China’s third-largest mobile operator China Telecom today reported an expected huge drop in 2008 net profits but set some ambitious targets for future growth of its 3G network. Net income last year tumbled 96 percent to CNY884 million (US$130 million) from CNY24.2 billion a year earlier after China Telecom booked a CNY24 billion impairment charge on its ‘Xiaolingtong’ low-cost mobile network. Full-year operating revenues grew 4 percent to CNY184.8 billion.

China Telecom stressed that it would be able to perform well this year after acquiring its CDMA mobile business from China Unicom in an industry-wide restructuring in 2008. “The company’s mobile service has shown favourable growth momentum with a net increase of 2.72 million customers in the first two months of 2009, a turnaround from the decline in subscribers after the acquisition of the CDMA business in the fourth quarter of last year,” noted a company statement. “The total number of mobile subscribers reached 30.63 million as at the end of February 2009.” By 2011, the operator said it plans to have more than 100 million subscribers, with mobile data generating over 35 percent of mobile service revenue. Other targets include complete CDMA2000 1xEV-DO coverage in more than 300 cities by the end of July this year (up from 100 currently); ‘high-end subscribers’ accounting for 20 percent of its customer base in the next two to three years; and 45 percent of its customers using bundled mobile and fixed-line services in the same timeframe. Meanwhile, China Telecom said it will spend CNY39.2 billion on capex in 2009, a 19 percent drop on last year’s investment.