China Telecom Annual Work Conference Highlights

05 Jan 2009

On 17 December 2008, China Telecom held its annual work conference for the year of 2009 in Beijing. During the conference, Mr. Wang Xiaochu, Chairman and CEO of China Telecom, reviewed the company's operations in 2008 in which the company persisted in scientific development, deepened corporate transformation and started a new phase of full service operation. Chairman Wang also advocated China Telecom's core mission of full service operation development in the next three years and highlighted the goals for 2009.

In 2008, China Telecom withstood unprecedented challenges due to unexpected natural disasters including severe snowstorms and earthquakes. Despite facing harsh challenges, China Telecom has responsibly fulfilled its duties to maintain communications services, receiving a high degree of recognition from governments of various levels, community and customers. China Telecom has actively implemented restructuring acquisition and prepared for mobile operation, laying a solid foundation for its future full service operations. It has basically achieved its production and operation targets while maintaining a steady and healthy development of the company. Mr. Xi Guohua, Vice Minister of the Ministry of Industry and Information Technology, who was invited to attend the conference, expressed his high regard on the company's contribution in the above connection. After analyzing the current situation and the development characteristics of the telecommunications industry, Mr. Xi introduced the working initiatives of the Ministry of Industry and Information Technology.

Chairman Wang pointed out that the main tasks of China Telecom's full service operations in the next three years will be: to further promote the customer-focused innovative informatization strategies; to comprehensively implement differentiated mobile development strategies, targeting mid-to-high end markets; to provide integrated information services from a broader perspective to customers through full service convergence offering to realize profitable scale development; to robustly expand mobile business, broadband business and integrated information services while stabilizing fixed-line business to drive revenue and profit growth.

In 2009, China Telecom will implement scientific development in full scale and enforce the customer-focused innovative informatization strategies, persisting in transformation-driven, branding-oriented convergence offering development. China Telecom will also strengthen its precision management and optimize its resource allocation to attain various objectives, paving the way for the successful start-up of full service operations and sustainable development.

- With adequate preparation and timely launch of the brand, "E-surfing", China Telecom will lay a foundation for expanding its mobile business. The company will well position as a mobile Internet service provider through its brand, "E-surfing", and target mid-to-high end markets, while leveraging its fixed-line and Internet network and utilizing the strengths of CDMA technology. It will promptly launch its differentiated convergence services focusing on customer's informatization demand. In addition, to build a mobile network with differentiated edges, China Telecom will speed up its network construction in the key regions and areas for its key customer segments.

- China Telecom will continue to expand its customer base of various segments by integrated operations and differentiated development. The company will adhere to integrated operations to attain continuous expansion of government and enterprise customer segment. Focusing on key sector markets, China Telecom will use its core integrated products, applications and solutions on its three application versions of BizNavigator to realize scale development. For the high-end cluster market, the company will deepen the informatization application development project; for SMEs and other general cluster market customers, the company will speed up the scale promotion of two application versions of BizNavigator. In addition, China Telecom will promote differentiated products and services to actively expand household customer segment, promptly launch package deals that cater to their needs, and enrich the service content of OneHome series. In addition to consolidating the existing CDMA subscribers, the company will actively enlarge its individual customer base, strengthen the convergence of PC and mobile Internet, and drive the development of basic businesses like voice leveraging mobile Internet access.

- Through continuous reform and dedicated innovation, China Telecom will establish a customer-focused full service operating system. Focusing on customer's demand and experience, the company will enhance co-ordination of its various distribution channels and their marketing capabilities for integrated products. It will carry out comprehensive promotion of vertically unified marketing system to strengthen the marketing synergies for government and enterprise customers. For household customers, the company will enhance the electronic channels promotion, increase the servicing capabilities of its sales outlets and progressively open up agency sales channels. For individual customers, it will progressively establish account servicing team for VIP clients, actively develop community channels and promptly develop recharge-over-the-air channel. At the same time, China Telecom will create differentiated convergence offering servicing capability by accelerating service transformation, enhance customer-focused network capability by propelling the evolution of integration, and build an integrated information services network by promoting network transformation.

- China Telecom will strengthen its precision management and enhance risk management to improve its operating efficiency and profitability. The company will endeavor to optimize comprehensive budget management, and strengthen multi-dimensional customer-oriented budget management. It will also explore a new financial management system for full service operations. Besides, China Telecom will strengthen centralized fund management and operation, enhance accounts receivable management and optimize cost structure. It will also deepen investment control and procurement management, adjusting the investment composition and priorities to ensure developments of mobile, broadband and transformation businesses.