CHINA Telecom Corp reported yesterday a monthly decline in subscribers after cell phone carriers increased the number of users through the introduction of low fee packages.
China Telecom, the nation's biggest fixed-line telephone company, reported users fell by about 380,000 to 224.17 million at the end of August from a month earlier.
China Mobile, however, added 5.59 million subscribers in August for a total of 343.6 million, the world's No. 1 mobile carrier said in a separate release.
China Mobile's smaller rival China Unicom Ltd yesterday said that it gained 1.43 million customers in August, less than the previous month.
"The gap between fixed-line phone and mobile carriers will expand as mobile communication costs decrease," said Norson Telecom Consulting, a Beijing-based IT consulting firm, in a recent note.
China Telecom in July added 60,000 customers, the smallest number since the company started reporting monthly numbers in January 2006. The telco last month reported second-quarter profit that missed analyst estimates after users signed up for cheaper rates at mobile carriers. Sales rose 3.8 percent to 44.30 billion yuan (US$5.9 billion).
Second-quarter sales at Beijing-based China Mobile rose 23.5 percent to 88.9 billion yuan, according to figures derived by subtracting first-quarter results from first-half earnings.
"China Telecom should diversify its business to new areas like broadband and information services," Norson added.
China Telecom has deve- loped broadband services and the 114 service, which provide callers information on food, transport and entertainment. China Telecom charges related firms advertising fees on the 114 service.
"The telecommunications structure in China is unbalanced as China Mobile is No. 1, even bigger than the combined revenue of other players including China Telecom, China Unicom and China Netcom," Norson said.
The gap will be broken when the country issues 3G, or third generation, licenses, probably next year. China Telecom is expected to get one of the 3G licenses, industry insiders said.