1. How was the Company's performance in the first quarter of 2012?
The Company's operation was on track as planned for the first quarter of 2012. The operating revenues were RMB67,929 million, representing an increase of 15.7% from the same period of last year. The operating revenues excluding mobile terminal sales were RMB62,288 million, representing an increase of 12.0% from the same period of last year. Following the launch of iPhone 4S in the period, the Group made an appropriate increase in marketing initiatives for the profitable scale development of its mobile services, which is expected to significantly enhance its long term sustainable growth and value creation despite the short term pressure on its profitability. For the first quarter of 2012, the profit attributable to equity holders of the Company was RMB4,272 million, representing a decrease of 6.5% from the same period of last year. EBITDA (before CDMA network capacity lease fees) was RMB24,028 million, an increase of 0.9% from the same period of last year. EBITDA margin (EBITDA divided by the operating revenues excluding mobile terminal sales) was 38.6%.
2. How was the Company's mobile service performance in the first quarter of 2012?
For the first quarter of 2012, the mobile services continued to grow rapidly, demonstrating concurrent achievements in rapid expansion in mobile customer scale and revenues as well as progressive increase in subscriber market share. The number of mobile subscribers reached a total of 136 million, of which 43.55 million were 3G subscribers. The net addition of mobile subscribers was 9.36 million for the first quarter and the average mobile service revenue per user per month (ARPU) was around RMB51.7, which was primarily stable as compared to that for the full year of last year.
While we are achieving the scale development of our mobile subscriber base, with a firm foothold in the present and future, we vigorously promoted the transformation from voice-centric to data traffic operation and stand at the forefront for future development. We leveraged our "Cloud" computing service capability while proactively exploring and expanding the development into emerging services such as mobile payment and positioning services to enhance data traffic value.
3. What is the Company's development strategy?
In 2012, in order to grasp rapid growth opportunities of 3G services and accelerated adoption of smartphones and tackle the challenges brought by fierce competition in the existing mobile and broadband markets and the emerging of mobile Internet, the Company will continue to adhere to its "Customer-Focused Innovative Informatisation" strategy, steadily promote scale development and mobile data traffic operation through dual-leadership in innovation and services.
In particular, we will persistently optimise channel structure, deepen cooperation with quality open channel such as those sizable chain-store networks, and continue to improve channel sales capabilities. We will further promote the "Broadband China ĦE Fibre Cities" project to improve service quality and enrich content so as to maintain our competitive position in broadband services. Meanwhile, we will continue to enhance our service capability for centralised full services operation, and strengthen network optimisation, operation and maintenance, aiming at forging innovative and differentiated competitive edges while steadily promoting the transformation towards mobile Internet operation mode.
4. What is the Company's CAPEX plan?
In 2011, in order to promote the development and reinforce the leading edge of broadband services, the Company continued to increase the investment in broadband network construction, and increase the penetration rate of fibre access and broadband access speed. The Company emphasized investment effectiveness, optimised investment structure, and effectively controlled investments in wireline voice services and infrastructure. In 2011, capital expenditure of the Company was RMB49,551 million, an increase of 15.1% from RMB43,037 million in 2010. Of which, investment in broadband and Internet services was RMB33,121 million, accounting for 66.8% of the total capital expenditure, up by 2.6 percentage points from 2010.
For 2012, we budgeted the capital expenditure of RMB54 billion.
5. What is the dividend payout of the Company?
Taking into account the return to shareholders, the Company's cash flow and its capital requirements for planned acquisition of mobile network from parent company in 2012, the Board of Directors has decided to recommend at the forthcoming Annual General Meeting that a dividend being an equivalent of HK$0.085 per share be declared for the financial year 2011, which is the same as 2010.
updated 3rd May, 2012
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