Key Takeaways From China Telecom’s 2016 Earnings

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China Telecom (NYSE:CHA), the third largest Chinese wireless carrier and largest wireline services provider published its Q4 and full year 2016 results on Tuesday. The company’s revenues grew by about about 1% year-over-year, despite currency headwinds (RMB down about 5% vs. the USD) as its data businesses did well. China Telecom’s 4G user base grew from 63.4 million to 122 million, while its fixed line broadband business also expanded, driven by higher fiber-to-the-home penetration. [1] However, the carrier’s earnings were impacted by higher tower leasing fees (included under network operations & support expenses) following the transfer of its tower assets to the China Tower JV and also due to currency headwinds. The carrier expects its 2017 capital expenditures to trend lower, to about RMB 89 billion ($12.9 billion), marking a decline of about 8% on a year-over-year basis, as it reduces spending on 4G and fiber broadband, amid increased resource sharing with China Unicom. Below, we take a look at some of the key metrics from China Telecom’s earnings release.

Trefis has a $60 price estimate for China Telecom, which is roughly 20% ahead of the current market price.

See our complete analysis of China MobileChina UnicomChina Telecom

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Notes:
  1. China Telecom Earnings Presentation []