Interim Report 2024

CONTENTS
002 Important Notice003 Section I Definitions
005 Section II Company Profile
006 Section III Management’s Discussion and Analysis
030 Section IV Corporate Governance Report
035 Section V Environmental and Social Responsibilities
037 Section VI Significant Events
042 Section VII Changes in Shares and Information on Shareholders
046 Section VIII Interim Financial Information
046 Condensed Consolidated Statement of Financial Position (Unaudited)
048 Condensed Consolidated Statement of Comprehensive Income (Unaudited)
050 Condensed Consolidated Statement of Changes in Equity (Unaudited)
051 Condensed Consolidated Statement of Cash Flows (Unaudited)
054 Notes to the Unaudited Condensed Consolidated Interim Financial Information

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China Telecom Corporation Limited Interim Report 2024

IMPORTANT NOTICE

1.

2.

The unaudited condensed consolidated interim
financial information for the six-month period
ended 30 June 2024 of the Company is preparedin accordance with the International AccountingStandard 34. The condensed consolidated interim
financial information in this report is unaudited.
The profit distribution proposal or proposal for
conversion of capital reserve into share capital for theReporting Period approved by the Board

After fully considering the returns to shareholders, theCompany’s profitability, cash flow level and capital needs
for future development, the thirteenth meeting of theeighth session of the Board of the Company decided to
distribute the interim dividend for 2024 to all shareholders
in the aggregate amount of RMB15.29 billion, representing
over 70% of the profit attributable to equity holders of theCompany in the amount of RMB21.81 billion. Based on
the total share capital registered on the record date forthe dividend distribution, and based on the Company’s
total share capital of 91,507,138,699 shares as at 30 June
2024, a dividend of RMB0.1671 per share (equivalent toHK$0.182289) (pre-tax) was declared and will be paid to allshareholders. In case of any change in the total number
of issued share capital of the Company before the record
date for the implementation of the dividend distribution, thetotal distribution amount will remain unchanged, and the
distribution amount per share will be adjusted accordingly.
The Board has been authorised by shareholders at theannual general meeting for the year 2023 to decide on
the profit distribution proposal and the resolution for the
proposed interim dividend was considered and approved at
the thirteenth meeting of the eighth session of the Board of
the Company on 20 August 2024.

3.

Risk Statement of Forward-Looking Statements

Forward-looking statements, such as development
strategies, future business plans and prospects, containedin the 2024 interim report of the Company do not constitutea commitment of the Company to investors. These forwardlooking statements are subject to known and unknown
risks, uncertainties and other factors which may cause
the Company’s actual performance, financial condition
or results of operations to be materially different fromany future performance, financial condition or results ofoperations implied by such forward-looking statements. In
addition, the Company will not update these forward-looking
statements. Investors should be aware of the investment
risks.
4.

Significant Risk Warning

The Company has described in detail the economic andpolicy environment adaptation risks, sci-tech and innovation
risks, network and data security risks, risks relating toemerging businesses in strategic emerging industries andfuture industries and international business operationalrisks in this report. Please refer to “Management’s
Discussion and Analysis” in this report.

Interim Report 2024 China Telecom Corporation Limited

003

SECTION I DEFINITIONSIn this report, unless the context otherwise requires, the following terms and expressions have the following meanings:
4G

4th generation mobile communication technology

5G

5th generation mobile communication technology

5G-A

5G-Advanced, i.e., evolved technology of 5th generation mobile communication

AIDC

Artificial Intelligence Datacentre

ARPU

Monthly average revenue per user

Artificial Intelligence/AI

Technology science that researches and develops theories, methodologies,
technologies and application systems for simulating, extending and expanding human
intelligence

A Share(s)Shares of the Company issued in mainland China, listed on domestic stock exchanges
and subscribed and traded in RMB

Big Data

Massive, real-time and diversified data information that can be recorded, collected,
developed and utilised, and big data-based mining and processing technology

Board/Board of Directors

The board of directors of the Company

CHBG

Customer, Home, Business, Government

China Telecom/the Company

China Telecom Corporation Limited (中國電信股份有限公司), a joint stock limited
company incorporated in the People’s Republic of China with limited liability, or
where the context so requires, refers to China Telecom Corporation Limited and its
subsidiaries

China Telecom Digital Intelligence
Technology

China Telecom Digital Intelligence Technology Co., Ltd. (中電信數智科技有限公司)

China Telecom Finance

China Telecom Group Finance Co., Ltd. (中國電信集團財務有限公司)

China Telecom Global

China Telecom Global Limited (中國電信國際有限公司)

China Telecommunications

China Telecommunications Corporation (中國電信集團有限公司), formerly known
as China Telecommunications Corporation (中國電信集團公司), the controllingshareholder of the Company

China Tower

China Tower Corporation Limited (中國鐵塔股份有限公司)

Cloud/Cloud Computing

An Internet technology that provides flexible and on-demand services to external users
through the Internet with pooled cluster computing capabilities

Computing PowerThe ability of computer equipment or computing/data centres for processing
information, i.e., the ability of computer hardware and software to cooperate toperform certain computing needs

EFLOPSFLOPS, Floating-Point Operations Per Second, which is commonly used to estimate
computer performance; “E” stands for “Exa” and means 1018; therefore EFLOPS
implies 1018 times of floating-point operations per second

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China Telecom Corporation Limited Interim Report 2024

SECTION I DEFINITIONSFTTRFiber to The RoomThe Group

The Company and its subsidiaries

Guangdong Rising

Guangdong Rising Holdings Group Co., Ltd. (廣東省廣晟控股集團有限公司), formerly
known as Guangdong Rising Assets Management Co., Ltd. (廣東省廣晟資產經營有限公司)

H Share(s)Shares of the Company that are registered in mainland China, issued outside
mainland China, listed on the Stock Exchange and subscribed and traded in Hong
Kong dollars

IFRS Accounting Standards

IFRS Accounting Standards, amendments and interpretations issued from time totime by the International Accounting Standards Board

Internet of Things/IoT

Various sensory devices that are based on computer and communication technology,
using cellular mobile network, wired network, wireless network, etc. to complete thetransmission, coordination and processing of information, so as to realise the networkof communication between objects and things, and communication between objects
and people

Listing Rules

The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
LimitedMIIT

Ministry of Industry and Information Technology

NICES

The 5-in-1 integrated solution which covers Network capabilities, Intelligencecapabilities, Cloud computing capabilities, Elements capabilities and Service
capabilities

PON

Passive Optical Network

QKD

Quantum Key Distribution, which refers to the remote key distribution leveraging thephysical properties of quantum such as indivisibility, non-replication, and uncertainty

Quantum-encrypted Calls andMessages

The communication technology that is closely integrated with quantum information
technology to achieve end-to-end voice calls and other encryption protection, andprovide users with stable and reliable quantum protection secure communication
services

RedcapLightweight 5G cellular IoT technology

RDO

Fundamental research (R), applied technological research and development (D) andoperational development (O)Reporting Period

Period from 1 January 2024 to 30 June 2024

SSE

Shanghai Stock Exchange

Stock Exchange/Hong Kong Stock
Exchange/HKSE

The Stock Exchange of Hong Kong Limited

Interim Report 2024 China Telecom Corporation Limited

005

SECTION II COMPANY PROFILE

1. CORPORATE INFORMATION
Company name in Chinese

中國電信股份有限公司

Short name in Chinese

中國電信Company name in English

China Telecom Corporation Limited

Short name in English

China Telecom

Legal representative of the Company

Ke Ruiwen

2. CONTACT PERSONS AND CONTACT INFORMATION
Secretary of
the Board

Securities Affairs
Representative

Company SecretaryName

Li Yinghui

Xu FeiWong Yuk Har

Address

31 Jinrong Street,
Xicheng District,
Beijing, China

31 Jinrong Street,
Xicheng District,
Beijing, China

28th Floor, Everbright Centre,
108 Gloucester Road,
Wanchai, Hong Kong

Telephone

8610-58501508

8610-58501508

852-28779777

Fax

8610-58501531

8610-58501531

852-28770988

E-mailir@chinatelecom-h.com

ir@chinatelecom-h.com

ir@chinatelecom-h.com

3. GENERAL INFORMATION
Registered address and office address of the Company

31 Jinrong Street, Xicheng District, Beijing, China

Postal code of the office address of the Company

100033

Principal place of business in Hong Kong

28th Floor, Everbright Centre, 108 Gloucester Road,
Wanchai, Hong Kong

Company website

www.chinatelecom-h.com

E-mailir@chinatelecom-h.com

4. STOCK INFORMATIONClass of shares

Stock exchange for listing

Stock short name

Stock code

A SharesShanghai Stock Exchange

China Telecom

601728

H SharesHong Kong Stock Exchange China Telecom

00728

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China Telecom Corporation Limited Interim Report 2024

SECTION III MANAGEMENT’SDISCUSSION AND ANALYSIS

1. DESCRIPTION OF THE
COMPANY’S INDUSTRY AND MAIN
BUSINESS DURING THE REPORTING
PERIOD
According to the “Report of the Performance of theCommunications Industry Economy in the First Half of 2024 ”
released by the MIIT, in the first half of 2024, the overall
operation of the communications industry was stable,
and the cumulative revenues from telecommunications
services amounted to RMB894.1 billion, representing
a year-on-year increase of 3%. The three fundamental
telecommunications enterprises proactively developed
emerging businesses such as IPTV, Internet datacentres,
Big Data, cloud computing and IoT, with service revenues
reaching RMB227.9 billion, representing a year-on-year
growth of 11.4%. As of the end of June 2024, the total
number of mobile phone users of three fundamental
telecommunications enterprises and China Broadcasting
Network reached 1,777 million, among which, 5G mobile
phone users reached 927 million, representing a net
addition of 105 million compared with the end of last year.
The total number of mobile phone base stations in Chinareached 11.88 million, with the total number of 5G basestations reaching 3.917 million, a net increase of 540,000
compared with the end of last year.
Insisting on driving forces from dual engines of fundamental
and Industrial Digitalisation businesses, the Company
accelerated the development of strategic emerging
businesses and further enhanced the digital, intelligent
and green product and service capabilities. The Company
continued to promote the transformation and upgrades offundamental businesses. The Company further optimised
5G network coverage and service quality and strengthened

the innovation and promotion of 5G applications throughAI empowerment. The Company further advanced
FTTR upgrades and the expansion of Gigabit broadband
applications, continued to enrich Smart Family
applications and privileges and developed green products
to support a better low-carbon new life. The Company
further strengthened the expansion of CHBG integrated
applications such as Digital Village, Smart Community andInternet of Video Things (IoVT), accelerated the AI upgradesof platforms and content enrichment and expanded thedigital platform business and the scale of fundamental
connectivity. The Company further promoted the rapid
development of Industrial Digitalisation business. The
Company strengthened the technological research anddevelopment (R&D) and capability innovation for digitalplatforms and developed more than 110 core platforms
to empower the digital transformation and upgrades atscale for customers from over 10 key industries such as
government administration, industry, education, healthcare
and finance. The Company continued to speed up thescale development of strategic emerging businesses.
Focusing on seven strategic emerging businesses including
cloud computing and computing power, new generation
information communications, Big Data, AI, security,
quantum and digital platform, the Company sped up thecultivation and development of new quality productive forces
and fully promoted the development of key products such as
Cloud Computers, Quantum-encrypted Calls and Messages,
IoVT and Mobile Phones with Direct Satellites Connection,with dual emphasis on quantity and quality. The Company
also deepened deployment and proactively accelerated thein-depth integration of “network + cloud + AI + applications”
with traditional industries and further creating new
momentum and edges for the high-quality operation anddevelopment of the Company.

