China Telecom H1 Revenue Falls 3.9% to RMB259.01 Billion; Net Profit Down 14.9%

China Telecom released its 2026 interim report on August 20. The report showed that in the first half of 2026, the company achieved operating revenue of RMB259.01 billion, down 3.9% year on year; net profit attributable to shareholders of the listed company was RMB19.588 billion, down 14.9% year on year. The board decided to continue distributing an interim dividend, with cash distribution accounting for 75% of shareholders' attributable profit for the first half, at RMB0.1606 per share (including tax), totaling approximately RMB14.696 billion.

In the first half of 2026, the telecommunications industry's telecom business revenue totaled RMB887.3 billion, down 2.1% year on year. China Telecom's operating revenue fell 3.9% year on year, mainly due to the industry's shift in old and new growth drivers and adjustments to value-added tax (VAT) categories. The company's main business revenue was RMB244.1 billion, remaining basically stable on a comparable basis excluding the impact of VAT category adjustments. Among this, communication revenue was RMB213 billion; smart business revenue was RMB31.1 billion, up 7.1% year on year, accounting for 12.8% of total, up 1.1 percentage points year on year.

In smart business, Tianyi Cloud revenue reached RMB61.8 billion, up 7.8% year on year; intelligent computing revenue grew 95.0% year on year; AIDC (artificial intelligence data center) revenue grew 9.3% year on year. The "Xirang" computing interconnection scheduling platform managed computing power exceeding 118.8 EFLOPS, with self-owned intelligent computing capacity reaching 70.8 EFLOPS and an intelligent computing utilization rate of 94%. The company's R&D expenses in the first half were RMB5.21 billion, up 8.9% year on year, focusing on cloud and cloud-network convergence, networks, artificial intelligence, quantum, and security.

In terms of cash flow, net cash flow from operating activities in the first half was RMB60.375 billion, up 28.4% year on year; free cash flow was RMB28.9 billion, up 121.3% year on year. Capital expenditure was RMB32.4 billion, used to accelerate the construction of the computing network.

In corporate governance, China Telecom held the second meeting of the ninth board of directors on August 20, reviewing and approving the 2026 interim report, interim profit distribution plan, and other proposals, and appointing Li Yunzhuang as executive vice president. Li Yunzhuang, aged 47, is a senior engineer with a master's degree in engineering. He previously served as deputy general manager of Tianyi Cloud Technology Co. , Ltd. , general manager of China Telecom Hainan Branch, and general manager of China Telecom Zhejiang Branch, and currently also serves as deputy general manager of China Telecom Group Co.

In terms of operating data, as of the end of the second quarter of 2026, the company had 442.43 million mobile users, with a net increase of 1.88 million in the quarter, of which 322.5 million were 5G network users, with a net increase of 8.37 million in the quarter; fixed-line broadband users reached 201.28 million. The penetration rate of 5G network users reached 72.9%, and 5G-A users reached 4.68 million; converged users exceeded 130 million, with converged ARPU (average revenue per user) reaching RMB128.