China Telecom drafts 3G, 4G strategies and Capex for 2014

China Telecom has outlined its 3G and 4G expansion strategies and Capex (capital spending) plan for 2014.

In an analyst call last week, China Telecom, which competes with China Mobile and China Unicom, said its 2014 Capex would be $12.89 billion against $12.85 in 2013, indicating a marginal increase in its telecom infrastructure investment.

China Telecom Chairman Wang Xiaochu said the company will apply for the permit of LTE FDD operation and will deploy LTE network appropriately with regard to the government policy and business development.

Also read: China Mobile outlines network strategy in 2014 and Capex plans

China Telecom Capex for 2014

China Telecom will invest $6.79 billion in mobile infrastructure in 2014 against $4.72 billion in 2013 and $6.1 billion in broadband, Internet and other areas in 2014 as compared with $8.13 billion in 2013.

In 2014, China Telecom will focus on building a nationwide integrated 4G 3G high-speed network to enhance customers’ experience and operating return.

Networks, broadband access, enhancement of intelligent network and integrated information services will be the main focus areas.

China Telecom will focus on one LTE network incorporating both TD and FD LTE accesses, with most of the LTE Capex supporting TD and FD LTE infrastructure, towers and core network.

LTE deployment starts from hotspots in densely populated areas of the cities.

China Telecom plans 4G roll outs to overlay on existing superior nationwide 3G and high-speed fiber broadband networks to provide customers with high-speed and seamless data service experience

The state-government owned China Telecom has launched LTE services in nearly 100 major cities in mid-Feb 2014, with the first batch of 4G data devices all compatible with TD-LTE.

China Telecom Capex for 2014

2013 Capex focus

China Telecom focused on completed intensive phase of fiber network upgrade in cities as planned to push general coverage in cities with ≥20Mbps and rural areas with ≥4Mbps customer access bandwidth with 100Mbps coverage reaching 84 million homes.

Last year, China Telecom optimized 3G network and expanded capacity in high data traffic areas and commenced LTE network deployment in hotspot areas.

Plan for 2017

China Telecom plans 50 percent revenue to come from emerging businesses such as data traffic operation, Internet applications, Informatization services, etc. Currently, these emerging business revenue contributes 25 percent to total income.

China Telecom data revenue in 2013

China Telecom revenue

China Telecom said its operating revenues rose 13.6 percent to RMB 321.6 billion in 2013.

Profit increased by 17.4 percent to RMB 17.5 billion. EBITDA was RMB 96.6 billion, while EBITDA margin was 34.0 percent.

Mobile services revenue grew 23 percent to RMB 113.8 billion.

China Telecom 3G subscribers

The net addition of mobile subscribers was approximately 25 million, with total mobile subscribers reaching 186 million.

3G subscribers had a net addition of approximately 34 million, with a total exceeding 100 million. The number of 3G subscribers as a percentage of total mobile subscribers increased to 56 percent.

Wireline broadband revenue rose 6 percent to RMB 70.8 billion. Wireline broadband subscribers exceeded 100 million, with a net addition of approximately 10 million.

Among these subscribers, the number of Fibre-to-the-Home (FTTH) subscribers was close to 27 million, representing an increase of over 70 percent. FTTH subscribers accounted for nearly 30 percent of the total number of wireline broadband subscribers.

Baburajan K
editor@telecomlead.com