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1、Interim Results 2010,China Telecom Corporation Limited,25 August 2010|www.chinatelecom-,Forward-Looking Statements,Certain statements contained in this document may be viewed as“forward-looking statements”within the meaning of Section 27A of the U.S.SecuritiesAct of 1933(as amended)and Section 21E o
2、f the U.S.Securities Exchange Actof 1934(as amended).Such forward-looking statements are subject to knownand unknown risks,uncertainties and other factors,which may cause theactual performance,financial condition or results of operations of ChinaTelecom Corporation Limited(the“Company”)to be materia
3、lly different fromfuture performance,financial condition or results of operations implied bysuch forward-looking statements.In addition,we do not intend to updatethese forward-looking statements.Further information regarding these risks,uncertainties and other factors is included in the Companys mos
4、t recentAnnual Report on Form 20-F filed with the U.S.Securities and ExchangeCommission(the“SEC”)and in the Companys other filings with the SEC.,2,Management Team,Mr.Wang Xiaochu,Chairman&CEO,Mr.Shang Bing,President&COO,Madam Wu Andi,Executive Vice President&CFO,3,Agenda,Overview,Business Review,Fin
5、ancial Performance,4,Overview,Highlights,Effective integratedoperation drivingremarkable earningsrecoveryAccelerate proactivebroadband deployment tostrengthen network edge,Mobile business growingrapidly with wirelinebusiness structure furtheroptimizedTo strengthendifferentiationdevelopment leveragin
6、g“Mobile Internet”to createmore value,6,1.,3.,Unless otherwise stated in this presentation,All financial data are unaudited&adjusted to exclude Upfront Connection Fees,Net Profit represents profit attributable to equity holders of the Company,Solid Results,Adjusted ResultsOperating Revenue(RMB Mil)E
7、BITDA(RMB Mil)EBITDA MarginNet Profit(RMB Mil)EPS(RMB)Free Cash Flow(RMB Mil)Access Lines in Services(Mil)Mobile Subs(Mil)Wireline Broadband Subs(Mil),1H2009102,55443,33942.3%8,4120.10419,6522009.12188.5656.0953.46,1H2010107,55245,75942.5%8,8110.10918,5912010.6181.0774.5258.33,Change4.9%5.6%0.2pp4.7
8、%4.7%-5.4%Change-7.4918.434.87,Note:2.4.,EBITDA was calculated before CDMA Network Leasing Fees(1H2009:RMB3,583 mil;1H2010:RMB6,365 mil)to enhance comparabilityFree Cash Flow=EBITDA-CDMA Network Leasing Fees-CAPEX-Income Tax Expenses,7,Remarkable Earnings Recovery,RMB Mil,Net Profit,Profitable Scale
9、 DevelopmentLeverage differentiated edge ofintegrated operation of mobile,wireline&Internet to ramp up mobile businessexpansion&continuous overall revenuegrowth,8,412,4,859,8,811,Tilting resources towards high growth&high return businesses to achieveprofitable scale developmentScale benefit gaining
10、momentum&driving remarkable earnings recovery,1H2009,2H2009,1H2010,To increase proactive initiatives in2H2010 to further expand scale&strengthen long-term sustainablebusiness development,8,Voice,Data,Others,Voice,Data,Mobile,Revenue Growth Drivers,-7.9pp,+3.8pp,+0.1pp,+4.9pp,+4.8pp,-0.8pp,OverallRev
11、enue+4.9%,RMB Mil,4,905,-864,107,552,102,554,-8,145,3,947,104,5,051,1H2009,Wireline,Wireline,Wireline,Mobile,Mobile,Others,1H2010,9,Rapid Mobile Expansion with Robust Quality,Service Revenue,Highlights,RMB Mil,12,814,17,189,22,770,Mobile sub base expanding rapidly:1H2010 net add 18.43 milRevenue&sub
12、 base growing in tandemwith relatively stable ARPU:1H2010 RMB58.1 vs FY2009 RMB59.5,Mil,1H2009,2H2009Subscribers,1H201074.52,Mobile Data growing rapidly:Mobile Data/Mobile Revenue 34.5%Invigorated terminal supply chain:700 models of CDMA handsets in supply(including 100 3G handset models),27.914.5%,
