Chairman and CEO: Mr Wang Xiaochu
|China Telecom Corporation Limited is the world's largest wireline telecommunications and broadband services provider and the world's largest CDMA mobile operator. Serving as a full services integrated information service operator, China Telecom provides basic telecommunications services, such as wireline telecommunications services and mobile telecommunications services, and value-added telecommunications services, such as Internet access services and information services in the PRC. As of the end of March 2011, the Company has wireline access lines in service of about 173 million, wireline broadband subscribers of over 66 million and mobile subscribers of more than 100 million. The Company's H shares and American Depositary Shares ("ADSs") are listed on The Stock Exchange of Hong Kong Limited and the New York Stock Exchange, respectively. |
FOR FINANCIAL INFO: http://www.chinatelecom-h.com/eng/ir/reports.php?cat=2010
|Website ||http://www.chinatelecom-h.com/ |
|Industry* ||Fixed Line Telecommunications |
|Issue Type ||ADS Common |
|Country of Origin ||China |
|Listing date ||14 Nov 2002 (IPO) (ADR) |
| || |
|Local Wireline Access Lines in Service (Million) ||181.07 ||178.28 ||175.05 ||173.36 ||172.22 |
|including: Household ||111.14 ||111.39 ||110.20 ||109.60 ||109.14 |
|Government & Enterprise ||33.56 ||33.27 ||33.97 ||34.66 ||35.44 |
|Public Telephone ||14.81 ||14.64 ||14.46 ||14.37 ||14.24 |
|Wireless Local Access ||21.56 ||18.98 ||16.42 ||14.73 ||13.40 |
|Net Increase / (Decrease) of Wireline Local Access Lines in Service (Million) ||(3.16) ||(2.79) ||(3.23) ||(1.69) ||(1.14) |
|Wireline Broadband Subscribers (Million) ||58.33 ||61.07 ||63.48 ||66.85 ||70.09 |
|Net Add of Wireline Broadband Subscribers (Million) ||2.49 ||2.74 ||2.41 ||3.37 ||3.24 |
|"One Home" Subscribers (Million) ||43.86 ||46.25 ||48.45 ||49.67 ||51.51 |
|Wireline Local Voice Usage (Billion Pulses) ||64.17 ||64.42 ||58.23 ||52.37 ||53.15 |
|Wireline Domestic Long Distance Usage |
|18.50 ||17.22 ||14.98 ||13.40 ||14.19 |
|Wireline International (including Hong Kong, Macau and Taiwan) Long Distance Usage (Billion Minutes) ||0.30 ||0.31 ||0.31 ||0.29 ||0.29 |
|Mobile Subscribers (Million) ||74.52 ||82.98 ||90.52 ||100.25 ||108.37 |
|Net Add of Mobile Subscribers (Million) ||9.07 ||8.46 ||7.54 ||9.73 ||8.12 |
|3G Subscribers (Million) ||7.18 ||9.15 ||12.29 ||16.37 ||21.54 |
|Mobile Color Ring Tone Subscribers (Million) ||41.48 ||47.74 ||54.15 ||60.05 ||64.90 |
|Mobile Voice Usage (Billion Minutes) ||71.69 ||79.28 ||86.97 ||87.58 ||100.89 |
|Operating Revenue (RMB Million) ||54,973 ||55,725 ||56,322 ||58,720 ||61,488 |
|Excluding Upfront Connection Fees: || || || || || |
|Operating Revenue (RMB Million) ||54,840 ||55,610 ||56,205 ||58,674 ||61,436 |
|EBITDA (RMB Million) Δ ||22,963 ||22,483 ||20,253 ||23,761 ||24,740 |
|Profit attributable to Equity Holders of the |
Company (RMB Million)
|4,539 ||3,782 ||2,669 ||4,618 ||5,092 |
| || || || || || |
Δ EBITDA was calculated before CDMA Network Capacity Leasing Fees to enhance comparability.
* All future dates are indicative only and may be subject to change.
Note: The above calendar does not include management's participation in the conferences held by various investment banks during the year.
