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China Telecom Corporation Limited
(A joint stock limited company incorporated in the People's Republic of China with limited liability)

FAQs       

Q.1. How was the Company's operating performance in the first three quarters of 2022?

In the first three quarters of 2022, the Company seized the strategic opportunities which emerged from the development of the digital economy, adhered to the new development principles, coordinated epidemic prevention and control with corporate operation and development, fully implemented the “Cloudification and Digital Transformation” strategy, and continued its development as a service-oriented, technology-oriented and secured enterprise. As a result, the Company's operating performance maintained a good growth momentum with new achievements in high-quality development. The Company has declared an interim dividend for the first time, constantly creating new value for shareholders.

In the first three quarters of 2022, operating revenues were RMB360,982 million, representing an increase of 9.6% over the same period of last year, of which service revenues were RMB328,601 million, representing an increase of 8.0% over the same period of last year. The profit attributable to equity holders of the Company was RMB24,543 million, representing an increase of 5.2% over the same period of last year. Excluding the one-off after-tax gain from the disposals of its subsidiaries (the one-off after-tax gain from the disposals of E-surfing Pay Co., Ltd and China Telecom Leasing Corporation Limited was approximately RMB1,416 million) last year, the year-on-year increase was 12.0%. Basic earnings per share were RMB0.27. EBITDA was RMB100,458 million, representing an increase of 4.3% over the same period of last year. EBITDA margin (calculated based on EBITDA divided by service revenues) was 30.6%.

Q.2. How was the Company's mobile service performance and 5G commercialisation?

The Company insisted on the individual informatisation upgrade led by 5G, continued to improve 5G network coverage, continuously enriched 5G applications, and promoted network access and usage for 5G subscribers, driving the steady increase of user scale and value. In the first three quarters of 2022, mobile communications service revenues amounted to RMB148,367 million, representing an increase of 5.6% over the same period of last year. The total number of mobile subscribers reached approximately 390 million with a net addition of 17.46 million. The number of 5G package subscribers reached approximately 251 million with a net addition of 63.24 million, while the penetration rate reached 64.4%. The mobile ARPU amounted to RMB45.5.

Q.3. How was the Company's 5G network deployment and result of co-building and co-sharing with China Unicom?

The Company continued deepening the co-building and co-sharing of networks with China Unicom on all fronts. In the first half of the year, the number of co-built and co-shared 5G base stations increased by 180,000, with the number of 5G base stations in use reaching 870,000. The number of co-shared 4G base stations increased by 210,000, with accelerated promotion of "one single 4G network". The cumulative investment savings for both parties amounted to RMB240 billion, while the annualised OPEX savings for the Company exceeded 20 billion.

Q.4. How was the Company's wireline and Smart Family service performance?

Focusing on customers' demand for digital life, the Company accelerated the expansion of Gigabit products at scale to create a platform for digital life applications with wider connectivity, broader reach and higher level of intelligence, so as to promote the integrated development of Smart Family, Smart Community and Digital Village. In the first three quarters of 2022, the Company's Wireline and Smart Family service revenues reached RMB89,433 million, representing an increase of 4.6% over the same period of last year. The number of wireline broadband subscribers reached 179 million, and revenue from Smart Family maintained rapid growth, driving the broadband blended ARPU to reach RMB46.6. The value contribution from Smart Family continued to improve.

Q.5. How was the Company's Industrial Digitalisation performance?

The Company actively promoted the in-depth integration and development of the digital economy and the real economy, deepened government and enterprise reform on all fronts, optimised its proprietary capabilities such as cloud, network, data, intelligence, security, platform, etc., enhanced the construction of cloud core platform, and strengthened differentiated competitive advantages of e-Surfing Cloud, to push forward the digital and intelligent upgrade of vertical industries and empower the digital transformation and development of the society. In the first three quarters of 2022, Industrial Digitalisation service revenues reached RMB85,632 million, representing a year-on-year increase of 16.5% on a comparable basis (revenue for Industrial Digitalisation in the first three quarters of 2021 has excluded the Internet Finance revenue before the disposal of E-surfing Pay Co., Ltd). Revenue from e-Surfing Cloud continued to double.

Q.6. How was the Company's e-Surfing Cloud and IDC performance?

Adhering to the cooperation philosophy of "Broadest Scope, Best Service, Best Value, Farthest Growth", the Company conducted ecological cooperation to further promote the vigorous development of cloud technologies and industry to form a new digital foundation featuring cloud-network integration for the development of the digital economy. Insisting on the leading role of sci-tech innovation, the Company's efforts in tackling core cloud computing technologies constantly achieved new results, equipping itself with full stack cloud capabilities that are independent and controllable, secure and reliable, open to cooperation and industry-leading. The Company has become the source of original technologies for cloud computing. Focusing on cloud migration needs of different customer groups, the Company provides public, private and hybrid cloud services that are polymorphic, high-performance, inclusive and convenient for government, enterprises and the general public. The Company achieved remarkable results in market expansion and continued to lead in the government administration public cloud market. In the first half of the year, revenue from e-Surfing Cloud reached RMB28.1 billion with the year-on-year growth rate reaching 100.8%. In line with the demands from the "East-to-West Computing Resource Transfer" project, the Company accelerated the building of new hub capabilities. In the first half of the year, the development of IDC further enhanced with its revenue amounting to RMB17.9 billion, representing an increase of 11.1% year-on-year. As the fifth fundamental network of the Company, e-Surfing Internet of Video Things pushed forward the construction of digital cloud-network ecology of videos. The aggregate number of connected devices reached 30 million, with rapid launch of diversified use cases such as "Kitchen Monitoring" etc.