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SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

In the first half of 2024, the Company’s operating revenues
amounted to RMB268.0 billion, representing an increase of
2.8% year-on-year. Of which, service revenues amounted
to RMB246.2 billion, representing an increase of 4.3%
year-on-year, remaining above the industry’s growth rate1.
The Company’s mobile communications service revenues
maintained favourable growth, amounting to RMB105.2
billion, representing an increase of 3.6% year-on-year. Of
which, revenues from mobile value-added and applications
amounted to RMB18.1 billion, representing an increase of
17.1% year-on-year. The penetration rate of 5G network
users increased by 14.3 p.p., and mobile ARPU2 reached
RMB46.3. Wireline and Smart Family service revenues
amounted to RMB64.0 billion, representing an increaseof 3.2% year-on-year. Of which, revenue from Smart
Family business reached RMB10.7 billion, representing an
increase of 14.4% year-on-year. Broadband blended ARPU3
reached RMB48.3. Industrial Digitalisation maintained its
rapid development momentum, with its revenue amounting
to RMB73.7 billion, representing a year-on-year growth of
7.2%.

2. ANALYSIS OF THE CORE
COMPETITIVENESS DURING THE
REPORTING PERIOD
During the reporting period, China Telecom resolutely
fulfilled its responsibilities in building Cyberpower andDigital China, as well as safeguarding network andinformation security, further deepened the implementationof its Cloudification and Digital Transformation strategy,
comprehensively deepened reforms and opening up andaccelerated the development of new quality productive
forces in light of its own conditions. The Company strove todevelop itself into an enterprise with “three orientations”,
further strengthened its core functions and enhanced its
core competitiveness and achieved new results in highquality development.

For detailed business analysis of the Company, pleaserefer to “3. Chairman’s Statement” under “Section III
Management’s Discussion and Analysis” of this report.

1
2
3

According to the performance of the communications industry economy in the first half of 2024 released by MIIT.
Mobile ARPU = monthly average revenues from mobile services/the average number of mobile subscribers.
Broadband blended ARPU = monthly average revenues from broadband access and Smart Family/the average number of broadband subscribers.

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China Telecom Corporation Limited Interim Report 2024

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Further strengthened digital information
infrastructure
Insisting on “network as the foundation and cloud as
the core, while grasping the development directionof intelligence”, the Company continued to promote
the evolution and upgrades of the digital information
infrastructure. The Company further deepened co-building
and co-sharing to build a high-quality network with high-/
mid-/low-band coordination as well as 5G/4G integration.
The number of 5G base stations exceeded 1.31 million.
The 5G network achieved contiguous coverage in areasof townships and above across the country. The Company
continued to strengthen the strategic deployment of
5G-A, promoted the upgrade of 5G-A capabilities on all
fronts and jointly completed the large-scale deployment
of Redcap and carrier aggregation in more than 100
cities. The Company built computing infrastructure withcloud-intelligence integration and training-inferencing
integration, completed the construction of domesticallyleading all liquid-cooling pools with ten-thousand GPUs in
Beijing-Tianjin-Hebei and the Yangtze River Delta, which
already undertook training tasks for large models at thetrillion parameter level. The Company deployed inferencing
pools in 31 provinces to meet the inferencing demands
from various AI applications. Intelligent computing
power reached 21 EFLOPS. The Company promoted
the comprehensive upgrade of datacentres to AIDC andachieved agile delivery of cabinets, elastic supply of coolingand power, as well as efficient energy use. The Company
established the leading integrated intelligent computing
service capabilities, “Xirang”, to offer supreme computing
power scheduling services, highly efficient integrated
computing acceleration services and inclusive one-stop
intelligent computing services, as well as a thriving model
application ecosystem. The Company pushed forward thedeployment of proprietary intelligent computing powerwith a hierarchical approach. The Company fully upgraded
China Telecom Cloud products and ecological matrix, with

China Telecom Cloud entering into the new development
stage of intelligent cloud. Focusing on areas where AI
industry concentrates with abundant computing powerand clean energy, the Company built computing powerinterconnection networks with high throughput and low
latency, which are also intelligent, inclusive and easy-touse. The Company continued to optimise the latency circles
with the latency of 1ms within cities, 5ms for intra-region
and 20ms for inter-regions to consolidate the foundation
for computing power connection. The Company built the
400Gbps all-fibre high-speed network which supports
elastic bandwidth and time slicing. The Company has
exclusive capabilities of quantum-encrypted dedicated lines
within the industry to fulfil the demands for secure, elastic
and inclusive transmissions in the era of AI. The numberof 10G PON ports of Gigabit fibre network exceeded 9
million, with a coverage of 94% of residential areas in cities
and towns. The Company carried out the deployment of
50G PON network to support the demands for 10-Gigabit
access in locations such as key subdistricts, industrial
parks and factories. The Company’s cloud-network
operation capabilities continued to be strengthened andboth the amount of network-wide fault work orders andthe processing time have been reduced. The Company also
promoted the automation of cloud-network operation, fully
accelerated the creation and application of large model for
network, and steadily enhanced the automatic processing
rate in cloud-network operation and maintenance. The
Company took different measures at the same time tofurther strengthen the green upgrade of cloud-network
infrastructure, established green datacentres in an allround way and accelerated the green transformation of
traditional communications buildings. 12 datacentresof the Company were newly rated as the national green
datacentres. The Company further promoted AI intelligent
energy-saving and green transformation for facility rooms
and base stations, with an AI energy-saving coverage rateof 96% among all 5G/4G base stations. The annualised
energy-saving in total exceeded 1 billion kWh.

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SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Product application capabilities entering a
new stage
Insisting on the customer-oriented approach, the Company
accelerated the integration of new elements such as
cloud, artificial intelligence (AI), quantum and satellite into
standard products, to further enhance product capabilities,business value and service level. The Company sped up
the enrichment of contents and intelligent upgrades ofplatforms with a focus on the integrated CHBG scenes
to expand the digital platform business and the scale offundamental connectivity, with an aim to promote thebuilding of a service-oriented enterprise on all fronts. For
individual customers, the Company further promoted theinnovation of 5G applications and personal terminals. In
terms of applications, the Company accelerated the AI
upgrade of applications such as Communications Assistant,
Colour Ringback Tone with Video and China Telecom Cloud
Drive. The Company also stepped up the scale expansion ofdifferentiated businesses such as Quantum-encrypted Calls
and Messages and Mobile Phones with Direct Satellites
Connection, and rolled out the world’s first Cars with Direct
Satellites Connection service. In terms of handsets, theCompany launched the first AI phone that is customised by
an operator and embedded with proprietary large models
to fulfil individual customers’ demands for intelligent
and convenient communications services. For household
customers, the Company further advanced FTTR upgrades
and the expansion of Gigabit broadband applications.
The Company continuously promoted the AI upgradesof devices such as cloud computer and home monitor incloud and further strengthened the AI upgrades as wellas integration and mutual promotion of platforms such as
Smart Family, Smart Community, Digital Village and IoVT.
The Company further enriched family applications andcontinued to enhance service capabilities. The Company

created the living and service circles for communities/
villages, to fulfil household customers’ scene-based
demands for “safe home, low-carbon home and intelligent
home”. For government and enterprise customers, theCompany fulfilled the demands for digitalisation fromthousands of industries leveraging “network + cloud + AI +applications” and promoted in-depth integration between
digital economy and real economy. The Company pushedforward the upgrade of the 5G NICES Pro+ integrated
product portfolio. Through 5G definitive network andproprietary industrial PON, network construction andoperating costs were significantly reduced for customers
from the new industrialisation sector. e-Surfing Internetof Things (IoT) platform supports secure and reliable
access of ultra-large scale terminals at the hundredmillion level, as well as online sensing and control of IoT
network connectivity at the billion level, with the numberof terminal users exceeding 600 million. The Company
catalysed the launch of AI applications. Xingchen large
model for government administration hotline significantly
enhanced operating efficiency and citizens perception of the
hotline for people’s livelihood. “Xingchen Smart Answers”
realised the upgrade to intelligent interaction through SMS,
which allowed large model services to reach thousands offamilies more conveniently. Benchmark use cases of IoVT
such as Kitchen Monitoring and City Brain empowered thedevelopment of smart city, with accelerating scene-based
replication and promotion. The Company intensified its
efforts in research and development iteration and capability
innovation of core digital platforms, continued to upgrade
the capabilities of more than 110 digital platforms such as
municipal grassroots governance platform and all-domain
tourism platforms, and further empowered customers’
digital transformation and upgrades in more than 10 key
industries such as government administration, industry,
education, healthcare and finance.

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China Telecom Corporation Limited Interim Report 2024

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Achieved new breakthroughs in sci-techinnovation
The Company further intensified its efforts to achieve
breakthroughs in key core technologies and sped up thedevelopment of new quality productive forces with a focus
on four technological directions, namely network, cloudand cloud-network integration, AI and quantum/security.
The Company fully completed the deployment of scitech innovation and R&D system RDO, optimised the
R&D organisational system and continued to strengthen
fundamental research. The Company also optimised thebuilding of sci-tech innovation demonstration bases andaccelerated the launch of sci-tech achievements. The
Company further increased the input of sci-tech innovation
and R&D, with R&D expenses increasing by 12.5% yearon-year. Focusing on strategic emerging industries,
the Company accelerated the building of core scientificresearch teams comprising of top talents, with the numberof R&D personnel increasing by 15.3% over the end oflast year. The flying geese paradigm of technologicalexperts and talents, comprising of scientists, chief experts,
senior experts, and experts, has basically taken shape,with its scale exceeding 10,000 persons. The Company
attained breakthroughs in core technologies and released
6G intelligent and simple network architecture and 6G
sci-tech innovation experimental apparatus. “Xirang”
platform achieved breakthroughs in core technologies ofmanaging and scheduling ten-thousand GPUs in public
cloud, and completed the industry’s first verificationof over 100-kilometre distributed lossless intelligent

computing interconnection on existing network. In addition,
the Company launched the industry’s first large speechmodel that supports code switching of 40 dialects, anddeveloped the first quantum security encryption system
integrating QKD in China. The Company also upgraded
the leading “Tianyan” quantum computing cloud platform.
The Company was approved to be the source of originaltechnologies for a number of cutting-edge technologies.
The Company took the lead in creating innovation platforms
such as cloud computing, quantum communications andnext generation optical network innovation consortium.
Two projects were awarded the first prize of the National
Science and Technology Progress Award 2023 and were
included in the list of outstanding enterprises of sci-techinnovation among state-owned central enterprises in
2023. Furthermore, the Company vigorously promoted theconversion of sci-tech achievements, with achievementson its proprietary list increasing by 40.4% year-on-year.
The proportion of proprietary IT systems and businessplatforms reached 50.4%. The Company leveraged scitech innovation to promote industrial innovation, andfully completed deployment in seven strategic emerging
businesses including cloud computing and computing
power, new generation information communications,
Big Data, AI, security, quantum and digital platform. The
Company further strengthened external empowerment
and internal applications, accelerated the cultivation of new
growth areas, effectively supported the enhancement ofcorporate operating efficiency, and continued to create new
momentum and edges for high-quality development.