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In 2010, we deepened our efforts in strategic transformation and business innovation, adhering to integrated and differentiated development. The scale of mobile services achieved rapid expansion with an increasingly mature industry value chain. The broadband and integrated information services continued to maintain rapid growth, facilitating persistent optimisation of the revenue structure and primarily accomplishing coordinated development of four pillar services, namely, mobile, broadband, value-added and integrated information, and wireline voice. The Company's profitability achieved remarkable recovery, successfully embarking on scale development of full services operation.
In 2010, the Company achieved favourable development. The operating revenues amounted to RMB219,864 million. Excluding the amortisation of upfront connection fees, the operating revenues were RMB219,367 million, representing an increase of 5.4% from last year. The revenue contributions from mobile, broadband, value-added and integrated information services continued to increase. EBITDA1,2 was RMB88,495 million, an increase of 7.7% from last year. EBITDA margin was 40.3%. The profit attributable to equity holders of the Company was RMB15,262 million, and basic earnings per share was RMB0.19, an increase of 15.0% from last year, effectively enhancing corporate value. Capital expenditure was RMB43,037 million, and free cash flow3 was RMB27,107 million.
Taking into account the return to shareholders, the Company's cash flow and its capital requirements for planned acquisition of mobile network from parent company in 2012, the Board of Directors has decided to recommend at the forthcoming Annual General Meeting that a dividend being an equivalent of HK$0.085 per share be declared, which is the same as last year.
Driving scale development with innovative integration and differentiation
In 2010, we persisted in integrated operation and strengthened the integration of pipeline services such as voice and broadband services with value-added and integrated information services, focusing on the customers' perceptions. We strived to enhance the market competitiveness and promoted the scale development of full services operation.
Promoting scale development of mobile services, particularly 3G services We strengthened the brand promotion efforts and continued to maintain our "e-Surfing" brand as the leading 3G services brand in the industry. Taking the lead to invigorate the industry value chain, we launched a number of new star 3G smartphones models and implemented differentiated subsidy strategies titling towards 3G terminals. We targeted at the key market segments of office staff and young students while strengthening the development and promotion of differentiated applications. With proliferating mobile Internet applications, we attempted to enrich users' experience and stimulate data traffic. In 2010, the Company's mobile operation experienced scale development. The number of mobile subscribers had increased by 34.43 million, to a total of 90.52 million at year end. The subscriber market share exceeded 10%, an increase of 6 percentage points from the end of 2008. The net addition of 3G subscribers was 8.22 million in 2010, achieving an accelerating growth momentum and bringing the total number of 3G subscribers to 12.29 million. Mobile service revenue reached RMB47,722 million, an increase of 59.1% over last year.
Broadband as core impetus to promote integrated operation Facing the new dynamics from Three Networks Convergence, we launched the "Broadband China, Fibre Cities" project in full swing. We strengthened the construction and upgrade of optic fibre access to home in urban areas, and actively accelerated the broadband bandwidth expansion to offer customers with high-value differentiated broadband experience, with a view to further consolidating our leading broadband market position. Besides, we embedded data traffic products like Internet videos and entertainment games in broadband services, aiming at sustaining the value of the broadband services. In 2010, the net addition of wireline broadband subscribers was 10.02 million, reaching a total number of 63.48 million with primarily stable market share. Revenue from wireline broadband services reached RMB54,127 million, representing an increase of 15.0% from last year.
Promoting sustainable growth in integrated information services We leveraged the edges of enhanced centralised product centres, offering compelling mobile Internet application products. Competitive edges strengthened gradually: encrypted communication, "e-Surfing Blackberry" and "e-Surfing Push to Talk" were officially launched, while the usage volumes of "iMusic", "e-Surfing Video" and "eStore" increased in multiples. For government and enterprises market, scale replication and standardised promotion of various industry-specific applications like government administration and supervision, transport and logistics, digital hospital, integrated e-Surfing RFID were introduced. We vigorously promoted application of new technologies such as the Internet of Things and Cloud Computing and proactively deployed for the featured applications in the areas of mobile payment and mobile positioning. This enhanced our competitive edges in the integrated information services market, while effectively driving the scale development of the mobile and broadband services.
