China Telecom revealed its Q1 profit increased 10% to 4.69 billion yuan ($760.7 million), as strong mobile service and handset revenue growth compensated for rising costs.
The last of China's three network operators to report its quarterly results fell in between China Unicom's 89% profit growth and the mere 0.3% recorded by China Mobile.
China Telecom's revenue increased 14.6% year-on-year to 77.82 billion yuan, the results show. Excluding terminal sales, revenue was up 10.1% to 68.58 billion yuan.
Total revenue from handset and other terminal sales grew 63.7% to 9.23 billion yuan, likely due to the country's flourishing smartphone market.
But the higher value of terminals sold led to an increase in operating expenses of 41.4%, and selling and general expenses grew 28.7% on increased marketing costs.
The operator's mobile subscriber base grew by 7.4 million to 168 million. Around 78.1 million of these were higher-value 3G customers, up from 69 million in the previous quarter.
China Telecom also added 3 million wireline broadband subscribers to 93.2 million, but the number of local access lines decreased by 1.3 million in the face of China's mobile internet boom.