First-half net income rose 2.6%to 11.6 billion yuan ($1.45 billion), or 0.14 yuan a share, from 11.3 billion yuan, or 0.14 yuan, a year earlier, the Beijing-based company said on Wednesday.
China Telecom has turned to high-speed Internet services and interactive television ventures to bolster earnings after cell-phone companies cut rates.
Chairman Wang Xiaochu, 48, has applied for one of three licences the government has said it will issue for third-generation wireless services, which allow faster downloads of music and video.
Increasing mobile substitution will affect the companys growth in fixed-line business going forward, said Mona Chung, who helps manage $800 million of stocks at Daiwa Asset Management Ltd. in Hong Kong including China Telecom shares.
If China Telecom is granted a mobile licence, itll provide some upswing to its earnings. Sales rose to 84.4 billion yuan from 80.6 billion yuan, the company said in a statement.
China Telecom was expected to post earnings of 11.9 billion yuan according to the median estimate of eight analysts in a Bloomberg survey.
The first-half profit margin fell to 13.7% from 14% a year earlier, the company. Earnings before interest, taxes, depreciation and goodwill amortisation rose 4% to 44.2 billion yuan, China Telecom said. We hope the government can make a decision on 3G as quickly as possible, Wang said in a briefing in Hong Kong on Wednesday.