What To Expect As China Telecom Publishes Its First Half Earnings

by Trefis Team
China Telecom
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China Telecom (NYSE:CHA), the third largest Chinese wireless carrier, is expected to publish its results for the first half of 2018 on August 20. Below we take a look at what to expect when the company publishes its earnings.

We have also created an interactive dashboard analysis on the outlook for China Telecom in 2018, which allows users to modify key drivers and arrive at their own valuation estimates for China Telecom.

The company has already published its subscriber figures for the first half of the year, indicating that it added about 32 million subscribers. In comparison, larger rivals China Mobile and China Unicom added just about 18.60 million and 18 subscribers, respectively, in the same period. China Telecom’s comparatively stronger growth is being driven by the carrier’s improving 4G coverage and its promotion of larger data traffic products, which are increasingly popular with subscribers. The carrier’s wireless ARPU should also see some improvement, as its 4G mix has been improving (~77% in Q2’18 up from just about 65% in the year-ago period). However, 4G-only ARPU could see some pressure, due to the government’s move to restrict data tariffs, although this could be partially offset by higher data consumption. Over Q1, the company’s handset data traffic more than doubled year-over-year to levels of around 2,178 MB per device.

We expect China Telecom’s landline operations to see continued declines, as users migrate to mobile and over-the-top voice services. However, other revenues such as Integrated Communication Technologies (ICT) and wireline broadband could trend higher. The company added about 7 million wireline broadband subscribers over H1, compared to 5 million in the year-ago period.

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