China Telecom Fourth-Quarter Profit Falls on Loss of Users

China Telecom, the nation's biggest fixed-line phone company, posted a 1.7 percent decline in fourth-quarter profit after losing subscribers.

Net income dropped to 5.26 billion yuan ($750 million) from a restated 5.35 billion yuan a year earlier, the Beijing-based company said in a statement on its Web site. Sales climbed to 44.1 billion yuan from 42.9 billion yuan.

China Telecom and smaller rival China Netcom Group lost phone users for at least six straight months last year as people switched to mobile services. The fixed-line companies may benefit from a planned revamp of the industry, in which the government may allocate them wireless assets to improve competition.

In 2007, the nation's subscriptions for wireless services rose 86.2 million, while fixed lines declined by 2.3 million, according to official data.

The fixed-line carriers have also both applied for licenses to provide third-generation mobile services. Last week, China Mobile, the world's biggest phone company by users, said it will start offering 3G services on a trial basis in eight of the nation's cities starting April 1.

China Telecom Chairman Wang Xiaochu countered the company's first annual loss in fixed-line phone users last year by boosting Internet sales.

The company added 1.33 million broadband subscribers in the first two months for a total of 37 million, compared with a loss of 2.24 million phone users in the same period. China Telecom's Web customers rose 26 percent last year to 35.7 million.