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Mobile data driving growth for China’s third-biggest operator

The number three operator in China has reported a significant boost in 3G adoption across the first half of 2011. China Telecom, which is the largest CDMA operator in the world, posted profits of CNY9.81 billion (US$1.53 billion) for January - June 2011, a year-on-year increase of 8.1%. Revenue rose 11.5%, reaching CNY120.21 billion, with over a quarter of this (CNY31.14 billion) generated from mobile services.

The operator’s rising subscriber number showed increased uptake of 3G services, with 21.54 million of its 108.37 million customers having a 3G handset. This represents a 75.3% increase, bringing the operator’s total percentage of 3G subscribers to just below 20% - at the end of June last year, this figure was 7.2%.

China Telecom attributes its success in attracting new subscribers to being a “pioneer in launching sub-CNY1,000 (US$157) 3G smartphones, with industry-leading sales volumes.” Its product portfolio encompasses around 400 devices, 100 of which are smartphones. Across the first half of 2011, there was a 12% compound growth rate in data accessed via 3G-capable devices.

Mobile internet use has been a major factor in the operator’s growth, allowing the firm to offset falling fixed voice revenues and increase its market share by 2.5% within a year. China Telecom chairman Wang Xiaochu stated: “the intensified market competition and the industry convergence in the mobile internet era are bringing new challenges.”

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