China Telecom Corp Ltd (NYSE:CHA) Q2 2020 Earnings Conference Call - Preliminary Transcript

Aug 18, 2020 • 12:30 am ET

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China Telecom Corp Ltd (NYSE:CHA) Q2 2020 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen. Good afternoon, ladies and gentlemen, on behalf of our management. I'd like to welcome all of you to join our 2020 Interim Results Media Conference Call. May I introduce our management attending the presentation today, Mr. Ke Ruiwen, Eecutive Director, Chairman and CEO, Mr. Li Zhengmao, Executive Director, President and COO, Mr. Shao Guanglu, Executive Director, Mr. Liu Guiqing, Executive Director and Executive Vice Presedent, Madam Zhu Min, Executive Director, Executive Vice Presedent, CFO, Mr. Wang Guoquan, Executive Director and Executive Vice President. Thank you for joining us and hope you find this presentation helpful. Now, welcome Mr. Ke Ruiwen, to walk us through our 2020 interim results.

Executive
Mr. Ke Ruiwen

Good afternoon, Media friends, for the sake of the epidemic control and prevention. This presentation is still conducted in the form of Conference call. Thank you for joining and for your care and support of the company. This presentation has 2 sections. I will provide an overview of first then Mr. Li Zhengmao, will go through the business review and financial performance.

We have 6 key development highlights in the first half of 2020. One, proactively tackle challenges and seed ceased new opportunities to maintain solid results. Two, 5G promising start enhanced both subscale embedded. Three, smartphone [Indecipherable] with propane value we stored. Four, industrial digitalization [Indecipherable] new potential fueling future development. Five, consolidate cloud network integration edge and develop digitalized platform capabilities. Six, promo codification and digital transformation for high quality development.

In the first half, the company proactively responded to the challenges to the operations, the epidemic cost fully ceased the new informatization demand into society expedited 5G scale commercialization expanded integrated information services and proactively promoted profitable scale development leading to monthly improvement of operating results to a solid and stable one. Our revenue and profit growth maintained of which service revenue was renminbi [Phonetic] 187.1 billion up to from 5% YoY.

EBITDA and EBITDA margin were generally stable. Net profit also maintain stable at renminbi 13.9 billion. Our operations in the first quarter was impacted by the epidemic. But then major KPIs rebounded in the second quarter as the epidemic was quite fully under control. In particular surface revenue worldwide grew substantially increased from 0.7% in Q1 to 4.3% in Q2. Net profit growth achieved turnaround from negative 2.2% in Q1 to 2.2% in Q2. Mobile service revenue of 2.0% QoQ. Broadband Access Western heels of 4.9% QoQ and industrial digitalization revenue of 3.9% QoQ.

While striving to foster operating results rebound, we also continued to place high importance on service quality achieving industry leading offer satisfaction. Our 5G business momentum remained robust skill development achieved solid results with 5G package subs, reaching 37.84 million and industry leading penetration rate of 11%. 5G ARPU was renminbi 80.6 and there is around 10% of ARPU uplift in 4G upgrading to 5G demonstrating user value.

We continued to enrich 5G to see content. We have over 1,000 ultra HD and via video content, hundreds of cloud