China Telecom, the country’s third largest mobile operator, posted stable profit and revenue growth for the first three quarters of 2017 despite hikes in network-related spending and marketing expenses to expand its 4G subscriber base.
The company’s net profit for the nine month period rose 5.5 per cent to CNY18.5 billion ($2.8 billion), with total revenue rising 4.1 per cent to CNY274.7 billion. EBITDA increased 3.7 per cent to CNY78.8 billion over the same period of 2016.
Service turnover was up 7 per cent to CNY249.7 billion.
It added 60 million LTE subscribers year-on-year to take its total to 167.5 million at end-September. The number of mobile subscribers rose by 28 million from a year ago to 241 million. Almost 70 per cent of its mobile users are now on 4G plans.
The profit gains came despite a mandated cut in domestic long-distance and roaming fees from 1 September, along with a nearly 10 per cent year-on-year increase in network operations and support expenses following its network expansion and an increase in the number of leased tower assets and related expenses.
In a statement, China Telecom chairman Yang Jie said the company is “facing intensified market competition coupled with complicated and changing industry environments”, adding: “the group consolidated competitive strengths and deepened data traffic operation resulted in acceleration of scale development of the mobile business.”
Marketing expenses to drive subscriber growth increased by 7.4 per cent.
The company said ARPU increased steadily over the same period of 2016, but didn’t provide a profit figure.
Comparison
Rival China Mobile reported a net profit of CNY92.1 billion for the nine month period, up 4.6 per cent over the comparable period of 2016. Revenue of CNY569.5 billion rose 4.9 per cent and service revenue grew 7.1 per cent to CNY515.3 billion.
China Unicom’s preliminary results forecast a net profit of CNY4.1 billion on service revenue of CNY187.9 billion, up 4.1 per cent year-on-year. Mobile service turnover is expected to increase 6.7 per cent to CNY117 billion