13、39.285.8%,56.097.7%,9.5%,Open distribution channel achievingscale:Point-of-sales reached 560k(4x vs2009.1)(including GOME,Suning,D.Phone),2008.12,2009.6 2009.12Mobile Sub Market Share,2010.6,10,Inter-district,RMB Mil,Optimizing Wireline Business Structure toProactively Alleviate Risk,Optimized Wirel
14、ine Business Structure,Proactively Alleviating Risk,RMB Mil52.6%,60.1%,PAS RevenueRMB Mil,6,567,-56.5%2,859,86,55245,49241,0601H2009,8.9%-19.8%,82,45849,54332,9151H2010,Call Revenue,1H20093,3841H2009,1H2010-24.9%2,5411H2010,Wireline Voice Revenue Wireline Non-Voice RevenueWireline Non-Voice Revenue/
15、Total Wireline Revenue,With progressive cancellation of Inter-district CallTariff,this portion of revenue will become Intra-district Call Revenue,11,70%,by end 2012,Accelerate Proactive Broadband Deploymentto Strengthen Network Edge,CAPEX,Speed UpBroadbandDevelopment,Enhance CoreCompetence,RMB Mil,3
16、8,04217,0332009,44,000OriginalBudget39,00017,9182010E,Adjusted2010 Budget,2010 extra CAPEX:RMB5 bil2011 extra CAPEX:RMB10 bil(Adjusted 2011 provisional CAPEX budget(RMB50 bil)to be determined in early 2011with regard to the latest business development)Total broadband net add target for 2010&2011 20
17、mil(i.e.3 mil extra)To enhance corporate value:Net revenue from extra broadband net add(less relevant cash expense)Incremental depreciation of extra CAPEXEnhance core competence:Customer access bandwidth capability(Coverage in cities)20M+close to full coverageby end 2011,1H CAPEX12,operation,Seamles
18、s,applications,on multi-,multi-,access,Full Services Integrated Operation GainingMomentum&EdgeDifferentiated&integrated operation driving corporate&customers value,Converged platforms,products,services&channelsto facilitate integratedMobile subsbundling penetration:services&50%(same as 2009)OneHome
19、subs/Household subs:screens&40%(8pp vs 2009)multi-devices BizNavigator SME penetration:48%(5pp vs 2009),58 mil wirelinebroadband subs,180 milaccesslines inservices,Centralized&highlyefficient resource allocationwith coordinated operationacross multi-servicesEnhancing customers satisfaction&loyalty,7
20、4 mil mobile subsDriving corporate&customers value13,14,Business Review,15,Revenue Breakdown,RMB MilWirelineVoice 1DataInternet AccessVAS&Integrated Information ServicesManaged Data&Leased LineOthersMobileVoiceDataOthers 2Total,1H200986,55241,06042,56723,18113,8595,5272,92516,0029,0513,7633,188102,5
21、54,1H201082,45832,91546,51426,73913,7136,0623,02925,09414,1028,6682,324107,552,Change-4.7%-19.8%9.3%15.3%-1.1%9.7%3.6%56.8%55.8%130.3%-27.1%4.9%,Note:1.1H2010 Wireline Voice Revenue included RMB19,799 mil from local voice,RMB7,683 mil from DLD,RMB952 mil from ILD and RMB4,481 mil from interconnectio
22、ns2.Mobile Others mainly included revenue from sales of terminals16,Data,(,56.2%,Non-,voice,Full Service Revenue Structure,1H2010 Revenue Structure,Revenue Structure Further Optimized,RMB MilMobile 25,094Wireline 82,458,Others9.3%(10.6pp),34.5%(11pp)Voice0.4pp)Voice39.9%(7.5pp)60.1%(7.5pp),Mobile re
23、venue as growth driverMobile revenue/Total revenue:23.3%(7.7pp yoy)Mobile revenue 56.8%yoyFurther optimized mobile revenue mixMobile data/Total mobilerevenue:34.5%(11pp yoy)Further mitigated risk in wirelineoperationWireline non-voice/Totalwireline revenue:60.1%(7.5pp yoy),17,To stabilize voice,cons
24、umption and enhance,customer stickiness&value,&enriching applications,risk by migrating mid-to-,service while strictly,operation to ensure,To strengthen customer,retention&stickiness by,program&churn alert,Wireline Voice Services,Access Lines in Services,Major Initiatives,MilHouseholdGovernment&Ente
25、rprisePublic TelephonePASTotalLocal Usage(Pulses Mil)DLD Usage(Minutes Mil)ILD Usage(Minutes Mil),2009.6114.830.815.338.5199.4Voice Usage,2009.12112.232.115.129.2188.61H2009166,63843,359629,2010.6111.133.614.821.6181.11H2010128,77836,339590,by promoting package dealsTo alleviate PAS operationhigh en
