China Telecom, China's biggest phone company, said its first-half earnings fell amid slow growth in its fixed-line service, though revenues rose on strong performance by its newer Internet businesses.
Net earnings were 14.1 billion yuan ($1.8 billion), down 4.2% from the same period last year, the Beijing-based company said. It said total revenues rose 3.5% to 86.9 billion yuan ($10.9 billion).
The total number of fixed-lined subscribers rose by 4% to 219 million, with local phone revenues falling 2.5% to 39.8 billion yuan ($5 billion), the company said.
At the same time, the number of broadband customers soared 20% to 25.3 million, pushing up broadband revenues 34.7 % to 10.8 billion yuan ($1.4 billion), it said.
The results reflected efforts by China's phone companies to promote broadband access, Internet-based cable TV and other new services to drive growth as potential voice customers opt for mobile carriers.
'Broadband access and VAS (value-added services) have become more important in driving the overall revenue growth of the company,' Wang Xiaochu, the chairman and CEO, said in a statement.
Wang said the rising revenues from China Telecom 's focus on new services 'abated the serious challenge and the decline in traditional voice services.'
China has the world's biggest telecoms market, with 798 million phone users, including 431 million mobile phone customers as of the end of July, according to the government.
Excluding upfront connection fees, net profits were up 2.6 % to 11.6 billion yuan ($1.5 billion).