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SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

New progress in security assurance
capabilities
The Company strengthened the building of network andinformation security systems and capabilities, elevatedthe digital and intelligent level of risk monitoring andprevention, safeguarded the secure operation of cloudnetwork of the Company and provided security products
and services for customers. Through organic integrationof its edges in cloud-network resources with security
technologies, the Company continued to explore
and innovate security products and services to offer
sustainable, iterative, and easy-to-maintain network
security capabilities. The Company supported the networkand data security assurance under scenes such astechnological application and evolution, network iteration
and upgrade as well as massive data aggregation. The
Company also further consolidated its key capabilities indata storage and data masking. The Company empowered
new security capabilities leveraging quantum technologies.
The Company carried out innovative integration of quantum
technologies with businesses such as calls, cloud-networkand platforms to create a “quantum+” product portfolio,
thus establishing its differentiated security products andservice edges. e-Surfing Security Brain 4.0 product was
deeply integrated with proprietary security vertical large
model “Xingchen – Jianwei” to effectively enhance security
operating efficiency and customer experience. As the
only domestic “carrier-grade” protection platform withcoordinated handling capabilities of multiple protection

4

measures, Anti-DDoS Cloud Dam was included in Gartner’s
list of global top service providers selection. The numberof cleaning nodes reached 64, covering more than 15,000
customers. The cleaning capacity for whole-network traffic
increased by 2.4Tbps in the first half of the year, bringing
the total to 13.68Tbps.

Further deepened reforms on all fronts
The Company deeply implemented the deepening andenhancing action of state-owned enterprise (SOE) reforms.
Insisting on sci-tech innovation as the core, while focusing
on the government and enterprise field, the Company
continued to deepen systematic transformation andoptimise the system and mechanism conducive to thedevelopment as an enterprise with “three orientations”4.
For three consecutive years, the Company has been rated
as Grade A in the assessment by the State-owned Assets
Supervision and Administration Commission of the StateCouncil on key reform tasks performance by state-owned
central enterprises. The Company established dedicatedresearch institutions for cloud computing, AI, quantum
and others, and also recruited corporate strategic level
scientists to strive for breakthroughs in cutting-edge
technologies and promote in-depth collaboration amongindustry, academia and research institutes. The Company
further deepened the corporate reform of verticals,
optimised market-oriented operation mechanism andcreated high-quality digital platforms and products.
The Company pushed forward the establishment of theEnterprise with “three orientations”: service-oriented, technology-oriented and secured enterprise.

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China Telecom Corporation Limited Interim Report 2024

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Ke Ruiwen
Chairman and Chief
Executive Officersatellite subsidiary to consolidate and expand its firstmover advantage in the field of satellite communications
and accelerate the high-quality development of satellite
communications business. The Company fully promoted
the optimisation of main process with cloud core platform
as the hub, refined the market-oriented talent allocation
mechanism and strengthened the building of talent teamsof solutions, secondary development as well as delivery
and operation for provincial and city level branches.
The Company also strengthened the highly efficientcollaboration between provincial branches and professional
companies, optimised vertically integrated support process
and support mechanism for major projects, accelerated
the coverage of branches at the district and county leveland promoted the scale development of strategic emerging
businesses. The Company deepened the reforms ofsystems for customer service, channel and cloud-network
operation, among others, and strengthened the applicationof digital and intelligent technologies to support thecontinued optimisation of product operation system, talent
structure as well as process and mechanism. Focusing

on the characteristics associated with the developmentof strategic emerging businesses, the Company further
optimised the resource allocation as well as assessment
and incentive mechanisms and innovated the allocation
approach of productive elements. The Company developed
a sound competitive compensation and incentive system tofurther strengthen employees’ enthusiasm. The Company
also accelerated the optimisation of categorised evaluation
system and assessment mechanism for scientific research
to fully stimulate the innovation potential of sci-tech talents.

3. CHAIRMAN’S STATEMENT
Currently, the development of the new round of sci-tech
revolution and industrial transformation is deepening, while
the abundant use cases are constantly fulfilling people’s
aspirations for a better digital life, presenting valuable
opportunities for the industry and the Company to further
promote high-quality development. In the first half of 2024,
the Company firmly seized the development opportunities,

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SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

implemented the new development principles completely,
accurately and comprehensively, and resolutely fulfilled its
responsibilities in building Cyberpower and Digital China,
as well as safeguarding network and information security.
The Company further deepened the implementation of
its Cloudification and Digital Transformation strategy
and accelerated the intelligent and green evolution andupgrades of the digital information infrastructure. The
Company increased the supply of high-quality products andservices and sped up the scale expansion of its strategic
emerging businesses. The Company comprehensively
deepened reforms and opening up and accelerated thedevelopment of new quality productive forces in light of
its own conditions. The Company strove to develop itself
into an enterprise with “three orientations” and further
strengthened its core functions and enhanced its corecompetitiveness. The Company achieved new resultsin high-quality development and contributed to theadvancement of Chinese modernisation with the strength oftelecommunications.

1.

Overall results

In the first half of 2024, the Company’s operating revenues
amounted to RMB268.0 billion, representing an increase of
2.8% year-on-year. Of which, service revenues5 amounted
to RMB246.2 billion, representing an increase of 4.3%
year-on-year, remaining above the industry’s growth rate.
EBITDA6 amounted to RMB76.8 billion, representing an
increase of 4.7% year-on-year. Net profit7 amounted to
RMB21.8 billion, representing an increase of 8.2% year-onyear. The basic earnings per share were RMB0.24. Capital
expenditure was RMB47.2 billion and free cash flow8
reached RMB15.5 billion.
The Company achieved stable growth of revenues fromfundamental businesses and promoted value enhancement
driven by application innovation, with its subscriber

5

6

7
8

value rising continuously. Revenues from Industrial
Digitalisation business achieved favourable growth, while
the development quality steadily elevated. In the first halfof the year, the Company’s mobile communications service
revenues amounted to RMB105.2 billion, representing an
increase of 3.6% year-on-year. Of which, revenues frommobile value-added and applications amounted to RMB18.1
billion, representing an increase of 17.1% year-on-year.
The net addition of mobile subscribers was 9.08 million,
bringing the total number of subscribers to 417 million.
Mobile ARPU reached RMB46.3. Wireline and Smart
Family service revenues amounted to RMB64.0 billion,
representing an increase of 3.2% year-on-year. Of which,revenue from Smart Family business reached RMB10.7
billion, representing an increase of 14.4% year-on-year. The
number of broadband subscribers reached 193 million witha net addition of 3.19 million. Broadband blended ARPU
reached RMB48.3. Revenues from Industrial Digitalisation
amounted to RMB73.7 billion, representing a year-on-year
growth of 7.2%, accounting for 30.0% of service revenues,
up by 0.8 p.p. year-on-year. Revenue from China Telecom
Cloud amounted to RMB55.2 billion, representing an
increase of 20.4% year-on-year.
The Company attaches great importance to shareholder
returns and strives to enhance its profitability and cash
flow generation capabilities. The Board of Directors has
resolved to continue declaring an interim dividend in year
2024, and the profit to be distributed in cash represents
over 70% of the profit attributable to equity holders of theCompany for the first half of 2024, i.e., RMB0.1671 pershare (pre-tax), representing an increase of 16.7% yearon-year. Within three years from 2024, the Company’s
profit to be distributed in cash will gradually increase to
above 75% of the profit attributable to equity holders of theCompany for the year, continuously creating more value forshareholders.

Service revenues are calculated based on operating revenues minus sales of mobile terminals, sales of wireline equipment and other non-service
revenues.
EBITDA is calculated based on operating revenues minus operating expenses plus depreciation and amortisation. EBITDA has been widely applied in
the global telecommunications industry as a benchmark to reflect operating performance, debt raising ability and liquidity, but it is not regarded asa measure of operating performance and liquidity under IFRS Accounting Standards. It also does not represent net cash from operating activities. In
addition, the Company’s EBITDA may not be comparable to similar indicators provided by other companies.
Net profit represents profit attributable to equity holders of the Company.
Free cash flow is calculated based on EBITDA minus capital expenditure, income tax and depreciation charge for right-of-use assets other than landuse-rights.

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2. Achieving new results in high-quality
development by firmly promoting thebuilding of an enterprise with “threeorientations”
2.1 Insisting on driving forces from dual
engines of fundamental and Industrial
Digitalisation businesses, while steadily
promoting the building of a service-oriented
enterprise
Insisting on the customer-oriented approach, the Company
accelerated the integration of new elements such as
cloud, artificial intelligence (AI), quantum and satellite into
standard products, to further enhance product capabilities,business value and service level. The Company sped up
the enrichment of contents and intelligent upgrades ofplatforms with a focus on the integrated CHBG scenes
to expand the digital platform business and the scale offundamental connectivity, with an aim to promote thebuilding of a service-oriented enterprise on all fronts. For
individual customers, the Company further promoted theinnovation of 5G applications and personal terminals. In
terms of applications, the Company accelerated the AI
upgrade of applications such as Communications Assistant,
Colour Ringback Tone with Video and China Telecom
Cloud Drive. The Company also stepped up the scale
expansion of differentiated businesses such as Quantumencrypted Calls and Messages and Mobile Phones with
Direct Satellites Connection, and rolled out the world’s firstCars with Direct Satellites Connection service. In terms ofhandsets, the Company launched the first AI phone that iscustomised by an operator and embedded with proprietary
large models to fulfil individual customers’ demands forintelligent and convenient communications services. For
household customers, the Company further advanced
FTTR upgrades and the expansion of Gigabit broadband
applications. The Company continuously promoted the AI
upgrades of devices such as cloud computer and homemonitor in cloud and further strengthened the AI upgrades
as well as integration and mutual promotion of platforms

such as Smart Family, Smart Community, Digital Village
and Internet of Video Things (IoVT). The Company further
enriched family applications and continued to enhanceservice capabilities. The Company created the living andservice circles for communities/villages, to fulfil household
customers’ scene-based demands for “safe home, lowcarbon home and intelligent home”. For government andenterprise customers, the Company fulfilled the demands
for digitalisation from thousands of industries leveraging“network + cloud + AI + applications” and promoted in-depth
integration between digital economy and real economy. The
Company pushed forward the upgrade of the 5G NICES Pro+
integrated product portfolio. Through 5G definitive networkand proprietary industrial PON, network construction andoperating costs were significantly reduced for customers
from the new industrialisation sector. e-Surfing Internetof Things (IoT) platform supports secure and reliable
access of ultra-large scale terminals at the hundredmillion level, as well as online sensing and control of IoT
network connectivity at the billion level, with the numberof terminal users exceeding 600 million. The Company
catalysed the launch of AI applications. Xingchen large
model for government administration hotline significantly
enhanced operating efficiency and citizens perception of the
hotline for people’s livelihood. “Xingchen Smart Answers”
realised the upgrade to intelligent interaction through SMS,
which allowed large model services to reach thousands offamilies more conveniently. Benchmark use cases of IoVT
such as Kitchen Monitoring and City Brain empowered thedevelopment of smart city, with accelerating scene-based
replication and promotion. The Company intensified its
efforts in research and development (R&D) iteration andcapability innovation of core digital platforms, continued to
upgrade the capabilities of more than 110 digital platforms
such as municipal grassroots governance platform andall-domain tourism platforms, and further empowered
customers’ digital transformation and upgrades in morethan 10 key industries such as government administration,industry, education, healthcare and finance.

