China Telecom reported revenues for the first half of 2015 down 0.6 percent year-on-year to CNY 164.95 billion. Adjusted EBITDA rose 0.4 percent to CNY 50.74 billion, while net profit fell 4.0 percent to CNY 10.98 billion. Mobile service revenues were up 0.6 percent year-on-year to CNY 62.35 billion, following the launch of the 4G network, while fixed revenues fell 0.4 percent to CNY 84.68 billion.
China Telecom blamed the flat performance on the changes to local VAT rules and a government campaign to raise broadband speeds while lowering prices. Excluding the VAT impact, services revenues would have growth 4.7 percent year-on-year and net profit 11.3 percent, the company said. It will not pay an interim dividend after the results.
The operator reached 29 million 4G customers at the end of the period, while fixed broadband customers increased by 2.6 million in the period to 110 million. This included the net addition of 11 million FTTH customers, for a total 54 million. China Telecom said it's focusing on 'dual 100 Mbps' offers, including access to both its LTE-A network and fibre, bundled with TV services and applications.
Capital expenditure is expected to accelerate in the second half of the year on the continued 4G and FTTH build-out. The operator spent CNY 36.69 billion in the first half and forecast capex of CNY 107.80 billion over the full year, up from 76.89 billion in 2014. China Telecom said the LTE roll-out was progressing efficiently thanks to its cooperation on towers with the other operators. In total it expects to add 330,000 4G base stations this year, to reach a footprint of 510,000. The FTTH coverage will also expand by 53 million homes passed, to a total of around 180 million.
