BEIJING (AP) — China Telecom, the country’s biggest fixed-line phone carrier, said Tuesday its 2008 profit tumbled 96 percent due to charges for shutting down an older mobile service.
Profit for the year through December was 884 million yuan ($129 million), or 0.01 yuan per share, down from 24.2 billion yuan, or 0.30 yuan per share in 2007, the Beijing-based company said. Annual revenue rose 3.2 percent to 186.8 billion yuan.
China Telecom recorded a 23.9 billion yuan ($3.5 billion) charge for shutting down its Personal Handyphone System, the company said. That came as it acquired a mobile phone network from rival China Unicom in a government-orchestrated industry overhaul.
The company warned earlier of a “significant decline” in profit but analysts were not expecting such a large drop.
The company also was hit by losses due to the earthquake that devastated China’s southwest last year and heavy winter snowstorms.
China Telecom has suffered from weak demand for fixed-line voice service as customers opt for mobile phones. It has responded by promoting high-speed Internet access, data transmission and other services.
The number of subscribers to China Telecom’s new mobile service rose by 2.7 million in the first two months of 2009 to a total of 30.6 million, the company said. By comparison, China’s biggest mobile carrier, China Mobile, says it has 457 million accounts.
“We are entering into the new era of full services integrated operations,” Chairman and CEO Wang Xiaochu said in a statement. “The next two to three years will be an important strategic opportunity for us.”