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Adapting to new demands of information services in thedigital era, the Company accelerated the enhancementof intelligent service capabilities. The Company launchedmultimodal intelligent services including text, video andspeech, with the average number of services exceeding
75 million times per month, representing a year-on-yearincrease of 13.4%. The Company also promoted brandnew upgrades of the “Good Service as You Wish” service
initiatives, with edges of user satisfaction and service
reputation becoming further strengthened and enhanced.

2.2 Further leveraging the leading role ofsci-tech innovation, with the building of atechnology-oriented enterprise entering a newstage
The Company further intensified its efforts to achieve
breakthroughs in key core technologies and sped up thedevelopment of new quality productive forces with a focus
on four technological directions, namely network, cloudand cloud-network integration, AI and quantum/security.
The Company fully completed the deployment of scitech innovation and R&D system RDO, optimised the
R&D organisational system and continued to strengthen
fundamental research. The Company also optimised thebuilding of sci-tech innovation demonstration bases andaccelerated the launch of sci-tech achievements. The
Company further increased the input of sci-tech innovation
and R&D, with R&D expenses increasing by 12.5%9 yearon-year. Focusing on strategic emerging industries,
the Company accelerated the building of core scientificresearch teams comprising of top talents, with the numberof R&D personnel increasing by 15.3% over the end oflast year. The flying geese paradigm of technologicalexperts and talents, comprising of scientists, chief experts,
senior experts, and experts, has basically taken shape,with its scale exceeding 10,000 persons. The Company
attained breakthroughs in core technologies and released
6G intelligent and simple network architecture and 6G

910

sci-tech innovation experimental apparatus. “Xirang”
platform achieved breakthroughs in core technologies ofmanaging and scheduling ten-thousand GPUs in public
cloud, and completed the industry’s first verificationof over 100-kilometre distributed lossless intelligent
computing interconnection on existing network. In addition,
the Company launched the industry’s first large speechmodel that supports code switching of 40 dialects, anddeveloped the first quantum security encryption system
integrating QKD in China. The Company also upgraded theleading “Tianyan” quantum computing cloud platform. The
Company further elevated the level of sci-tech innovation
and was approved to be the source of original technologies
for a number of cutting-edge technologies. The Company
took the lead in creating innovation platforms such as cloudcomputing, quantum communications and next generation
optical network innovation consortium. Two projects
were awarded the first prize of the National Science andTechnology Progress Award 202310 and were included in thelist of outstanding enterprises of sci-tech innovation amongstate-owned central enterprises in 2023. Furthermore,
the Company vigorously promoted the conversion of scitech achievements, with achievements on its proprietary
list increasing by 40.4% year-on-year. The proportion of
proprietary IT systems and business platforms reached50.4%, up by 9.5p.p. year-on-year. The Company leveraged
sci-tech innovation to promote industrial innovation, andfully completed deployment in seven strategic emerging
businesses including cloud computing and computing
power, new generation information communications,
Big Data, AI, security, quantum and digital platform. The
Company further strengthened external empowerment
and internal applications, accelerated the cultivation of new
growth areas, effectively supported the enhancement ofcorporate operating efficiency, and continued to create new
momentum and edges for high-quality development.

The growth rate of R&D expenses is calculated based on figures of R&D expenses in Chinese Accounting Standards.
The “Key Technology and Large-scale Application of the Next Generation Internet Source Address Verification Architecture SAVA” and “Key Technology
and Engineering Application of the Fifth Generation Mobile Communications System (5G)” of China Telecom received the first prize of the National
Science and Technology Progress Award 2023.

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2.3 Further enhancing capabilities of security
products and services supply, with the buildingof a secured enterprise making solid progress

3. Fully deepening reforms andopening up to further bolster innovative
development vitality of the Company

The Company strengthened the building of network andinformation security capabilities, elevated the digitaland intelligent level of risk monitoring and prevention,
safeguarded the secure operation of cloud-network of
the Company and provided security products and services
for customers. Through organic integration of its edges
in cloud-network resources with security technologies,
the Company continued to explore and innovate security
products and services to offer sustainable, iterative,and easy-to-maintain network security capabilities.
The Company supported the network and data security
assurance under scenes such as technological applicationand evolution, network iteration and upgrade as well as
massive data aggregation. The Company also further
consolidated its key capabilities in data storage anddata masking. The Company empowered new security
capabilities leveraging quantum technologies. The Company
carried out innovative integration of quantum technologies
with businesses such as calls, cloud-network and platforms
to create a “quantum+” product portfolio, thus establishingits differentiated security products and service edges.
e-Surfing Security Brain 4.0 product was deeply integrated
with proprietary security vertical large model “Xingchen –Jianwei” to effectively enhance security operating efficiency
and customer experience. As the only domestic “carriergrade” protection platform with coordinated handlingcapabilities of multiple protection measures, Anti-DDoS
Cloud Dam was included in Gartner’s list of global top
service providers selection. The number of cleaning nodes
reached 64, covering more than 15,000 customers. The
cleaning capacity for whole-network traffic increased by
2.4Tbps in the first half of the year, bringing the total to13.68Tbps.

The Company deeply implemented the deepening andenhancing action of state-owned enterprise (SOE) reforms.
Insisting on sci-tech innovation as the core, while focusing
on the government and enterprise field, the Company
continued to deepen systematic transformation andoptimise the system and mechanism conducive to thedevelopment as an enterprise with “three orientations”.
For three consecutive years, the Company has been rated
as Grade A in the assessment by the State-owned Assets
Supervision and Administration Commission of the StateCouncil on key reform tasks performance by state-owned
central enterprises. The Company established dedicatedresearch institutions for cloud computing, AI, quantum
and others, and also recruited corporate strategic level
scientists to strive for breakthroughs in cutting-edge
technologies and promote in-depth collaboration amongindustry, academia and research institutes. The Company
further deepened the corporate reform of verticals,
optimised market-oriented operation mechanism andcreated high-quality digital platforms and products.
The Company pushed forward the establishment of thesatellite subsidiary to consolidate and expand its firstmover advantage in the field of satellite communications
and accelerate the high-quality development of satellite
communications business. The Company fully promoted
the optimisation of main process with cloud core platform
as the hub, refined the market-oriented talent allocation
mechanism and strengthened the building of talent teamsof solutions, secondary development as well as delivery
and operation for provincial and city level branches.
The Company also strengthened the highly efficientcollaboration between provincial branches and professional
companies, optimised vertically integrated support process
and support mechanism for major projects, accelerated

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the coverage of branches at the district and county leveland promoted the scale development of strategic emerging
businesses. The Company deepened the reforms ofsystems for customer service, channel and cloud-network
operation, among others, and strengthened the applicationof digital and intelligent technologies to support thecontinued optimisation of product operation system, talent
structure as well as process and mechanism. Focusing
on the characteristics associated with the developmentof strategic emerging businesses, the Company further
optimised the resource allocation as well as assessment
and incentive mechanisms and innovated the allocation
approach of productive elements. The Company developed
a sound competitive compensation and incentive system tofurther strengthen employees’ enthusiasm. The Company
also accelerated the optimisation of categorised evaluation
system and assessment mechanism for scientific research
to fully stimulate the innovation potential of sci-tech talents.
The Company optimised its system and mechanism of open
cooperation and coordinated the promotion of high-standard
opening up to create a mutually beneficial and win-win
ecological landscape. The Company continued to strengthen
the open cooperation of high-end talents and enhanced joint
nurturing with top universities and national laboratories, toform innovation synergy for strategic emerging industries.
The Company continued to expand ecological cooperation
along the upstream and downstream of the industrial chain
and created an ecological system covering fields suchas intelligent computing cloud, Xingchen large models,data elements and terminal. The Company initiated theestablishment of the Industrial Alliance of Low-altitude
Economy and released the “Low-altitude Pilot” action plan
to foster the industrial development of the low-altitude
economy. The Company further promoted the high-quality
development of international operations, optimised thelayout of overseas industrial collaboration and built anoverseas business ecosphere. The Company strengthened
cooperation with international operators. Mobile Phones
with Direct Satellites Connection service was successfully

11

launched in Hong Kong. New full-service international
communication accesses were established in Kunming and
Haikou to continuously strengthen the cooperation withcountries and regions along the “the Belt and Road”. The
Company further promoted the building of the international
cooperation and innovation platforms and gave full play
to the role of the World Broadband Association (WBBA)
as an international exchange platform as well as a hub
for industrial innovation, with its number of members
exceeding 80.

4. Deeply implementing ‘AI+’ toaccelerate the creation of importantdrivers for the development of new quality
productive forces
Grasping the development direction of AI, the Company
deeply implemented “AI+” and completed the overall AI
deployment of “1+1+1+M+N”11 with “Xingchen” as the brand.
The Company strengthened the integration and mutual
promotion of capabilities in various fields, continuously
enriched the Xingchen large model series product portfolio,
empowered the intelligent transformation for thousandsof industries, and supported enterprises to achieve costs
reduction and efficiency enhancement. In terms of theintelligent computing cloud foundation, the Company
established the leading integrated intelligent computing
service capabilities, “Xirang”, to offer supreme computing
power scheduling services, highly efficient integrated
computing acceleration services and inclusive one-stop
intelligent computing services, as well as a thriving model
application ecosystem. The Company pushed forward thedeployment of proprietary intelligent computing powerwith a hierarchical approach. “Xirang” has the access of a
total of 22 EFLOPS of various types of intelligent computing
power from 39 partners. The Company fully upgraded China
Telecom Cloud products and ecological matrix, with China
Telecom Cloud entering into the new development stage ofintelligent cloud. In terms of the foundation for the generalpurpose large models, the Company further enhanced thecapabilities of large foundation models. The large language
model, large speech model and large multimodal model

1+1+1+M+N: 1 foundation for intelligent computing cloud, 1 foundation for the general-purpose large models, 1 data foundation, “M” refers to thenumber of large models for own use, and “N” refers to the number of large vertical models.

