China Telecom reported first-half revenues up 4.7 percent year-on-year to CNY 193 billion. Service revenue was up 7.0 percent to CNY 177.6 billion and would have risen 8.5 percent without the impact of new accounting rules, the company said.
EBITDA rose 6.5 percent to CNY 55.9 billion, giving a margin of 31.5 percent. Net profit increased 8.1 percent from a year ago to CNY 13.6 billion. Capital expenditure was reduced 19.9 percent to CNY 32.9 billion, leaving free cash flow up strongly to CNY 18.4 billion.
Despite the solid results, China Telecom said it would not pay an interim dividend, in order to maintain financial flexibility. Shareholder returns can be expected at the end of the financial year, the company said.
China Telecom said growth was supported by bigger and faster data and broadband plans for high-end users, new smartphone launches, and targeting the market for secondary broadband connections, such as hotels and institutions. The company also reported strong growth in service bundling, with the triple-play reaching 59 percent of broadband subscribers, up 13 percentage points over the same period last year. In addition, IoT services started to take off, with service revenue up nearly 90 percent and almost 30 million connected devices added in the period, to reach more than 74 million on the network.
Total mobile service revenues amounted to CNY 83.6 billion, up 10.3 percent and led by a 26.5 percent rise in mobile internet revenue. Net subscriber additions were more than double the year-earlier period, at 31.66 million in the six months, for a total base of 282 million at the end of June. China Telecom claims it took 46.5 percent of market net additions in the period, taking its total market share to 18.9 percent.
Wireline service revenues amounted to CNY 94.0 billion, up 4.2 percent year-on-year. Fixed broadband subscribers rose by 7.09 million in the six months to 141 million, and broadband ARPU was at CNY 52.5. Over half (56%) of broadband subscribers took at least 100 Mbps service, an increase of 19 percentage points over the same period last year. China Telecom said it had largely completed the FTTH roll-out in cities and towns in its footprint, and gigabit service was available in over 170 cities.
