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China Telecom signs up record broadband users

China Telecom Corp (中國電信), China’s biggest fixed-line phone company, added a record number of high-speed Internet users last month, helping it counter a loss in telephone subscribers.

China Telecom gained 890,000 broadband customers for a total of 40 million at the end of last month, the Beijing-based company said on its Web site yesterday. That was the highest number of monthly additions since the carrier started publishing the data last year.

Chairman Wang Xiaochu (王曉初) increased spending on broadband networks last year to attract customers in the world’s biggest Internet market. Web users in China topped 221 million in February, overtaking the US’ 220 million, Xinhua news agency said.

“China Telecom has upgraded the speed of its broadband networks and managed to persuade some users to sign more expensive packages,” said Tiffany Feng (馮丹丹), who rates China Telecom shares “accumulate” at Guotai Junan Securities Ltd (國泰君安證券) in Hong Kong.

Last month’s gain in customers was helped by the company’s acquisition of a unit in Beijing, she said.

China Telecom rose 2.6 percent to HK$4.37 (US$0.56) at the midday break in Hong Kong trading, compared with a 3.1 percent gain in the benchmark Hang Seng Index.

Average spending by China Telecom’s broadband Internet customers rose to 80 yuan (US$12) a month last year, compared with 77 yuan in 2006, the company said in March.

China Telecom increased spending on broadband and non-voice services 37 percent to 19.9 billion yuan last year, it said. In May, shareholders approved the phone carrier’s 5.56 billion yuan acquisition of a fixed-line and broadband unit in Beijing from parent China Telecommunications Corp (中國電信集團).

China Telecom said it lost 580,000 phone users last month, the 12th successive monthly decline, cutting its total subscribers to 214.9 million. Competition from wireless companies China Mobile Ltd (中國移動) and China Unicom Ltd (中國聯通), which have lowered prices and boosted network investment, has crimped demand for fixed-line services.

China Mobile said yesterday that it had gained 7.55 million wireless users last month for a total of 414.6 million. Last year it earned more than double the combined profit of its three biggest rivals.

Unicom added 1.1 million users for total of 171 million subscribers last year.

In May, China’s government said it would let the four major phone companies offer both fixed-line and wireless services after reorganizing their assets. Unicom will sell the smaller of its two wireless businesses to China Telecom, and merge its remaining operations with fixed-line carrier China Netcom Group Corp (中國網通集團).
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