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of Xingchen series have all completed “dual recordation”
of algorithms and services. Of which, Xingchen large
speech model was the first large speech model that is
independently recorded in China. The Company also
released China’s first AI development tool “Xingchen •Software factory” that can generate code with one click
and autonomously test and correct errors. The Company
proactively promoted the advancement of large modeltechnologies through open source, and took the lead amongstate-owned central enterprises to achieve open source
for large language models at various grades with billions,tens of billions, and trillions of parameters. The Company
has launched 32 large vertical models in fields such asindustrial, education, healthcare, as well as government
administration, empowering 370 2B projects. The Company
also launched standardised AI products such as AI phones,
AI cloud computers, AI large model integrated devices
to meet the diverse intelligent demands of customers.
The Company also launched 10 internal large models forcustomer service, network operations, office administrationand other corporate operation segments. The proportionof intelligent voice service by avatar customer service
representatives has steadily increased, while the AIempowered smart energy-saving effects for base stations
and facility rooms have continuously become prominent. In
terms of data foundation, the Company launched the “DataChain AI Network (DCAN)” capability system, and createdhigh-quality data sets that aggregate data from fields suchas public, industry and internet. The Company created
Xinghai data intelligent core platform which empowered
more than 150 projects for government and enterprisecustomers. The Company also upgraded Lingze 2.0 data
elements platform to serve public data operation and theconstruction of data infrastructure in 22 provinces andcities. The number of partners of data product supermarket
model exceeded 1,300, with the number of data products
exceeding 2,000.

5. Accelerating the intelligent andgreen upgrades of digital information
infrastructure to consolidate thefoundation for high-quality development of
the Company
Insisting on “network as the foundation and cloud as
the core, while grasping the development directionof intelligence”, the Company continued to promote
the evolution and upgrades of the digital information
infrastructure. The Company built computing infrastructurewith cloud-intelligence integration and training-inferencing
integration, completed the construction of domesticallyleading all liquid-cooling pools with ten-thousand GPUs in
Beijing-Tianjin-Hebei and the Yangtze River Delta, which
already undertook training tasks for large models at thetrillion parameter level. The Company deployed inferencing
pools in 31 provinces to meet the inferencing demands
from various AI applications. The newly added intelligent
computing power was 10 EFLOPS, bringing the total to
21 EFLOPS. The Company promoted the comprehensive
upgrade of datacentres to AIDC and achieved agile deliveryof cabinets, elastic supply of cooling and power, as wellas efficient energy use. Focusing on areas where AI
industry concentrates with abundant computing powerand clean energy, the Company built computing powerinterconnection networks with high throughput and low
latency, which are also intelligent, inclusive and easy-touse. The Company continued to optimise the latency circles
with the latency of 1ms within cities, 5ms for intra-region
and 20ms for inter-regions to consolidate the foundation
for computing power connection. The Company built the
400Gbps all-fibre high-speed network which supports
elastic bandwidth and time slicing. The Company has
exclusive capabilities of quantum-encrypted dedicated lines
within the industry to fulfil the demands for secure, elastic
and inclusive transmissions in the era of AI. The numberof 10G PON ports of Gigabit fibre network exceeded 9

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million, with a coverage of 94% of residential areas in cities
and towns. The Company carried out the deployment of
50G PON network to support the demands for 10-Gigabit
access in locations such as key subdistricts, industrial
parks and factories. The Company’s cloud-network
operation capabilities continued to be strengthened andboth the amount of network-wide fault work orders andthe processing time have been reduced. The Company also
promoted the automation of cloud-network operation, fully
accelerated the creation and application of large model for
network, and steadily enhanced the automatic processing
rate in cloud-network operation and maintenance.
The Company further deepened co-building and cosharing with China Unicom to build a high-quality networkwith high-/mid-/low-band coordination as well as 5G/4G
integration. The newly added co-built and co-shared 5G
mid-/high-band base stations exceeded 100,000, withthe total number of 5G base stations exceeding 1.31
million. The Company steadily pushed forward with one
single 4G network, with the number of 4G mid-band basestations exceeding 2 million. The Company coordinatedthe promotion of co-sharing 800MHz/900MHz low-band as
well as 700MHz inter-network roaming, with the number of
low-band base stations reaching 790,000. The 5G network
achieved contiguous coverage in areas of townships andabove across the country, while the in-depth coveragerate of key areas and key scenes increased by 7.4%. The
5G accessibility rate of administrative villages across thecountry increased by 25%. Coverage and perceived speed ofmobile network steadily increased. The Company continued
to strengthen the strategic deployment of 5G-A, promoted
the upgrade of 5G-A capabilities on all fronts and jointly
completed the large-scale deployment of Redcap andcarrier aggregation in more than 100 cities.

12

The Company proactively implemented the green
development principles. Under the guidance of the “1248”12
green development model, the Company took different
measures at the same time to further strengthen the green
upgrade of cloud-network infrastructure. In the first halfof 2024, the greenhouse gas emissions per unit of total
volume of telecommunications services maintained adouble-digit decline year-on-year. The Company establishedgreen datacentres in an all-round way and accelerated
the green transformation of traditional communications
buildings. 12 datacentres of the Company were newly rated
as the national green datacentres, which was the largest
number in the industry. The Company further promoted
AI intelligent energy-saving and green transformation forfacility rooms and base stations, with an AI energy-saving
coverage rate of 96% among all 5G/4G base stations and acumulative coverage of 1,800 facility rooms and 4.95 million
sectors. The Company completed green transformationfor 14,000 base stations and 280 facility buildings. The
annualised energy-saving in total exceeded 1 billion kWh.
The Company increased the use of green electricity, withthe volume of green electricity with “integration of tradingof permit and electricity” increasing by 960 million kWh in
the first half of the year, representing an increase of over
200% year-on-year. By strengthening the promotion ofgreen products and services, while focusing on areas suchas clean production, pollution control and environmental
protection, the Company built a series of green solutions
such as ecological environment Big Data platform, air
pollution prevention and control command and schedulingsystem, as well as green lighting to empower the green andlow-carbon transformation of the economy and society.

“1248”: “1” represents one strategic focus, i.e., green and low-carbon development as an important element of the “Cloudification and Digital
Transformation” strategy; “2” represents two priorities, i.e., accelerating transformation towards green development on internal fronts and developing
a green production and lifestyle on external fronts; “4” represents four basic strategies, i.e., high-quality development, coordinated development,sustainable development, and innovative development; and “8” represents eight major green initiatives, i.e., constructing new green cloud-network,
creating new green operation, building new green ecology, strengthening new green empowerment, promoting new green technologies, consolidating
new green support, developing new green energy, and creating new green value.

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6. Proactively fulfilling social
responsibilities while further elevating thelevel of corporate governance
The Company successfully completed communications
assurance tasks for multiple key events including thelaunch of the Shenzhou-18 manned spaceship. The
Company utilised satellite communications and drones toeffectively assist flood fighting and disaster relief efforts
during times of natural disasters such as heavy rains andfloods. The Company empowered rural revitalisation with AI
technologies, promoted the deep integration of agriculture
and rural areas and developed the Digital Village
information solution to bridge the digital divide between
urban and rural areas. In addition, the Company remainedcommitted to social welfare and proactively helped thedisabled and underprivileged. Its more than 90,000 “Caring
Stations” have provided 8.42 million person-times ofservices. The Company protected the rights and interestsof its employees in accordance with the law, created acomprehensive system for employee care, and continued
to enhance its institutional guarantees. The Company also
created professional development paths for employees,
striving to achieve the mutual growth of employees and theCompany.
Insisting on high-standard corporate governance, theCompany fulfilled its obligations of information disclosurein compliance with laws and regulations and increased thelevel of corporate transparency to effectively safeguard
investors’ rights to know. The Company continued to
improve its corporate compliance management system,
maintained compliance and efficient operation of its

Shareholders Meeting, Board of Directors and Supervisory
Committee and continued to optimise internal control
process. The Company maintained steady and compliance
operations and effectively safeguarded the best and longterm interests of its shareholders. The Company received
high affirmation from domestic and international capital
markets for its outstanding corporate governance. It wasvoted as the “Most Honoured Companies in Asia” for the
14th consecutive year in the “All-Asia-Executive Team Poll2024” organised by Institutional Investor and was also voted
as “No.1 Best Telecommunications Company in Asia”.
The Company also received top three rankings in Asian
telecommunications sector in multiple award polls such as
the “Best Board of Directors”, the “Best Overall ESG”, the“Best Investor Relations”, and the “Best IR Team”. It was
accredited “Golden Bull Most Investment Value Award” and“Golden Bull Award for Hong Kong Stocks” in the Golden
Bull Award poll organised by China Securities Journal .
Moreover, the Company was awarded the “Best Practise of
the Board of Directors for Listed Companies in 2023” by the
China Association for Public Companies.

7.

OutlookOver the past three years since the Company’s A Shares
listing, cloud computing, AI, Big Data, quantum informationand other disruptive and cutting-edge technologies
have been giving rise to new business models, newindustries and new patterns. In the face of the changes
and opportunities, the Company upheld its fundamental
principles and broke new ground, carried out expansion
and upgrades, and fully and deeply implemented its
Cloudification and Digital Transformation strategy. The

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Company vigorously promoted in-depth reform and highlevel opening up and expedited its transformation into
a service-oriented, technology-oriented, and secured
enterprise. The Company continued to strengthen highquality development, achieved favourable growth in service
revenues, further enhanced its profitability and significantly
increased shareholders’ returns. The Company has
successfully fulfilled commitments made to the capital
market during A Shares listing and joined hands withshareholders to draw the development blueprint and share
the results of development.
Currently, the Company is at an important point of highquality development. With three years after A Shares
listing as a new start, the Company will seize newopportunities, embrace the new blue ocean and accelerate
the development of new momentum and new edges.
The Company will continue to deeply implement its
Cloudification and Digital Transformation strategy, further
deepen reforms on all fronts and fully promote high-quality
development. Insisting on the customer-oriented principle,
the Company will develop more high-quality, efficient, green
and secure integrated intelligent information products
and applications to further fulfil customers’ aspirations
for a better digital life. The Company will further boost the
principal role of enterprises in sci-tech innovation, continue
to enhance its independent innovation capability, strive forbreakthroughs in key core technologies, accelerate theconversion and application of sci-tech achievements andensure the steady and far-reaching corporate developmentwith high-level security. The Company will strive to enhance
corporate value, proactively bring returns to shareholders
and vigorously write a chapter of Chinese modernisation fortelecommunications.
Finally, on behalf of the Board of Directors, I would like totake this opportunity to express our sincere appreciation
to all shareholders and customers for their continued careand support, and our sincere thanks to all our employees
for their hard work and contributions. Furthermore, I would
also like to extend our heartfelt gratitude towards Mr. Shao
Guanglu for his outstanding contributions to the Company’stransformation and upgrades as well as continued
development made during his tenure.