Protecting existing value through integrated differentiation To tackle the intensified challenges from new Internet technology and mobile substitution, we proactively devoted efforts to consolidate the existing wireline voice services. We increased initiatives on customer care for targeted existing customers and leveraged integrated differentiated operation to enhance their loyalty, endeavouring to mitigate the decline in wireline voice services. In 2010, the total number of wireline access lines in services was 175 million, a decline of 13.51 million over the year and revenue from wireline services (excluding upfront connection fees) decreased by 4.2% as compared with last year. Following the continual migration of PAS subscribers in recent years, the operational risks associated with the PAS services had been primarily alleviated.
Consolidating the fundamentals to create competitive edges at all levels
We persistently strengthened the capabilities in network, terminals, channels and services, unswervingly striving for consolidating our fundamentals and enhancing our all round competitive edges.
Enhanced competitive edges in network deployment We constantly improved the network carrying capability and the pipeline value. The 3G network coverage was further expanded and the network quality further enhanced to the industry standard. Meanwhile, we strengthened the WiFi hotspots coverage in popular areas and adopted the integrated service strategy of "CDMA+WiFi", offering customers with high-speed and convenient wireless access. In addition, we increased our capital expenditure and accelerated the fibre deployment and the development of fibre-to-the-home (FTTH). All cities areas in southern China had 4Mbps broadband access capability and the bandwidth capability with 20Mbps reached 58%, representing an increase of 22 percentage points compared to the beginning of the year, establishing a solid foundation for the scale development of full services operation.
Effective alleviation of bottlenecks in terminal supply We actively promoted the invigoration of industry value chain, leveraging 3G smartphones. We strengthened applications customisation and pre-installation to satisfy the requirements of 3G service development. By the end of 2010, the number of 3G handset models exceeded 300, representing an increase of over 200 models from the beginning of the year. New competitive star handset models and smartphones priced around RMB1,000 were launched ongoingly. The varieties of terminals proliferated rapidly with enhanced price-performance ratios.
Rapid improvement in the channel capabilities We strengthened the channels development through cooperation with over a thousand well-known electrical appliance chain stores in China, which served as distributing agents for our terminals and services. The weakness in open channels has been effectively improved. The open channel terminal sales exceeded 60%. We continued to advocate the development of electronic channels, optimising the interface and functions of e-customer service centres and effectively reducing the operating costs and enhancing the efficiency of sales and marketing.
Continual improvement in service system We fully promoted the quality of customer service standards for full services operations, actively carrying out the centralised operation of service hotline "10000" at provincial level and improving the IT systems to support the customer services, particularly to enhance the service quality of mobile services. The service processing time, request response time, customers' complaint ratio, and other service metrics have noticeably improved. Customers perception was enhanced and the churn rate was effectively controlled.
Innovative models implemented for data traffic management operation
Riding on the era of mobile Internet, we proactively established new initiatives for data traffic management operation by improving our core network competence, providing an open platform for integrated services, promoting collaborated efforts in content and application development, and focusing on high value data traffic management operation.
Expanding cooperation in open platform We expanded the cooperation in open platform with brilliant Internet content providers and leveraged the platforms of product centres converging high value data resources such as music, games and videos to attract usage. Meanwhile, we further opened the integrated platforms to providers and offered services like authentication, billing and positioning. We encouraged them to develop new application services based on our integrated platform, leading competitive applications in popular areas such as full screen browsing, online searching, instant messaging, and e-commerce. We also embedded our basic communication capability in our products to provide differentiated services for our customers.
Strengthening in centralised operation We further centralised in management and promotion of mobile Internet products, breaking through the traditional geographical boundaries to realise "one-point access, speedy upload, and entire network services". Thus, we significantly improved the product launch progress and access efficiency and effectively supported the rapid popularisation of mobile Internet products.
Innovative mechanism and system We implemented the trial of corporatising the operation of new services like mobile payment and e-Surfing Video with a profit and market-oriented operation. We endeavored to set up an organisational structure and an incentive mechanism appropriate for the development of mobile Internet services to stimulate entrepreneurship and vibrancy, hence fostering a better development of new businesses.