Q.7. What is the dividend policy of the Company?

The Company attaches great importance to shareholder returns and strives to enhance its profitability and cash flow generation capability while effectively controlling capital expenditure. The Board of Directors has resolved to declare an interim dividend for the first time in 2022, and the profit distributed in cash will be 60% of the profit attributable to equity holders of the Company in the first half of 2022, i.e., RMB0.120 per share. This successfully fulfilled the commitment to introduce interim dividends made by the Company during A-Share offering. The Board of Directors will take into full consideration the Company's profitability, alongside cash flow levels and capital needs for its future development, and will make recommendations at the shareholders' meeting after comprehensively reviewing the annual dividend distribution proposal for 2022, furthering its efforts to create more value for shareholders.

Within three years after A-share offering and listing, the profit to be distributed in cash for each year will gradually increase to 70% or above of the profit attributable to equity holders of the Company for that year. The Company will share the results of its development with wider shareholders and continue to create more value.

Q.8. What is the Company's CAPEX plan?

In the first half of 2022, focusing on the future growth areas, the Company further optimised its investment structure, with its CAPEX reaching 41.7 billion. Of which, the proportion of investment in Industrial Ditigalisation increased by 9.3 percentage points and was the only area with an increase in proportion. CAPEX budget for 2022 remains unchanged at 93 billion.

Q.9. How was the Company's cloud-network capabilities deployment and network upgrade?

In line with the national layout of integrated Big Data centres, the Company continued to optimise the "2+4+31+X+O" computing power layout in accordance with the regional economic development and natural resources conditions. Through the establishment of a layer-based computing power service system coordinating cloud, edge and terminals, the Company created an integrated and innovative computing power infrastructure. The Company carried out network reconstitution around computing power centres and promoted the change of traffic flow from the dominant "north-south" direction to "north-south + east-west" directions. The Company also continued optimising its three-dimensional, wide-coverage, and high-performance network deployment with holistic coverage of land, sea, air and space. The Company pushed forward integrated and intelligent channelling of cloud-network and realised cloud-led network resource allocation and cloud-led network channelling. The Company currently owns more than 700 IDC sites and the number of IDC cabinets amounted to 487,000 with a utilisation rate of 72%. The Company has the greatest number and the most extensive distribution of IDC resources in China. In the first half of the year, the number of newly built e-Surfing Cloud servers reached 81,000, with the scale of computing power reaching 3.1EFLOPS while "One-City-One-Pool of Cloud Resources" cumulatively covered more than 160 cities.

Q.10. How was the Company's sci-tech R&D?

The Company took the promotion of sci-tech innovation as the strategic guide for its high-quality development. The Company constantly scaled up sci-tech innovation, boosted its sci-tech capabilities, and made solid strides towards becoming a sci-tech company. The Company was awarded the title of "Enterprises with Outstanding Contribution to Sci-tech Innovation" by State-owned Assets Supervision and Administration Commission of the State Council (SASAC). The Company promoted the independence and self-control of core technologies, strengthened its leadership in forefront technologies of cloud computing and the innovation of original technologies, as well as completed and released the commercial version of CloudOS4.0. The Company made major breakthroughs in proprietary development of customised servers and databases. The Company's proprietary Quantum-encrypted Calls product was launched nationwide, alongside the roll-out of its first proprietary smart cloud camera. The Company also accelerated the conversion of its sci-tech achievements, with the number of proprietary achievements reaching 74 and its capabilities in proprietary development significantly strengthening. In the first half of the year, the percentage of proprietary IT systems and service platforms increased by 8.9 percentage points over the same period last year. The number of new patents was 1,128, representing an increase of 145% year-on-year. Cooperation and innovation among industry, academia, research and development (R&D) institutes and customers entered a substantive stage with more than 40 cooperation projects being initiated in the fields of fundamental research and application research with leading universities and scientific research institutes.

Q.11. What are the Company's priorities in the second half of 2022?

The Company will continue to seize on new stages of its development and implement its new development principles completely, accurately and comprehensively, while proactively serving and integrating into the new development pattern. The Company will continue to promote its high-quality development and fully implement its "Cloudification and Digital Transformation" strategy. Through the integration of cloud, AI, security and greenness, the Company will speed up the digitalised, scene-based and convergent upgrade of products and accelerate the nurturing and development of strategic emerging services such as cloud, security, AI and Big Data. The Company will insist on leading its corporate development with sci-tech innovation, enhance its capabilities in corporate value creation and sustainable development and proactively implement social responsibilities. The Company will also fully motivate and stimulate the enthusiasm, initiative and creativity of all employees and expedite the building of a world-class enterprise.

updated 26th October, 2022


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