Ke Ruiwen
Chairman and Chief Executive Officer
Beijing, China
20 August 2024

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4. MAJOR OPERATION DURING
THE REPORTING PERIODOPERATING REVENUES
In the first half of 2024, the Company seized thestrategic opportunities brought by the new round of scitech revolution and industrial transformation, fully,
accurately, and comprehensively implemented the newdevelopment principles, continued to deeply implement
its “Cloudification and Digital Transformation” strategy,
continuously promoted the transformation and upgrades of
its fundamental businesses, sped up the scale developmentof strategic emerging businesses, and advanced thebuilding of a service-oriented, technology-oriented, andsecured enterprise to a new level, achieving new results incorporate high-quality development. In the first half of theyear, operating revenues amounted to RMB268,011 million,
representing an increase of 2.8% over the same periodof last year. Service revenues amounted to RMB246,235
million, representing an increase of 4.3% over the same
period of last year. Of which, mobile communications
service revenues 13 amounted to RMB105,217 million,
representing an increase of 3.6% over the same period oflast year. Wireline and Smart Family service revenues14
amounted to RMB63,993 million, representing an increaseof 3.2% over the same period of last year. Industrial
Digitalisation service revenues15 amounted to RMB73,750
million, representing an increase of 7.2% over the same
period of last year.

OPERATING EXPENSES
The Company continued to speed up the scale developmentof strategic emerging businesses and increased investment
in key areas such as sci-tech innovation and Industrial
Digitalisation. At the same time, it strengthened AIempowered costs reduction and efficiency enhancement
and continuously improved resource efficiency to support
corporate high-quality development and long-term value
creation. In the first half of 2024, the Company’s operating
expenses were RMB240,751 million, representing an
increase of 2.4% over the same period of last year.
Operating expenses accounted for 89.8% of operating

13

14

15

revenues, representing a decrease of 0.4 percentage point
over the same period of last year.
The Company sped up the intelligent upgrade of digital
information infrastructure based on cloud-network
integration, insisted on investment with returns anddeepened co-building and co-sharing. In the first halfof the year, depreciation and amortisation amounted to
RMB49,532 million, representing an increase of 3.5% overthe same period of last year.
The Company continued to enhance network quality andcapabilities, promoted the scale development of strategic
emerging businesses and appropriately increased
investment in the building of capabilities. The Company
leveraged digital means such as AI to further strengthen
refined management and continuously enhance resource
utilisation efficiency. In the first half of the year, network
operations and support expenses amounted to RMB80,131
million, representing an increase of 5.4% over the same
period of last year.
The Company proactively promoted the digital transformationof marketing, improved the utilisation efficiency of selling
expenses, and continuously strengthened breakthroughs
in key core technologies. In the first half of the year, theselling, general and administrative expenses amounted to
RMB33,090 million, representing an increase of 0.8% overthe same period of last year.
The Company continued to step up the recruitment of scitech and innovative talents, and increased incentives forhigh-performance teams, key business units, and frontline
employees. In the first half of the year, personnel expenses
amounted to RMB50,566 million, representing an increaseof 3.2% over the same period of last year.
In the first half of the year, other operating expenses
amounted to RMB27,432 million, representing a decreaseof 6.8% over the same period of last year. The decrease
was mainly due to the decrease in the selling expenses ofmobile terminals.

Mobile communications service revenues represent the aggregate amount of mobile communications service fees, mobile Internet access service feesand short messaging service fees, etc., charged to customers for the provision of mobile services.
Wireline and Smart Family service revenues represent the aggregate amount of wireline communications service fees, broadband Internet accessservice fees, e-Surfing HD service fees and Smart Family applications service fees charged to customers for the provision of wireline services.
Industrial Digitalisation service revenues represent the aggregate amount of fees charged to customers for the provision of Internet datacentre
services, cloud services, digital platform services, dedicated Internet access services, etc.

Interim Report 2024 China Telecom Corporation Limited

023

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSISNET FINANCE COSTS
In the first half of 2024, the Company’s interest expenseon lease liabilities decreased, and the net finance costs
amounted to RMB250 million, representing a decrease of
48.2% over the same period of last year.

PROFITABILITY LEVELThe Company strove to give play to its edges in cloudnetwork integration and accelerate the development of
new quality productive forces. The resource utilisation andoperating efficiency of the Company continued to increase
while its profitability further strengthened. In the firsthalf of the year, profit attributable to equity holders of theCompany reached RMB21,812 million, representing an
increase of 8.2% over the same period of last year. EBITDA
was RMB76,792 million, representing an increase of 4.7%
over the same period of last year.

CAPITAL EXPENDITURE AND CASH FLOWSThe Company sped up the intelligent and green evolution
and upgrade of digital information infrastructure, andcontinued to invest in capital expenditure. At the same time,
the Company constantly deepened the co-building and cosharing to save capital expenditure correspondingly. In thefirst half of the year, the capital expenditure amounted to
RMB47,222 million, representing an increase of 13.5% overthe same period of last year. Correspondingly, free cash
flow in the first half of the year decreased to RMB15,462
million, maintaining a healthy cash flow level.

ASSETS AND LIABILITIESThe Company continued to maintain a solid financial
position. As at 30 June 2024, the total assets increased to
RMB870,991 million from RMB835,814 million at the end of2023, representing an increase of 4.2%. The total liabilities
increased to RMB410,317 million from RMB388,647 million
at the end of 2023, representing an increase of 5.6%. The
debt-to-asset ratio was 47.1%, and the capital structure
remained robust.

5. OTHER DISCLOSURE(1) POTENTIAL RISKS
Risks of adapting to economic and policy
environment
At present, the world economy is undergoing profoundcyclical and structural changes, with insufficient economic
growth momentum and slower growth. The broad
application of information technologies represented
by AI promotes the transformation of innovation andgrowth modes, and changes the traditional productionmode, which will have a profound impact on humansociety. The Company’s internal Cloudification and Digital
Transformation and structural adjustments need to befurther deepened, and the foundation for promoting thetransformation of development mode, promoting theeffective enhancement of quality and the reasonable growthof quantity needs to be further consolidated. The Company
will proactively adapt to market, technology and businessdevelopment trends, strengthen sci-tech innovation,
deepen reform and opening up, continuously shape new
momentum and new advantages for development, andaccelerate corporate transformation to become a serviceoriented, technology-oriented and secured enterprise.

Risks relating to sci-tech innovation
The new round of sci-tech revolution and industrial
transformation has developed rapidly, spawning a large
number of new scenes, new business forms and newmodels. Large models have shown an explosive growthtrend. Computing power service and cloud service havebecome the main development directions, and the value ofdata elements has been released rapidly. The Company’s
sci-tech innovation and proprietary R&D and control
capabilities of products need to be continuously improved.
The Company will continue to strive for breakthroughs in
key core technologies, further increase the deployment ofhigh-level sci-tech innovation platforms around strategic
emerging businesses and future industries, enhance R&D
efficiency and results output, and vigorously implement the
project of strengthening the enterprise with talents.

024

China Telecom Corporation Limited Interim Report 2024

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Network and data security risks

International business operation risks

The network and data security problems are showing
characteristics of complexity and diversity. While thethreshold for the occurrence of cyber-attacks has greatly
lowered, the scale of the attacks has increased significantly.
The security risks brought by new technologies and newscenes increased, and the dynamic characteristics ofhybrid multi-cloud environments make security monitoring
more complex. The use of data in compliance with laws
and regulations and the prevention of data leakage
face new challenges. The Company’s network and data
security system needs to be further improved, and thecapabilities to maintain network and data security need tobe continuously fortified. The Company will further intensify
the construction of the network and data security system,
enhance the network security protection capabilities,
strengthen the risk prevention of extreme scenes, andimprove the independent and self-control capability of core
network technologies. The Company will further deepen theprotection of data security and users’ personal information,
improve the building of organisation and capability of antifraud governance, and effectively safeguard the security ofdata and personal information.

Factors such as the intertwined changes in the world,changes in the policy environment of the countries/
regions where the Company’s business and investments
are located have led to increased uncertainties ininternational business expansion. The Company still has
certain deficiencies in terms of overseas product services,
government and enterprise product development andoperation capabilities, and sales channel expansion. The
Company will closely track changes in the internationalsituation, pay attention to changes in policies and rules of
relevant countries/regions, and actively use the rule of law
and rules to safeguard the legitimate rights and interestsof the Company. The Company will strengthen the buildingof overseas compliance management and risk prevention
systems, and conduct risk assessment and regular tracking
and monitoring of international business operations toenhance risk response capabilities.

Risks of emerging businesses risks fromstrategic emerging businesses and futureindustries
There are many uncertainties in the development ofstrategic emerging businesses and future industries. The
competition in the digital service market has become morediversified, and the competition in business areas suchas large models and intelligent computing cloud is fierce.
The R&D and application capabilities of the Company’s
emerging businesses need to be further improved. The
Company will gain further insight into customer needs,
further strengthen ecological cooperation, increase
investment in R&D, step up the creation of scene-based
solutions, intensify the promotion of differentiated andstandardised products and services, and promote the rapid
development of strategic emerging businesses.

(2) OTHER DISCLOSURES
Purchase, Sale or Redemption of Listed
Securities of the Company
During the six-month period ended 30 June 2024, neither
the Company nor any of its subsidiaries has purchased,sold or redeemed any of the Company’s listed securities(including sale of treasury shares). As at 30 June 2024, theCompany did not hold any treasury shares.

Interim Report 2024 China Telecom Corporation Limited

025

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Directors’ and Supervisors’ Interests and Short Positions in Shares, Underlying Shares andDebentures of the Company
Save as disclosed below, as at 30 June 2024, none of the Directors and Supervisors of the Company had any interests or
short positions in the shares, underlying shares or debentures of the Company or its associated corporations (as defined inPart XV of the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong) (the “SFO”)) as recorded in the register
required to be maintained under Section 352 of the SFO or as otherwise notified to the Company and the HKSE pursuant to
the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix C3 of
the Listing Rules.

Name

Position

Class ofshare

Chen Shengguang

Non-Executive Director

A ShareZhang Jianbin

Employee Representative
Supervisor (resigned on
21 August 2024)

A ShareShares held asapproximate
percentage ofthe total numberof respective classof shares in issue

Shares held asapproximate
percentage ofthe total numberof shares in issue

Number of
Shares Capacity
1,000 Beneficial owner(Long Position)

0.00%

0.00%

1,000 Interest of spouse(Long Position)

0.00%

0.00%

1 Beneficial owner(Long Position)

0.00%

0.00%

During the six-month period ended 30 June 2024, the Company has not granted its Directors or Supervisors, or theirrespective spouses or any of their respective minor child (natural or adopted) or on their behalf any rights to subscribe forthe shares or debentures of the Company or any of its associated corporations and none of them has ever exercised any
such right to subscribe for the shares or debentures.

026

China Telecom Corporation Limited Interim Report 2024

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Material Interests and Short Positions in Shares and Underlying Shares of the Company
As at 30 June 2024, the interests or short position of persons who are entitled to exercise or control the exercise of 5% ormore of the voting power at the shareholders’ class meetings of the Company (excluding the Directors and Supervisors) in
the shares and underlying shares of the Company as recorded in the register required to be maintained under Section 336
of the SFO are as follows:

Name of shareholder

Number of shares* Class of share

Approximate
percentage ofthe respectiveclass of sharesin issueApproximate
percentage ofthe total
number ofshares in issue Capacity

China Telecommunications Corporation

58,240,172,066 A Share(Long Position)

75.02%

63.65% Beneficial owner

Guangdong Rising Holdings Group Co., Ltd.

