News from the 2008 work conference reports of China Telecom (CHA) and China Netcom is that China Telecom achieved a net profit of CNY26.6 billion in 2007, while China Netcom basically reached its expected results during the period.
China Telecom's report shows that the company's income from its main business communications reached CNY177.1 billion in 2007, which was a slight increase of 2.4% compared with that of the previous year. In the meantime, the company's net profit reached CNY26.6 billion, increasing by 1.9%. However, due to the adoption of one-way charging by mobile service providers, China Telecom lost a total of 2.74 million users in the first eleven months of last year.
Zuo Xunsheng, president of China Netcom, summarized the company's performance in 2007 by saying that they basically reached their expected goals for the year. China Netcom's meeting report shows that the company's main income in the 21 provinces in southern China was CNY10.405 billion and suffered a net loss of CNY2.61 billion, which was at the same level with that of 2006.
Besides the implementation of one-way charging by mobile operators, the user loss of both China Telecom and China Netcom was reportedly also because of a cooperation agreement previously signed between the parties in which they agreed that China Netcom would not develop new users in southern China, and China Telecom would not increase users in the northern market.