BEIJING — China Telecom Ltd. said Tuesday that first-half profit rose 8 percent as its mobile phone business grew despite strong competition.

Profit for the six months ending June 30 was 9.8 billion yuan ($1.5 billion), or 0.12 yuan (1.8 U.S. cents) a share, the Beijing-based carrier said. Revenue rose 11.5 percent to 120.2 billion yuan ($18.8 billion).

Mobile phone revenue rose 28 percent to 18 billion yuan ($2.8 billion) despite competition from rivals China Mobile Ltd. and China Unicom Ltd. while revenue for traditional fixed-line services declined.

China Telecom was long the country's dominant phone carrier but fell behind China Mobile as customer demand shifted to wireless services. That prompted Beijing to restructure the industry into three groups in 2008, each with mobile and fixed-line assets, to revive competition and speed industry development.

The three rivals have focused on mobile phones and nontraditional services such as wireless Internet access to drive revenue growth as demand for traditional fixed-line services declines.

China Telecom said its number of mobile subscribers rose 19.7 percent over a year earlier to 108 million. The number of third-generation subscribers rose 75.3 percent to 21.5 million.

The company expects "valuable opportunities" from 3G service, chairman and CEO Wang Xiaochu said in a statement. But he acknowledged that "intensified competition" was creating "new challenges."

Revenue from fixed-line voice services fell 19.6 percent from the same period of 2010 and accounted for just 22 percent of total revenue.