and mechanisms, and strengthen execution capability. With increasing momentum to accomplish strategic transformation at a broader and deeper level, it strives to boost value for both the customers and the company.

Vice Minister of the Ministry of Information Industry Mr. Xi Guohua was invited to attend the conference. In his speech, he utterly recognized the significant contribution China Telecom had made to the country's economy and social informatization. He also expressed his wish that in the coming year China Telecom would remain steadfast to the country's strategy of establishing a socialist harmonious society. It should seize the opportunity provided by the ongoing industry development to prompt its strategic transformation and optimize its business model. By enriching the content of its service and offering, China Telecom could better cater to differentiated, personalized and diversified customer needs of integrated information service while achieving business development. This would support the country's economic and social development and consolidate the foundation for informatization, further contributing to the development of the information industry in China.

In his work report delivered at the conference, Chairman and CEO of China Telecom Mr. Wang Xiaochu pointed out that in 2006 the subsidiaries at all levels within China Telecom had actively advanced strategic transformation. While striving to maintain the fundamental of traditional business, they have pursued an innovative mode of development to augment the quality and efficiency of the company's business growth. In addition to vigorously defending the traditional voice business, the company has built a platform for integrated information service with a view to achieving steady growth of the overall revenue. China Telecom has basically completed the reformation of fixed-line network into intelligent network in order to unearth innovation potential for fixed-line business. The overseas service expansion strategy has been implemented progressively and its international business has attained positive results.

Chairman Wang said that in 2007 the telecom industry in China would, on the one hand, look forward to various opportunities for further development, but on the other, have to face big challenges in response to the evolution of technology and business. Therefore, all staff must have good understanding of market circumstances and proper positioning. To keep innovating the company's mode of development, they have to upgrade their service standard by equipping themselves with better knowledge of products and customer values. Exploring development potential of traditional businesses and fostering development of integrated information service allow the company to accelerate its metamorphosis into an integrated information service provider, and paves the way for its near term goals of strategic transformation.

Chairman Wang also called attention to the development plan "1-2-3" to be carried out by China Telecom in 2007. "One" is to stabilize traditional business, promoting the convergence service of PHS and fixed-line to enhance preservation of customers and traffic. "Two" is to further strengthen services effectively for both rural market leveraging informatization showcase projects and overseas customers market. "Three" is to speed up the development of three major transformational businesses including broadband access and application services, ICT (information, communication & technology services), and Best Tone (voice search engine). It will capitalize on effective market segmentation and promote IT applications together with outsourcing service, backup service and safety service etc. for various sectors like e-Government, with a view to enhancing scale development of ICT business. It will also make use of precision management to operate Internet and VAS business, and promote the convergence of various VAS platforms, technologies, application services and terminals. While promoting Best Tone services including personal communication assistant, enterprise communication assistant and family communication assistant, it also aims to offer several key products nationwide.

In respect of operation and internal support, China Telecom will vigorously implement brand management to foster the two customer-specific brands - "Biz Navigator" and "One Home." Through re-ordering and packaging, it will gradually establish three to four customer-specific brands, covering different kinds of customers. China Telecom will further enhance three major support systems of structure & mechanism, HR and IT. It will develop customer-oriented distribution system, implement nationwide business management mechanism, operation system and business model with a view to realizing integrated network synergy and scale benefits.

Chairman Wang emphasized that China Telecom has to react in accordance with customer needs and improve its capability of innovation in technology, business and management. Increasing the quality of integrated information service is indispensable to enhancing both enterprise value and customer value simultaneously. It will proactively lay a solid foundation for its future comprehensive services convergence offering. It will also strengthen cohesion along value chain and collective efforts with investors, business partners and competitors, through which all parties are able to dedicate their exertion to creating a harmonious and healthy ecosystem for sustaining the growth of the country's information industry while enhancing its enterprise value.