China Telecom 2018 Annual Work Conference Highlights

24 Jan 2018

On 24 December 2017, China Telecom held its 2018 annual work conference in Beijing. The conference summed up the work of 2017, analyzed the current situation and planned for mission in 2018.

Mr. Chen Zhaoxiong, Vice Minister of Ministry of Industry and Information Technology (MIIT), and Mr. Guo Yimin, Chairman of Supervisory Committee for Key Large-Sized State-Owned Enterprises, attended the conference and made pronouncements. Mr. Yang Jie, Chairman and Chief Executive Officer of China Telecom, introduced the strategic plan, and Mr. Liu Aili, President and Chief Operating Officer of China Telecom, presented the work report.

Mr. Chen introduced the industry development and MIIT's work in information and communications in 2017. Mr. Chen also conveyed the basic ideas of MIIT's work in information and communications in 2018, and strongly recognized China Telecom for its reform and development in 2017: First, the Company accelerated the construction of network infrastructure; second, fully accomplished the missions of Speed Upgrade and Tariff Reduction and telecommunications assurance; third, maintained a healthy and stable development momentum; fourth, enhanced operation, management and service levels, and made significant contribution to the innovation of the industry. Mr. Chen expressed expectation on China Telecom to keep heightening the corporate development levels, to boost corporate development vitality, to push forward network upgrade continuously and to solidify development foundation; to speed up development of convergence and to serve the digital economy; to vigorously innovate service mode and improve people's sense of gain; to enhance capability of safety assurance and maintain network security; to keep opening up new phases of development for the Company and make new and more contributions for the accelerated establishment of Cyberpower.

The conference stated that in 2017, China Telecom's strategic transformation achieved prominent results with benefits from reform being reaped. In summary, China Telecom attained achievement in the following areas:

Solid progress made in step-up transformation. Firstly, meaningful scale of service ecospheres formed. The mutual integration and promotion of the five ecospheres achieved remarkable results, making China Telecom the world's largest operator of FDD 4G, fibre broadband, IPTV and fixed-line telephony. Intelligent Connection Service Ecosphere expanded rapidly, while Smart Family Ecosphere established a solid foundation. New ICT Application Ecosphere showed good momentum, Internet of Things (IoT) Ecosphere began to take shape, and development of Internet Finance Ecosphere accelerated. Secondly, construction of superior networks basically completed. The Company completed the construction of the biggest Fibre-to-the-Home (FTTH) network in the world and the first FDD 4G full-coverage network in the PRC, the world's first full-coverage new generation IoT (NB-IoT) network, and basically completed the construction of cloud infrastructure that unified across the entire network. Thirdly, operation capability effectively enhanced. Construction of Big Data platform on corporate level achieved new progress, end-to-end operation of key businesses showed preliminary results, channel efficiency showed material improvement, customer service capabilities enhanced steadily, capabilities of talents teams also kept strengthening.

Reform and innovation stimulated corporate vitality. After five years of exploration and implementation, China Telecom formed its own characterized reform model featuring the three-dimensional inter-driven forces comprising "sub-division of performance evaluation units", "professional operation" and "top-down service support system", which effectively solved the issue of passion, capability and easiness of doing of contracted employees and teams. Employees' sense of gain, cohesion and solidarity kept improving. Promotion of sub-dividing performance evaluation units deepened, while professional operation system began to take shape, top-down service support system continued to improve towards perfection, and technological innovation made new headways.

The responsibility as a Central Enterprise effectively fulfilled. Prominent result of Speed Upgrade and Tariff Reduction was delivered. From 2012 till now, average wireline broadband access bandwidth increased from less than 6Mbps to over 68Mbps, while unit bandwidth price dropped by 95%; mobile broadband fully migrated towards 4G while handset data unit price dropped by 81%. The Company ceased charging mobile domestic long distance and roaming fees since 1 September 2017. Communications safety and smoothness continued to increase. Important communications assurance missions for the Party's 19th Session of National Congress, the 2017 BRICS Summit, the Belt and Road Forum for International Cooperation were fully completed, as well as during disaster relief or emergencies. Precision poverty alleviation programs were launched with interim mission on specific targets completed; the Company also leveraged its network and information advantage to assist precision poverty alleviation. Quality and efficiency enhancement saw new development. Dedicated projects organized by the State-owned Assets Supervision and Administration Commission (SASAC), such as reduction of legal entities, and corporatization reform of state-owned enterprises made stable progress.

The conference came to view that, considering the changes in regulatory, economic and industrial environment that the Company is currently facing, three prominent traits could be seen: firstly, the acceleration of upgrade, including economic upgrade, technological upgrade, and demand upgrade; secondly, acceleration of convergence, which is reflected by the fact that converged development is becoming the new path for the step-up transformation of national economy, the accelerated convergence between information technology and real economy, leading to the rapid development of digital economy; the value chain evolves in accelerated pace towards ecosphere with cross-sector convergence and mutual integration, while ecosphere organization moves faster towards the newly innovated, closely-synergic entity; thirdly, the acceleration of transformation, which is reflected by the change of industry development model driven by transformation and innovation; remarkable opportunities induced by quality transformation; full-fledged and precision efficiency enhancement prompted by efficiency transformation; and transformation of old impetuses of human, technology and innovation into new impetuses expedited by impetus transformation.

The conference emphasized that the interim missions to be accomplished are: accelerate the development of network intelligentization, service ecologicalization and operation intellectualization; undertake the Three Missions of "enhance information infrastructure; deepen the development of the Four Areas of Convergence; uplift the productivity of all essential factors", so as to achieve the Three Goals of "Establishing Cyberpower, forging a first-class enterprise, building better lives together".

The conference set operational goals in 2018 and required the following tasks to be carried out to: create integrated network edge and strengthen the foundation of Cyberpower; to create convergence service edge to attain a proper market position; to create support and enablement edge and continue to reinforce intellectual operation; to promote the Three Transformations (i.e. quality transformation, efficiency transformation and impetus transformation) with enhanced level of development in all-round; to implement the State's requirements and earnestly perform duties as a Central Enterprise.