(Associated Press via NewsEdge) China Telecom, China's biggest phone company, said its 2006 profits fell 2.7% amid slow growth for its core fixed-line business but total revenues rose on strong demand for Internet and other new services.
Net profit was 27.1 billion yuan ($3.5 billion), the Beijing-based company said. It said revenue from Internet services rose 32% while local phone revenues fell 3.5%. Total revenues grew 3.4 % to 175 billion yuan ($22.6 billion).
China Telecom, which is traded on the Hong Kong stock market, did not release quarterly results.
China's fixed-line phone carriers are expanding broadband, Internet-based TV and other new services to make up for slowing growth as more potential customers opt for mobile phones.
Those initiatives 'have not only abated the challenges on our traditional business operations, but also led to sustained growth in our overall revenue and profit,' Wang Xiaochu, the chairman and CEO, said in a statement.
By contrast, China Mobile, the country's biggest mobile carrier, said last week its 2006 profits rose 23%.
China has the world's biggest telecoms market, with 461 million mobile phones and 368 million fixed-line phones as of January, according to the government. It says the number of mobile phones is expected to grow by 60 million this year, while fixed-line phones will rise by 10 million.
China Telecom's results were hurt by lower connection fees. The company stopped charging for phone-line installation in 2001 but has been booking deferred income, with the amount falling each year.
Excluding connection fees, net profit rose 4.9 % to 22.2 billion yuan ($2.9 billion), the company said.
The number of residential and business fixed-line subscribers rose 6.2% to 223 million, while the number of broadband Internet customers soared 34.7% to 28.3 million, the company said.
© 2007 The Associated Press
© 2007 Dialog, a Thomson business. All rights reserved