2011-03-22 17:44

China Telecom, the smallest of the country's three wireless carriers, matched expectations to report a 5 percent rise in fourth-quarter net profit, helped by rising revenue from mobile and broadband services.

China Telecom made a net profit of 3.17 billion yuan ($482.9 million) in the fourth quarter of 2010, according to Reuters calculations based on company figures, and reported a net profit of 15.76 billion yuan for the full year.

"The next two to three years will be a prime period of strategic opportunities," Chairman Wang Xiaochu said in a statement to the Hong Kong stock exchange. "Products convergence will be a trend in the telecommunications industry."

The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) margin, a key indicator for profitability in the telecoms sector, clocked in at 40.3 percent in 2010, up from 39.5 percent in 2009.

China Telecom, a newcomer to China's mobile market, operates the country's largest fixed-line network and is aggressively promoting broadband over that channel.

It remains the smallest mobile operator in China with 94 million users at the end of January, compared to 170 million at China Unicom and 589 million at China Mobile .

Its number of broadband subscribers rose 18.7 percent in 2010 from the prior year to 63.5 million, as the company focused on attracting higher-yielding customers to make up for a fall in revenue from its mainstay fixed-line operations.

Like its peers in more developed economies, China Telecom has been seeing revenue from its core fixed-line operations slip as more users migrate to mobile. The company has been trying to push data and value-added services to make up for the shortfall.

Its shares were up about 25 percent in 2010, beating a 5 percent advance on the benchmark Hang Seng Index .