China Telecom Q1 2014 result: revenues up 7%, LTE demand eats into 3G

China Telecom on Monday said its Q1 2014 revenue increased 6.9 percent to $13.3 billion (RMB 83,184 million) and profit increased 17.9 percent to $887 million (RMB 5,547 million). Its 3G mobile subscriber growth decreased due to demand for 4G LTE.

The state-run China Telecom, which competes with China Mobile and China Unicom, said it added 1.03 million 3G subscribers in Q1 2014 against 6.63 million in Q4 2013 and 9.15 million in Q3 2013. Demand for 4G LTE was one of the main reasons for the substantial decrease in 3G subscriber growth.

China Telecom mobile subscriber base decreased to 183.2 million in Q1 2014 from 185.58 million in Q4 2013 and 181.14 million in Q3 2013.

The 3G subscriber base of China Telecom increased to 104.14 million in Q1 2014 from 103.11 million in Q4 2013 and 96.48 million in Q3 2013.

Mobile voice usage decreased to 153.29 million minutes in Q1 2014 from 159.17 million in Q4 2013 and 155.21 million in Q3 2013.

China Telecom ARPU was steady.

Wang Xiaochu, chairman and CEO of China Telecom, said: “For the first quarter of 2014, the number of mobile subscribers of the company was 183 million, representing a net decrease of 2.38 million. The number of 3G subscribers was 104 million, representing a net addition of 1.03 million. The decline in the number of mobile subscribers in the quarter was mainly due to the increasing market competition driven by the launch of LTE services and strengthened marketing promotion by the peers.”

China Telecom Capex 2014 plans

China Telecom 4G plans

China Telecom recently said it launched 4G in 100 cities in mid February 2014. The company is currently applying for LTE FDD license.

Facing the challenges from the new Internet technology and the intensified mobile substitution, the number of local access lines in service of the Group declined by 2.97 million in the first quarter. Services like Internet access and data services continued its robust growth momentum, which effectively offset the impact of decline in the wireline voice services.

Earlier, China Telecom said it would invest RMB 80,300 million towards Capex in 2014 against RMB 79,992 million in 2013. Out of this, China Telecom will invest RMB 42,300 million (RMB 29,359 million) in mobile and RMB 38,000 million (RMB 50,633 million) in broadband and Internet related areas.

China Telecom investment

China Telecom strengthened the initiatives in network operation and enhanced the quality of network maintenance focusing on 3G and 4G, wireline broadband and wireless broadband. The network operations and support expenses for the first quarter of 2014 increased by 30.6 percent in Q1.

Note: The chart is from China Telecom presentation on March 19

Baburajan K
editor@telecomlead.com