China Telecom:Sees Big Rev Increase From Broadband,Mobile"

HONG KONG (Dow Jones)--China Telecom Corp. (CHA) said Wednesday it expects mobile and broadband operations to be as important as its core fixed-line business in ten years' time.

Wang Xiaochu, chairman of the listed unit of China's largest fixed-line operator, said the company expects broadband, mobile and fixed-line operations to each contribute a third of its revenue by that time.

Wang made the comments after the company's annual general meeting in Hong Kong, the first one it has held in the territory and a rarity among H-share companies.

H-share companies are mainland-registered companies that trade in Hong Kong. They usually hold their shareholder meetings in mainland China.

China Telecom currently doesn't have any mobile services, but it offers a localized wireless service known as Personal Handyphone System, or Xiaolingtong.

Internet services, mainly broadband, contributed 9% of the company's total revenue in 2004. Local telephone services, including fixed-line, phone booths and Xiaolingtong, took up half of total revenue.

Wang said he expects broadband subscriber growth this year to exceed last year's, when new additions reached 6.6 million.

At the end of March, China Telecom had 15.7 million broadband customers.

Wang said the company's Internet Protocol Television service, which began a trial run late last year, has about 40,000 users. The service is now available in Shanghai and several main cities in Guangdong province.

IPTV sends digital broadcasts through a telephone or cable line via a broadband connection. Because it uses the same technology as the Internet, IPTV offers more value-added services than conventional TV such as interactivity between broadcaster and viewer, and has potentially vast storage and broadcast space.

Wang said China Telecom will focus on offering more interactive services such as gaming and educational content in its broadband TV operations.

"We find that interactive services are more welcome. It would be difficult to satisfy customers' needs just by broadcasting programs," Wang said.

Wang said China Telecom will eventually seek to bring in foreign strategic investors to the company, to benefit from international management experience.

However, the plan isn't high on the company's list of priorities, Wang said, and he didn't provide a timeframe for introducing such investors.

-By Julie Wang, Dow Jones Newswires; (852) 2802-7002; julie.wang@dowjones.com

-Edited by David Riordan

(END) Dow Jones Newswires"

Posted to the site on 25th May 2005