26、d PAS subs to mobilecontrolling cost of PASprofitabilityenhancing customer caresystem,18,1H2009 1H2010,53.46,4.41,Mil,Accelerating Wireline Broadband Development,Broadband Access Revenue,Major Initiatives,RMB Mil,22,745,15.6%,26,302,81.2 78.4Broadband ARPU(RMB)Subscribers58.3349.05 4.874.78,To expan
27、d customer base&sustain leadingmarket positionAccelerate fiber access networkdeployment&bandwidth upgradeEnrich broadband applications topromote usageTo leverage the highly integrated wireline&wireless broadband operation providingcustomers with one unified account toenhance their experience&valueTo
28、 strengthen broadband servicing capability&edges to enhance premium branding of“eSurfing Broadband”and customerperception,2009.6,2009.12Net Adds,2010.6,19,16.7%2,858,2,450,RMB Mil,RMB Mil,Wireline VAS&Integrated Information Services,Revenue,Major Initiatives,RMB Mil,13,85912,031,7.0%,13,71312,879,To
29、 capture growing demand forinformatization by enriching content ofVAS&integrated information services,1H2009 1H2010Ex-PAS related Wireline VAS PAS-related revenue&Integrated InformationServices revenueKey Services“Best-Tone”Typeof InformationServices,To expand services usage&penetration by follow-on
30、 targetedmarketing of VAS usageTo sustain services development bywidening mode of cooperation&deepening open collaboration onapplications,IT Services&Applications,1H20092,3281H2009,12.8%,1H20102,6251H2010,20,Min,12,814,RMB Mil,1H2009,7.18,Mil,Mobile Services Gaining Traction,Mobile KPIs Trending Upw
31、ard,Mobile Data Service,MOU 311Mobile ServiceRevenue,77.7%,33122,770,“189 mailbox”subs(Mil)“eSurfing Live”subs(Mil)“eSurfing”Video subs(Mil),2009.1214.064.310.1,2010.628.569.840.5,Change1x1x4x,3,763Mobile data revenue,8,6681H2010,Mobile Best Tone Usage(Mil)13.7Strategy,18.5,35%,3G Subscribers76.4%4.
32、07,Leverage differentiated offerings to expand subbaseAdjust tariff and package plans to promote datausage&reinforce data traffic operationEnhance targeted&experience-based marketingto improve brand awareness&customersatisfaction,2009.12,2010.6,Promote a flat structure of distribution channel&foster
33、 scale development of the handset supplywith priorities for mid-range&star handsets21,Distribution,channel,to expand terminal,Establish open and,mid-range,star handsets,and smartphones,between open and,Solid Execution Driving to Success,Product R&D Network,Excel in-house development to Promote broad
34、banddrive high-value traffic network upgrade to Open platform to proliferate third-support high bandwidthparty products business development,Optimize EVDO network to,strengthen wireline-wireless integratedservice capability,To strengthen,Terminal Supply precision,Ride on“eSurfing”management&mobile i
35、nternet handset converged operation,market to achieve synergy&,Scale development of differentiation edge well-coordinated,distribution channelfor full servicesoffering,Achieve synergy,Service Support self-operated,Offer premium customer service to channels,improve overall customersatisfaction,Streng
36、then targeted customer,retention,especially formid-to-high end customers,22,Financial Performance,23,Key Financial Information,RMB MilOperating RevenueOperating ExpensesDepreciation&AmortizationNetwork Operations&SupportIncl:Mobile Network LeasingPersonnelSG&AIncl:Mobile Handset SubsidiesInterconnec
37、tion&OthersIncl:Wireline InterconnectionMobile InterconnectionCost of Mobile Terminals SoldOperating ProfitNet ProfitEBITDA,1H2009102,55488,82726,02920,1333,58316,35117,5954,8398,7193,2051,3972,74113,7278,41243,339,1H2010107,55293,99725,83922,8126,36517,19619,7526,0988,3982,7082,5851,80413,5558,8114