Enhancing management to enhance corporate and employee value
Strengthening financial management and resources allocation The Company further optimised the resources allocation and investment structure, planned for expenditure in a scientific and comprehensive manner and rendered effective support to fuel scale development of new business, strategic business and key business. We deepened financial transformation, actively implementing centralised financial management at provincial level, effectively preventing risks associated with internal control, and fostering management efficiency. We enhanced centralised treasury management and effectively reduced financial expenses. Through implementation of precision management, we endeavoured to increase returns on investment and consistently enhanced our corporate value.
Promoting coordinated growth of employee value with corporate value We innovated the human resources management mechanism, emphasising on selection of management through competition. Placing value enhancement as priority, we perfected the staff performance appraisal system and speeded up the optimisation of human resources structure, focusing on forging a professional management team, a high-level technical expert team and a highly proficient sales and maintenance team, so as to meet the operation needs of the integrated information services and mobile Internet services.
Corporate Governance and Corporate Social Responsibilities
We strived to maintain high level of corporate governance and corporate transparency to ensure healthy development of the Company and enhancement in corporate value. In 2010, our persistent efforts in corporate governance were widely recognised by the capital market. We have been accredited with a number of awards and appreciations, including "No. 1 Best Managed Company in Asia" by Euromoney for two consecutive years; the awards of "No. 1 Best Managed Company in China" and "No. 1 Best Managed Company in Asian Telecom Sector" by FinanceAsia, and the award of "Asia's Best Companies in Corporate Governance" by Corporate Governance Asia.
In 2010, the Company actively devoted to the rescue work and disaster relief in the earthquake at Yushu, Qinghai Province and the landslide at Zhouqu, Gansu Province. We repaired the damaged optic fibre cables with utmost speed and pioneered to restore the communication in the disaster areas. These initiatives demonstrated our strong sense of social responsibility as a whole. Besides, we successfully supported the Shanghai World Expo and the Guangzhou Asian Games, featuring an informatised World Expo and a digitalised Asian Games and demonstrated the new image of China Telecom as an integrated information service provider. We actively practised green, environment-friendly and low-carbon humanistic concept and basically formed a mechanism for high energy efficiency and low waste emission.
Since 2004, we pioneered to advocate strategic transformation with a changing mindset of operation and development modes. We walked a new road of development leveraging transformation. In particular, after the acquisition of mobile service, we rapidly built up a full services operation system and entered the mobile market, successfully embarking on full services operation with emerging profitable and scale development.
The next two to three years will be a prime period of strategic opportunities. Products convergence will be a trend in the telecommunications industry. New applications leveraging new technologies like Internet of Things and Cloud Computing will emerge. Mobile Internet is undergoing a rapid growth period and wireline broadband is still enjoying considerable room for development. All these initiatives will bring us wider prospects for development. However, we are also facing intensified challenges from increasingly fierce competition in the existing and new businesses.
Looking forward, we are fully confident and will continue to pursue the "Customer - Focused Innovative Informatisation" strategy, aggressively expanding the scale of mobile, broadband and industry application services, while maintaining the contribution of the existing operation and continuing to optimise the revenue structure. By pursuing deepened strategic transformation, we aim to position ourselves as "a leader of intelligent pipeline, a provider of integrated platforms, and a participant of content and application development". We shall persist in our business strategy of high-value data traffic management operation and transform our Company to adapt to the mobile Internet operation mode with a view to creating more value for customers and shareholders.
Finally, on behalf of the Board of Directors, I would like to take this opportunity to express my sincere appreciation to all our shareholders and customers for their support.
Chairman and Chief Executive Officer
22 March 2011
|AWARDS AND RECOGNITION: |
China Telecom Corporation Limited has been voted by professional investors as one of the Most Honored Companies and Best Investor Relations Company in the telecommunications sector in the inaugural All-Asia-Executive-Team ranking organized by Institutional Investor, a highly-regarded international financial magazine. In addition, Mr. Wang Xiaochu, Chairman and CEO of China Telecom was voted the Best CEO in the telecommunications sector.
