China Telecom reports 4% decline in net profit

China Telecom has announced its first half results for 2015, with a decline of 4% in net profit to $1.71 billion (10.98 billion yuan).

The operator’s muted financial results were largely a result of the government’s VAT reform which was introduced in June 2014. 

Operating revenues fell 0.6% to $25 million (165 million yuan) while service revenues were flat at $23 billion (147.02 billion yuan). 

"In the future, with the continual expansion of the VAT reform to other industries, it is expected that the company will be entitled to more input VAT credits, which will be beneficial for the enhancement of its profitability in the long term," said the company.

The operator added 22 million to its 4G customer base, bringing its total to approximately 29 million connections by the end of June 2015. Its overall mobile subscriber base increased from 185.6 million to 191.4 million. 

"Taking full advantages of tower sharing, the company rolled out the 4G network fast and effectively to enhance time-to-market and savings in capital expenditure," said China Telecom. The company was awarded its FDD-based 4G licence earlier in February. 

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