38、5,759,Change4.9%5.8%-0.7%13.3%77.6%5.2%12.3%26.0%-3.7%-15.5%85.0%-34.2%-1.3%4.7%5.6%,24,stringent CAPEX control in prior years,strengthen full services operation,Optimized Cost Structure,Operating Expensesas a%of Operating Revenue,Optimized Cost Structure,86.6%25.4%19.6%15.9%17.2%4.5%4.0%1H2009,87.4
39、%24.0%21.2%16.0%18.4%4.9%2.9%1H2010,Depreciation&AmortizationNetworkOperations&SupportPersonnelSG&AInterconnectionCost of TerminalSales&Others,Depreciation G&A 0.3ppNetwork Operations&Support:1.6pp mainly due to increase inmobile network leasing feesPersonnel:StableInterconnection:0.4pp mainly dueto
40、 higher mobile interconnectionexpenses,25,Proactive Cost Strategy to Support Full ServicesDevelopment,1234,SG&ANetworkOperations&SupportPersonnelDepreciation&Amortization,Increase marketing&servicing initiatives,tilting towards high growth&highreturn businessesImplement stringent handset subsidy pol
41、icy,reducing subsidy-to-mobileservice revenue%graduallyCompress G&A expenses,strictly controlling indirect operating expensesAssure network maintenance initiative to ensure leading network qualityImplement precision management&reasonably control costs,like power&maintenance costsAppropriately increa
42、se investment in marketing&R&D personnel cost toempower the workforce for full services operationStrengthen CAPEX management&strictly control low return investmentsEnhance resource utilization by actively redeploying or dealing with inactiveassets,26,3.2%,Internet,Others,broadband access equipment&c
43、able,conduits,buildings,minor purchases,R&D,etc.,Rationalized CAPEX Structure,CAPEX Structure,Accelerate broadband access networkconstruction&optimization to enhancecapability for servicing bandwidth-intensive business&consolidate leadingedge for sustainable development8.7 mil broadband access capac
44、ity in 1H2010Customer access bandwidth capability,58.5%,64.0%,Coverage in cities4M+:95%20M+:44%,15.9%3.6%4.6%17.4%1H2009,15.8%2.4%14.6%1H2010,Broadband&VAS&IntegratedInformationServicesIT&SupportWireline VoiceInfrastructure&,Note:,Tilting investment towardstransformation businesses enhancing network
45、capabilities for supporting transformation1.Broadband&Internet includes data network,transmission network,2.VAS&Integrated Information Services includes VAS platform&ICT3.Wireline Voice includes switches,voice access equipment&cable4.IT&Support includes enterprise informatization services5.Infrastru
46、cture&Others includes air-conditioning supply facilities,27,capability well support sustainable development,Solid Financial Strength,Total Debt/Total Capitalization,Net Debt/EBITDA*,32.0%,-4.5pp,27.5%,0.97,-0.31x,0.66,1H2009,1H2010,1H2009,1H2010,Solid financial strength,strong free cash flow&robust
47、repaymentNote:*Net Debt/Simple Annualized 1H2010 EBITDA28,Enhancing,Promoting Coordinated Sustainable Developmentvia Financial Management Transformation,To reinforce financialdecision support&valuemanagement capability withstrategy focused&valuemanagement orientedShareholdersValueTo establish a comp
48、rehensiveEVA-oriented valuemanagement system toincrease capital utilization,To accelerate financialstructure optimizationto promote change ofcorporate developmentmodeTo strengthen internalcontrol to improve riskmanagement capability,29,For further information&enquiries,please,irchinatelecom-,Thank Y
49、ou,contact our Investor Relations Department at,www.chinatelecom-30,Appendix 1,Extracted from unaudited consolidated statement ofcomprehensive income for the 6 months ended 30 June 2010(incl.upfront connection fees),RMB MilOperating RevenueUpfront Connection FeesOperating ExpensesNet Finance CostsIn
50、vestment Income,Share of Profits of AssociatesProfit Before TaxationIncome TaxProfit for the PeriodEquity Holders of the CompanyNon-controlling Interests,1H2009103,146592(88,827)(2,268)7512,126(3,071)9,0559,00451,1H2010107,817265(93,997)(1,855)3712,002(2,885)9,1179,07641,31,Appendix 2,Extracted from
