China Telecom plans $12 billion network expansion

Sep 30, 2008 (Datamonitor via COMTEX) -- CHU | Quote | Chart | News | PowerRating -- China Telecom has announced plans to invest CNY80 billion ($11.69 billion) to upgrade the CDMA network acquired from China Unicom.

As part of the first phase of its network upgrade, the company plans to build new CDMA base stations, improve coverage, strengthen the indoor coverage of Fixed Mobile Convergence services, and increase mobile wireless internet speed over the next three years. The company also procured five million CDMA mobile phones recently as part of its preparation for its CDMA business.

During the first half of 2008, the company reported an 8% decline in net income to CNY12.67 billion ($1.85 billion) due to stiff competition from wireless carriers, and said its mobile services operation will require significant investment at the initial stage.

As part of the nationwide restructuring of the Chinese telecoms industry, the company acquired China Unicom's CDMA network assets, subscriber base, and business operations for an estimated $15 billion. The telecom restructuring has resulted in China Mobile, China Netcom (merger with China Unicom), and China Telecom competing with each other in the fixed and wireless services market. Last week, China Unicom announced plans to invest CNY30 billion ($4.41 billion) to expand its GSM network.

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