China Telecom reported operating revenues of CNY 352.3 billion in 2016, which represents an increase of 6.4 percent from 2015. Service revenues amounted to CNY 309.6 billion, up 5.6 percent year-on-year. EBITDA rose 1.1 percent to CNY 95.1 billion, and the EBITDA margin stood at 30.7 percent in 2016. Adjusted net profit rose to CNY 18 billion, up 11.7 percent after excluding the one-off gain from the disposal of tower assets in 2015.
China Telecom added 17.10 million mobile subscribers in 2016, reaching a total of 215 million customers at 31 December. The total number of 4G users doubled and reached 122 million, giving a penetration rate of 57 percent. Mobile ARPU rose to CNY 55.5 from CNY 54.1 in 2015, while 4G ARPU was down to CNY 72.8 from CNY 78.0.
Handset data traffic for the year jumped 130 percent, and 4G grew to 83 percent of handset data traffic from 51 percent in 2015. This helped mobile service revenues increase by 11 percent from 2015 to CNY 137.6 billion, as mobile handset internet access revenues rose 43 percent in the period.
The net increase of wireline broadband subscribers for the year was 10.06 million, reaching a total of 123 million at 31 December 2016. The total number of FTTH subscribers was 106 million at end-December 2016, representing a net increase of 35 million, with a penetration rate of 86 percent. China Telecom’s wireline broadband access revenues for the year rose 3 percent.
China Telecom’s free cash flow was still negative in 2016, but much less than the previous year, at CNY 7.7 billion versus CNY 21.5 billion in 2015. Nevertheless, the board recommended an increase in the dividend, to HKD 0.105 per share for 2016 from HKD 0.095 the previous year.
Capital expenditure grew 11.3 percent year-on-year to CNY 96.8 billion in 2016. With 4G coverage now at 95 percent of the population, the company expects investment spending to fall in 2017 to around CNY 89 billion. This will include the addition of around 270,000 more 4G base stations, for a total 1.17 million at year-end, further expansion of the FTTx network, and the roll-out of LTE-800 and NB-IoT to support new enterprise services.