5,614,082,653# A Share(Long Position)

7.23%

6.14% Beneficial owner

CHINA CITIC FINANCIAL AMC
INTERNATIONAL HOLDINGS LIMITED

1,217,572,000 H Share(Long Position)

8.77%

1.33% Beneficial owner

China CITIC Financial Asset Management
Co., Ltd.

1,217,572,000 H Share(Long Position)

8.77%

1.33% Interest of controlled
corporation#

As at 30 June 2024, the interest in the shares of the Company has been provided by such shareholder as security to a person other than a qualified
lender, and the number of shares involved was 820,000,000.

*

The information disclosed above is based on the interests and short position as recorded in the register required to be maintained by the Company
under Section 336 of the SFO. Pursuant to the relevant provisions of the SFO, shareholders only have to file a disclosure of interest on the occurrence of
certain events – called “relevant events”. Accordingly, the exact numbers of shares held by the above-mentioned shareholders as at 30 June 2024 may
be different from those as disclosed above.

Save as disclosed above, as at 30 June 2024, in the register required to be maintained under Section 336 of the SFO, noother persons were recorded to hold any interests or short positions in the shares and underlying shares of the Company.

Interim Report 2024 China Telecom Corporation Limited

027

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Audit Committee

Interim Dividend

The audit committee has reviewed with management
the accounting principles and practices adopted by theGroup and discussed risk management, internal control
and financial reporting matters of the Group including thereview of the Interim Report for the six-month period ended
30 June 2024.

The interim dividend is expected to be paid on or before 18
October 2024 to those shareholders whose names appear
on the H Share Register of Members of the Company
on Tuesday, 10 September 2024. For the purpose ofdetermining H Share shareholders’ entitlement to theinterim dividend, the H Share Register of Members will beclosed from Thursday, 5 September 2024 to Tuesday, 10
September 2024 (both days inclusive). In order to be entitledto the interim dividend, holders of H Shares who have notregistered the transfer documents are required to deposit
the transfer documents together with the relevant sharecertificates at Computershare Hong Kong Investor Services
Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre,
183 Queen’s Road East, Wanchai, Hong Kong at or before
4:30 p.m. on Wednesday, 4 September 2024. The Company
will announce the specific arrangement for the payment ofinterim dividend to holders of A Shares separately on the
Shanghai Stock Exchange.

Compliance with the Model Code for Securities
Transactions by Directors and Supervisors
The Company has adopted the Model Code as set out
in Appendix C3 of the Listing Rules to govern securities
transactions by Directors and Supervisors. Based on thewritten confirmations from the Directors and Supervisors,
the Company’s Directors and Supervisors have confirmed
their compliance with the Model Code regarding therequirements in conducting securities transactions for theperiod from 1 January 2024 to 30 June 2024.

Share Subscription
Reference is made to the announcement of the Company
dated 11 March 2024. On 11 March 2024, China Telecom
Quantum Information Technology Group Limited, awholly-owned subsidiary of the Company, entered into theConditional Share Subscription and Strategic Cooperation
Agreement with Quantumctek Co., Ltd. (“Quantumctek”),
planning to subscribe for non-public issued shares of
Quantumctek with self-owned funds. The transaction
has been approved by State-owned Assets Supervision
and Administration Commission of the State Council andshareholders’ meeting of Quantumctek, and is yet to beapproved by and registered with relevant authorities.

Dividends will be denominated and declared in Renminbi.
Dividends for holders of A Shares and the investors of the
Shanghai Stock Exchange and Shenzhen Stock Exchange(including enterprises and individuals) investing in the H
Shares of the Company listed on the Stock Exchange (the“Southbound Trading Link”) (the “Southbound Investors”)
will be paid in Renminbi, whereas dividends for H Share
shareholders other than Southbound Investors will be paidin Hong Kong dollars. The relevant exchange rate will be
the average median rate of Renminbi to Hong Kong dollars
as announced by the People’s Bank of China for the weekprior to the date of declaration of dividends (i.e., 20 August2024) (RMB0.916676 equivalent to HK$1.00).

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China Telecom Corporation Limited Interim Report 2024

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS

Pursuant to the “Enterprise Income Tax Law of thePeople’s Republic of China”, the “Implementation
Rules of the Enterprise Income Tax Law of the People’s
Republic of China” and the “Circular of the State Taxation
Administration on Issues Relating to the Withholding ofEnterprise Income Tax by PRC Resident Enterprises on
Dividends Paid to Overseas Non-PRC Resident Enterprise
Shareholders of H Shares” (Guo Shui Han [2008] No.
897), the Company shall be obliged to withhold and pay
10% enterprise income tax when it distributes the 2024
interim dividend to non-resident enterprise shareholdersof overseas H Shares (including HKSCC Nominees Limited,
other corporate nominees or trustees, and other entities
or organisations) whose names appear on the Company’s
H Share Register of Members on Tuesday, 10 September
2024.
Pursuant to the “Notice of the State Taxation Administration
on Issues Concerning Taxation and Administration ofIndividual Income Tax After the Repeal of Guo Shui Fa [1993]
No. 045” (Guo Shui Han [2011] No. 348), if the individual
H Share shareholders who are Hong Kong or Macau
residents and those whose country of domicile is a country
which has entered into a tax treaty with PRC stipulating adividend tax rate of 10%, the Company will finally withhold
and pay individual income tax at the rate of 10% on behalfof the individual H Share shareholders. If the individual H
Share shareholders whose country of domicile is a country
which has entered into a tax treaty with PRC stipulating
a dividend tax rate of less than 10%, the Company will
finally withhold and pay individual income tax at the rateof 10% on behalf of the individual H Share shareholders.
If the individual H Share shareholders whose country of
domicile is a country which has entered into a tax treaty
with PRC stipulating a dividend tax rate of more than 10%
but less than 20%, the Company will withhold and pay
individual income tax at the actual tax rate stipulated in therelevant tax treaty. If the individual H Share shareholders
whose country of domicile is a country which has enteredinto a tax treaty with PRC stipulating a dividend tax rateof 20%, or a country which has not entered into any tax
treaties with PRC, or under any other circumstances,
the Company will withhold and pay individual income
tax at the rate of 20% on behalf of the individual H Share
shareholders. If those shareholders need to request arefund of tax overpaid from the PRC tax authorities on his
own or through an agent or the Company in accordancewith the relevant requirements of the “Announcement of
the State Taxation Administration on Promulgating theAdministrative Measures for Non-resident Taxpayers for
Treatments under Tax Treaties” (Announcement [2019]No. 35 of the State Taxation Administration), they shallsubmit the “Information Report on Non-resident Taxpayers
for Treatments under Tax Treaties” (Announcement [2019]No. 35 of the State Taxation Administration), and collect andfile such information.
The Company will determine the country of domicile of theindividual H Share shareholders based on the registeredaddress as recorded in the H Share Register of Membersof the Company on Tuesday, 10 September 2024 (the“Registered Address”). If the country of domicile of anindividual H Share shareholder is not the same as theRegistered Address or if the individual H Share shareholder
would like to apply for a refund of the additional amountof tax finally withheld and paid, the individual H Share
shareholder shall notify and provide relevant supporting
documents to the Company on or before Wednesday, 4September 2024. Upon examination of the supporting
documents by the relevant tax authorities, the Company
will follow the guidance given by the tax authorities toimplement relevant tax withholding and payment provisions
and arrangements. Individual H Share shareholders
may either personally attend or appoint a representative
to attend to the procedures in accordance with therequirements under the tax treaties notice if they do notprovide the relevant supporting documents to the Company
within the time period stated above.

Interim Report 2024 China Telecom Corporation Limited

029

SECTION III MANAGEMENT’S DISCUSSION AND ANALYSISFor Southbound Investors (including enterprises andindividuals), the Shanghai branch of China Securities
Depository and Clearing Corporation Limited and theShenzhen branch of China Securities Depository andClearing Corporation Limited, as the nominees of theinvestors of the Southbound Trading Link, will receive all
dividends distributed by the Company and will distribute thedividends to the relevant investors under the SouthboundTrading Link through its depositary and clearing system.
According to the relevant provisions under the “Noticeon Taxation Policies for Shanghai – Hong Kong Stock
Connect Pilot Programme” (Cai Shui [2014] No. 81) and“Notice on Taxation Policies for Shenzhen-Hong Kong
Stock Connect Pilot Programme” (Cai Shui [2016] No. 127),
the Company shall withhold and pay individual income
tax at the rate of 20% with respect to dividends received
by the Mainland individual investors for investing in the
H Shares of the Company listed on the Stock Exchange
through the Southbound Trading Link. In respect of thedividends received by Mainland securities investment
funds investing in the H Shares of the Company listed on
the Stock Exchange through the Southbound Trading Link,
the tax levied shall be ascertained by reference to therules applicable to individual investors. The Company is
not required to withhold and pay income tax on dividends
derived by the Mainland enterprise investors under theSouthbound Trading Link, and such enterprises shallreport the income and make tax payment by themselves.
The record date for entitlement to the shareholders’ rights
and the relevant arrangements of dividend distribution for
the Southbound Investors are the same as those for theCompany’s H Share shareholders.
The Company assumes no responsibility and disclaims
all liabilities whatsoever in relation to the tax status or
tax treatment of the individual H Share shareholders andfor any claims arising from any delay in or inaccurate
determination of the tax status or tax treatment of theindividual H Share shareholders or any disputes relating
to the tax withholding and payment mechanism orarrangements.

For H Share shareholders other than the SouthboundInvestors, the Company has appointed Bank of China (HongKong) Trustees Limited as the receiving agent in Hong
Kong (the “Receiving Agent”) and will pay to such Receiving
Agent the interim dividend declared for payment to H Share
shareholders other than the Southbound Investors. The
Receiving Agent will pay the interim dividend net of theapplicable tax on 18 October 2024. The relevant dividend
warrants will be despatched to H Share shareholders
by ordinary post and the risk of errors involved in the
postage will be borne by the H Share shareholders. For
the Southbound Investors, the interim dividend net ofthe applicable tax will be paid by the Company to the
Shanghai branch of China Securities Depository andClearing Corporation Limited and the Shenzhen branchof China Securities Depository and Clearing Corporation
Limited on 18 October 2024. The Shanghai branch of China
Securities Depository and Clearing Corporation Limited andthe Shenzhen branch of China Securities Depository andClearing Corporation Limited will pay the interim dividend
net of the applicable tax to the Southbound Investors.

Other Information
According to paragraph 40 of Appendix D2 of the Listing
Rules, save as disclosed in this report, the Company
confirms that the current company information in relation
to those matters set out in paragraph 32 of Appendix D2 has
not changed materially from the information disclosed in
the Company’s 2023 Annual Report prepared in accordancewith IFRS Accounting Standards (“2023 Annual Report”).

030

China Telecom Corporation Limited Interim Report 2024

SECTION IV CORPORATE
GOVERNANCE REPORT

1. GENERAL MEETINGS DURING THE REPORTING PERIOD
Session

Date

Annual General Meeting 2024-05-27
for the year 2023

Designated websites for
publishing resolutions
www.hkexnews.hk
www.chinatelecom-h.com

Resolutions of the Meeting
1.

2.
3.
4.
5.

6.

7.

