An Internet fortune for China Netcom?
China Netcom Group, the nation's second-largest fixed-line telephone company, posted an unexpected increase in full-year profit after signing up more Internet customers.
Net income last year rose to 10.58 billion yuan ($1.5 billion), from 10.55 billion yuan, in 2006, the Hong Kong-listed company said. Sales gained to 82.5 billion yuan from a restated 81.8 billion yuan. The average of 24 analysts' estimates compiled by Bloomberg was for profit of 9.87 billion yuan.
Netcom's gains from Internet users offset declining revenue from phone calls as mobile carriers lured customers by cutting rates. The company increased its online subscribers by 31 percent to 19.8 million last year, while revenue from the service rose 40 percent to 13.8 billion yuan.
“In 2007, the substitution of fixed-line voice services by mobile voice services accelerated,” Zuo Xunsheng, Netcom's chief executive officer, said in a statement to the Hong Kong stock exchange. The increasing use of Internet by all sectors of the public is accelerating. Access to the Internet is increasingly regarded not as a luxury but a household necessity,” he said.
China's fixed-line subscriptions fell last year for the first time, dropping by 2.3 million, according to data from the Ministry of Information Ministry. The country's mobile-phone users rose
86.2 million, more than the population of Germany, in 2007.
Netcom had its first annual decline in subscribers after grappling with the growing dominance of China Mobile, which reported a 32 percent profit gain and widened its lead as the world's largest phone company by users.
Bigger rival China Telecom may say profit rose 6 percent to 23.5 billion yuan when it reports results on March 31, according to the average of 29 analysts' estimates compiled by Bloomberg.
“The gap between mobile and fixed-line operators is widening further as the mobile operators lower tariffs,” said Marvin Lo, an analyst at Daiwa Institute of Research in Hong Kong.
China Netcom shares climbed 10 percent in Hong Kong to HK$21.80 at the end of trading. The stock has fallen 7 percent this year, compared with a 19 percent drop in the benchmark Hang Seng Index.
Netcom, which dominates the fixed-line market in China's northern provinces, lost 3.2 million phone customers last year for a total of 110.8 million.
China Netcom plans to pay a 2007 dividend of 59.3 Hong Kong cents, compared with 55.3 Hong Kong cents a year earlier, it said in the statement.
The government plans to reorganize its telecommunications industry to promote competitors to China Mobile, whose 384.4 million customers exceed the country's total number of fixed-line subscriptions.
China plans to reduce the number of telecoms groups in the country to three from six, the Shanghai Securities News reported, citing Shi Wei, a researcher at the National Development and Reform Commission, the country's economic planning agency.
The government may order China Unicom, the nation's second-largest mobile operator, to sell its larger phone network to Netcom, analysts at UBS AG, Morgan Stanley and Goldman Sachs Group Inc. project. Unicom may sell its smaller network to China Telecom, while the parent of China Mobile may acquire fixed-line operator China Tietong Telecommunications, according to the analysts.
“We have not received any formal news about an industry restructuring,” Chairman Zhang Chunjiang said in a briefing in Hong Kong.
The company expects to be able to offer both fixed and mobile services within the next five years, Zhang said, reiterating Netcom had applied for a mobile license.
China Telecom stock jumped 9 percent in Hong Kong trading, while China Mobile gained 8 percent and Unicom shares surged 9.8 percent. The Hang Seng Index rose 6.4 percent.
Chairman Zhang reiterated the company is keen to sell yuan- denominated shares on the mainland and there is no timetable set.
Netcom expects to invest 19.6 billion yuan this year on network and equipment, a drop of 5.2 percent from 2007's 20.7 billion yuan, Li Fushen, chief financial officer, said.
What kind of consolidation will happen in China’s telecom industry?
Net income last year rose to 10.58 billion yuan ($1.5 billion), from 10.55 billion yuan, in 2006, the Hong Kong-listed company said. Sales gained to 82.5 billion yuan from a restated 81.8 billion yuan. The average of 24 analysts' estimates compiled by Bloomberg was for profit of 9.87 billion yuan.
Netcom's gains from Internet users offset declining revenue from phone calls as mobile carriers lured customers by cutting rates. The company increased its online subscribers by 31 percent to 19.8 million last year, while revenue from the service rose 40 percent to 13.8 billion yuan.
“In 2007, the substitution of fixed-line voice services by mobile voice services accelerated,” Zuo Xunsheng, Netcom's chief executive officer, said in a statement to the Hong Kong stock exchange. The increasing use of Internet by all sectors of the public is accelerating. Access to the Internet is increasingly regarded not as a luxury but a household necessity,” he said.
China's fixed-line subscriptions fell last year for the first time, dropping by 2.3 million, according to data from the Ministry of Information Ministry. The country's mobile-phone users rose
86.2 million, more than the population of Germany, in 2007.
Netcom had its first annual decline in subscribers after grappling with the growing dominance of China Mobile, which reported a 32 percent profit gain and widened its lead as the world's largest phone company by users.
Bigger rival China Telecom may say profit rose 6 percent to 23.5 billion yuan when it reports results on March 31, according to the average of 29 analysts' estimates compiled by Bloomberg.
“The gap between mobile and fixed-line operators is widening further as the mobile operators lower tariffs,” said Marvin Lo, an analyst at Daiwa Institute of Research in Hong Kong.
China Netcom shares climbed 10 percent in Hong Kong to HK$21.80 at the end of trading. The stock has fallen 7 percent this year, compared with a 19 percent drop in the benchmark Hang Seng Index.
Netcom, which dominates the fixed-line market in China's northern provinces, lost 3.2 million phone customers last year for a total of 110.8 million.
China Netcom plans to pay a 2007 dividend of 59.3 Hong Kong cents, compared with 55.3 Hong Kong cents a year earlier, it said in the statement.
The government plans to reorganize its telecommunications industry to promote competitors to China Mobile, whose 384.4 million customers exceed the country's total number of fixed-line subscriptions.
China plans to reduce the number of telecoms groups in the country to three from six, the Shanghai Securities News reported, citing Shi Wei, a researcher at the National Development and Reform Commission, the country's economic planning agency.
The government may order China Unicom, the nation's second-largest mobile operator, to sell its larger phone network to Netcom, analysts at UBS AG, Morgan Stanley and Goldman Sachs Group Inc. project. Unicom may sell its smaller network to China Telecom, while the parent of China Mobile may acquire fixed-line operator China Tietong Telecommunications, according to the analysts.
“We have not received any formal news about an industry restructuring,” Chairman Zhang Chunjiang said in a briefing in Hong Kong.
The company expects to be able to offer both fixed and mobile services within the next five years, Zhang said, reiterating Netcom had applied for a mobile license.
China Telecom stock jumped 9 percent in Hong Kong trading, while China Mobile gained 8 percent and Unicom shares surged 9.8 percent. The Hang Seng Index rose 6.4 percent.
Chairman Zhang reiterated the company is keen to sell yuan- denominated shares on the mainland and there is no timetable set.
Netcom expects to invest 19.6 billion yuan this year on network and equipment, a drop of 5.2 percent from 2007's 20.7 billion yuan, Li Fushen, chief financial officer, said.
What kind of consolidation will happen in China’s telecom industry?
posted by Charltonmedia.com @ 2:42 AM
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