China Telecom reported net profit for 2015 up 13.4 percent to CNY 20.05 billion. The result was helped by a one-time gain of CNY 3.94 billion from the transfer of towers and other infrastructure to a new joint venture with China's other two mobile operators. Revenues rose 2.1 percent to CNY 331.20 billion, while EBITDA fell 0.8 percent to CNY 94.11 billion, hurt by a number of regulatory changes and higher costs. Revenue growth was led by the mobile market, where service revenue was up 3.5 percent to CNY 124.50 billion. Fixed service revenue increased 1.0 percent to CNY 168.76 billion. China Telecom maintained its dividend at HKD 0.095 per share.
China Telecom attributed the growth to the launch of 4G services. It finished the year with 58.46 million 4G customers, or more than a quarter of its total mobile base of nearly 200 million customers. Mobile data traffic doubled last year, with 4G already contributing 51 percent. Monthly average data traffic per 4G user reached 751 MB, an increase of 25 percent over 2014. By January-February this year, 4G customers averaged 850 MB per month.
The company also saw strong growth in FTTH subscribers, with net additions of 28.38 million for a total 70.99 million. The total number of wireline broadband subscribers reached 113 million, of which 63 percent were on fibre. China Telecom also added over 9 million IPTV subscribers last year, to reach a total of 40 million.
Looking ahead, China Telecom said it expects a reduced impact from the VAT reform in China this year, as the changes are introduced across the country from May. This will it allow more VAT credits for operating costs and investments, reducing the average monthly impact on net profit to an estimated CNY 360 million from CNY 540 million last year.
The company expects capex to fall to around CNY 97 billion this year from CNY 109 billion in 2015, with still nearly half of spending going to 4G. Around 290,000 more 4G base stations will be added, bringing the total to around 800,000, as it expands coverage in towns and rural areas. 4G+ will also be launched in all cities, and China Telecom plans to start testing 800 MHz band spectrum and prepare for the launch of VoLTE in 2017. In addition, the FTTH network will be expanded by another 50 million homes passed, to a total 270 million.