All-Asia-Executive-Team ranking, by Institutional Investor, was organized for the first year to recognise Asia ex-Japan region's best executives and companies. The survey participants were asked to rank companies in their coverage universe that stand out at each of six executive team attributes, including the accessibility of senior management, industry knowledge, quality and depth of answers to inquiries, transparency of financial reporting and disclosure, among others. The results this year reflected the opinions of over 870 investment professionals at more than 420 institutions.
|China Telecom ranked 221st by revenue in "Fortune Global 500" for the year 2011. (Fortune July 2011 issue) || |
|China Telecom Corporation Limited was awarded "The Best of Asia" by Corporate Governance Asia's 7th Recognition Awards 2011. In addition, Mr. Wang Xiaochu, Chairman & CEO, was honoured with "Asian Corporate Director Recognition Awards 2011". |
The awards are in recognition of corporate who has outstanding performance in various aspects including overall corporate governance track record, management discipline, disclosure and transparency, the discipline of the board of directors and its sub-committees, investor relations practices and corporate social responsibility practices.
|CAPITAL, a renowned Hong Kong financial journal, awarded China Telecom Corporation Limited "The CAPITAL Outstanding China Enterprise Awards - Telecommunications" for six consecutive years. The award, which is judged in terms of the overall performance of the enterprise, goodwill, corporate governance, operation management, market position and financial performance, aimes to honour the contribution Chinese enterprises have made to the global and domestic economies. || |
|China Telecom Corporation Limited has been voted by investors the "Overall Best Managed Company in Asia" in Asia's Best Companies Poll 2011 conducted by FinanceAsia, a reputable financial magazine in Asia. In addition, Mr. Wang Xiaochu, Chairman and CEO of China Telecom was named the "Best CEO in China", and Madam Wu Andi, Executive Vice President and CFO of the Company, was awarded the "Best CFO in China". China Telecom was further accredited by FinanceAsia with the following awards: |
No. 1 Best Managed Company in China
No. 1 Best Corporate Governance in China
No. 1 Best Investor Relations in China
No. 1 Best Corporate Social Responsibility in China
Best Telecom Company in Asia
|Mr. Wang Xiaochu, Chairman and CEO of China Telecom Corporation Limited was awarded the "Best CEO in China", and Madam Wu Andi, Executive Vice President and CFO of the Company, was awarded the "Best CFO in China" in Asian Excellence Recognition Awards 2011 organised by Corporate Governance Asia, a leading regional journal on corporate governance. In addition, China Telecom was also named The Best Corporate Social Responsibility in China and Best Investor Relations in China. |
Asian Excellence Recognition Awards is designed to recognize Asian companies who perform excellently in investor communications, business ethics, corporate social responsibility, environmental practices and financial performance. The scoring of the awards and recognitions are mainly based on investors' opinion on companies' performance in the aforesaid areas.
|China Telecom was accredited as platinum winner in the poll of "Corporate Awards 2010" by The Asset, a reputable financial magazine in Asia. The platinum winners have attained rigorous standards in six categories of corporate endeavors: financial performance, management acumen, corporate governance, social responsibility, environmental responsibility and investor relations. |
This is the second year of The Asset organizing "Corporate Awards" which is based on a ranking of listed companies in Asia by global leading investment professionals and research analysts.
|China Telecom Corporation Limited has not only been voted again by leading equity analysts the "No. 1 Best Managed Company in China", but also again the "No. 1 Best Managed Company in Asia" across all industries in the latest "Best Managed Companies in Asia Poll" by Euromoney, an international reputable financial magazine. China Telecom is the first company receiving such grand honour two years in a row. In the individual categories, China Telecom has also been ranked as the "Best Corporate Governance in Asia", the "Most Convincing and Coherent Strategy in Asia" and the "Most Accessible Senior Management in Asia". |
Euromoney's "Best Managed Companies in Asia Poll" is one of the most reputable awards in Asia. This is the 10th year of the event and is highly recognized by capital market participants. This year the ranking is based on a survey of 287 leading analysts at investment banks and research institutes in Asia who were asked to name which companies were the most impressive across a number of factors including quality of management, market strength, profitability, growth potential, management accessibility, accounting transparency and corporate governance amongst others.