THAT the financial reports of the Company for the yearof 2023 audited by PricewaterhouseCoopers Zhong
Tian LLP and PricewaterhouseCoopers be considered
and approved.
THAT the Annual Reports for the year of 2023 beconsidered and approved.
THAT the report of the Board for the year of 2023 beconsidered and approved.
THAT the report of the Supervisory Committee for theyear of 2023 be considered and approved.
THAT the profit distribution and dividend declaration
plan of the Company for the year of 2023 beconsidered and approved.
THAT the authorisation to the Board to decide on theinterim profit distribution plan of the Company for
year 2024 be considered and approved.
THAT the re-appointment of PricewaterhouseCoopers
and PricewaterhouseCoopers Zhong Tian LLP as theexternal auditors of the Company for the year ending
31 December 2024 and the authorisation to the Board
to fix the remuneration of the auditors be considered
and approved.

Interim Report 2024 China Telecom Corporation Limited

031

SECTION IV CORPORATE GOVERNANCE REPORT

Session

Date

Designated websites for
publishing resolutions

Resolutions of the Meeting
8.

9.
10.

11.

12.

THAT the purchase of liabilities insurance for theCompany and its Directors, Supervisors and senior
management be considered and approved.
THAT the proposal regarding the amendments to the
Articles of Association be considered and approved.
THAT the proposal regarding the amendments to theRules of Procedures of the Shareholders’ General
Meeting be considered and approved.
THAT the proposal regarding the amendments to theRules of Procedures of the Meeting of the Board of
Directors be considered and approved.
THAT the proposal regarding the amendments to theRules of Procedures of the Meeting of the Supervisory
Committee be considered and approved.

During the Reporting Period, the Company held 1 general meeting, with all resolutions approved. For details, please refer tothe relevant announcements published by the Company on the websites of the Stock Exchange and the Company.
The convening, holding, voting and other relevant procedures of the general meetings of the Company were in compliancewith the laws and regulations, the Articles of Association of the Company, the Rules of Procedures of the Shareholders’
General Meeting and other relevant requirements to ensure that all shareholders, especially minority shareholders, enjoy
equal status and fully exercise their rights.

032

China Telecom Corporation Limited Interim Report 2024

SECTION IV CORPORATE GOVERNANCE REPORT

2. CHANGES IN DIRECTORS,SUPERVISORS AND SENIORMANAGEMENT SINCE THE DATE OF
THE 2023 ANNUAL REPORT
Reference is made to the announcement of the Company
dated 23 May 2024. Due to his age, Mr. Shao Guanglu has
retired from his positions as an Executive Director, thePresident and Chief Operating Officer of the Company witheffect from 23 May 2024.
Reference is made to the announcement of the Company
dated 12 July 2024, the circular of the Company dated 2
August 2024 and the announcement of the Company dated
21 August 2024. On 12 July 2024, Mr. Liang Baojun (“Mr.
Liang”) has been appointed as the President and Chief
Operating Officer of the Company. The relevant appointment
became effective from 12 July 2024 until the annual general
meeting of the Company for the year 2025 to be held inyear 2026. The appointments of Mr. Liang as an Executive
Director of the Company and Madam Huang Xudan (“Madam
Huang”) as a Shareholder Representative Supervisor of
the Company were approved at the extraordinary general
meeting of the Company held on 21 August 2024 (the “EGM”).
Meanwhile, Mr. Luo Laifeng (“Mr. Luo”) has been elected
as an Employee Representative Supervisor by the employee
representatives of the Company democratically. Terms ofoffice of the above Director and Supervisors commencefrom 21 August 2024 until the annual general meeting of theCompany for the year 2025 to be held in year 2026. Madam
Huang has been elected as the Chairlady of the eighth
session of the Supervisory Committee at a meeting of theSupervisory Committee held on 21 August 2024, with a termcommencing from 21 August 2024 until the annual general
meeting of the Company for the year 2025 to be held in year
2026. In addition, Madam Han Fang (“Madam Han”) and
Mr. Zhang Jianbin (“Mr. Zhang”) resigned from the positionas Supervisors due to changes in work arrangement.
The resignation of Madam Han takes effect on the date ofelection of the new Shareholder Representative Supervisor
at the EGM. The resignation of Mr. Zhang takes effect on
the date of election of the new Employee Representative
Supervisor by the employee representatives of the Company
democratically.
The changes in the biographical information relating to
the Directors and Supervisors of the Company since thepublication of the 2023 Annual Report are set out below:
Mr. Li Jun, an Executive Director of the Company, currently
serves as the President of China Youth Entrepreneurs
Association, and he no longer serves as a Deputy Director
General of China Aerospace Information and Satellite
Internet Innovation Alliance. Mr. Ng Kar Ling Johnny, anIndependent Non-Executive Director of the Company, nolonger serves as an Independent Non-Executive Director of
China Petroleum & Chemical Corporation which is listed on
the HKSE and the SSE.
Save as stated above, there is no other information of the
Directors or Supervisors of the Company required to bedisclosed pursuant to Rule 13.51B(1) of the Listing Rules.
The biographical details of the Directors, Supervisors andsenior management are available on the website of theCompany (www.chinatelecom-h.com).

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Interim Report 2024 China Telecom Corporation Limited

SECTION IV CORPORATE GOVERNANCE REPORT

3. PROPOSAL FOR PROFIT DISTRIBUTION OR CONVERSION OF CAPITALRESERVE
The half-year proposal for profit distribution or conversion of capital reserve
Whether distributed or capitalised

Yes

Number of bonus shares for every 10 shares (share)–

Dividend amount per 10 shares (RMB) (pre-tax)
Number of shares capitalised for every 10 shares (share)

1.671
–

Description on the proposal for profit distribution or conversion of capital reserve
After fully considering the returns to shareholders, the Company’s profitability, cash flow level and capital needs for
future development, the thirteenth meeting of the eighth session of the Board of the Company decided to distributethe interim dividend for 2024 to all shareholders in the aggregate amount of RMB15.29 billion, representing over 70%of the profit attributable to equity holders of the Company in the amount of RMB21.81 billion. Based on the total sharecapital registered on the record date for the dividend distribution, and based on the Company’s total share capital of
91,507,138,699 shares as at 30 June 2024, a dividend of RMB0.1671 per share (equivalent to HK$0.182289) (pre-tax) was
declared and will be paid to all shareholders. In case of any change in the total number of issued share capital of theCompany before the record date for the implementation of the dividend distribution, the total distribution amount willremain unchanged, and the distribution amount per share will be adjusted accordingly.
The Board has been authorised by the annual general meeting for the year 2023 to decide the profit distribution
proposal and the resolution for the proposed interim dividend was considered and approved at the thirteenth meetingof the eighth session of the Board of the Company on 20 August 2024.

034

China Telecom Corporation Limited Interim Report 2024

SECTION IV CORPORATE GOVERNANCE REPORT

4. EQUITY INCENTIVE PLAN,EMPLOYEE STOCK OWNERSHIP
PLAN OR OTHER EMPLOYEEINCENTIVE MEASURES OF THE
COMPANY AND THEIR IMPACT
The Company implemented the second phase of shareappreciation rights scheme in 2021 to provide mid – to longterm incentives for key personnel (excluding the Executive
Directors, Non-Executive Directors, Independent NonExecutive Directors, Supervisors and senior management of
the Company).
Firstly, share appreciation rights are distributed basedon contribution, adhering to the value-oriented principle
and tilting towards units with remarkable high-quality
development. Secondly, share appreciation rights are
distributed based on potential, which adheres to thedevelopment orientation and tilts to the key areas of“Cloudification and Digital Transformation” and highend and high-quality talents. Thirdly, share appreciationrights are granted based on performances. The Company
adheres to the performance-oriented principle and closely
links the number of rights exercised with the Company’s
performance and employees’ individual performance,
and imposes penalties for failure to achieve performancetargets.
The scheme does not involve the grant of shares or othersecurities of the Company or any of its principal subsidiaries(including the grant of options for the purchase of any ofsuch shares or securities) and therefore, it does not fallwithin the scope of, and is not subject to, the requirements
under Chapter 17 of the Listing Rules.

5. COMPLIANCE WITH THE
CORPORATE GOVERNANCE CODE
The Company attaches great importance to corporate
governance. We continued to make efforts in improving theCompany’s internal control mechanisms, strengthening
information disclosure and enhancing the Company’stransparency, continuously developing corporate
governance practices and protecting shareholders’ interests
to the maximum degree.
The roles of Chairman and Chief Executive Officer of theCompany were performed by the same individual, for thesix-month period ended 30 June 2024. In the Company’s
opinion, through supervision by the Board of Directors
and Independent Non-Executive Directors, with effective
control of the Company’s internal check and balancemechanism, the same individual performing the roles of
Chairman and Chief Executive Officer can enhance theCompany’s efficiency in decision-making and execution andeffectively capture business opportunities. Many leadinginternational corporations around the world also have
similar arrangements.
Save as stated above, the Company has been in compliancewith all the code provisions under the Corporate
Governance Code as set out in Appendix C1 of the Listing
Rules throughout the six-month period ended 30 June 2024.

Interim Report 2024 China Telecom Corporation Limited

035

SECTION V ENVIRONMENTAL AND
SOCIAL RESPONSIBILITIES

1. ENVIRONMENTAL
INFORMATION(1) DESCRIPTION OF ENVIRONMENTAL
PROTECTION OF THE COMPANY OTHER
THAN KEY POLLUTANT DISCHARGINGUNITSThe Company and its subsidiaries are not the key pollutant
discharging units announced by the environmental
protection department. The Company and its subsidiaries
earnestly implement the Environmental Protection Law of
the People’s Republic of China, the Law on the Prevention
and Control of Environment Pollution Caused by Solid
Wastes of the People’s Republic of China, the Law of thePeople’s Republic of China on Prevention and Control of
Water Pollution, the Law of the People’s Republic of China
on the Prevention and Control of Atmospheric Pollution
and other environmental protection laws and regulationsin their daily production and operation. The production andoperation activities are in compliance with the relevant
national environmental protection requirements.

(2) RELEVANT INFORMATION ON
PROTECTING THE ECOLOGY,
PREVENTING AND CONTROLLINGPOLLUTION, AND FULFILLINGENVIRONMENTAL RESPONSIBILITIESThe Company relies on its digital technology advantages
to actively empower ecological environment protection as
well as pollution prevention and control, promoting theconstruction of a beautiful China. In the field of ecologicalenvironment protection, it utilises digital platform
technology to assist Hainan in building an integrated big
data regulatory platform for the ecological environment,enhances ecological environment monitoring capabilities
through informatisation and intelligence, and realises
interconnection and sharing of various monitoring data
to improve the quality of the ecological environment. In
the field of pollution prevention and control, it uses a newgeneration of digital intelligence technology to build anenvironmental protection cloud platform, helping multiple
provinces to significantly improve the level of air pollution
prevention and control.

(3) MEASURES TAKEN TO REDUCE
CARBON EMISSIONS DURING THE
REPORTING PERIOD AND THEIREFFECTSThe Company continuously implements various energy
saving and emission reduction measures to reduce its
carbon emissions. In terms of cloud-network infrastructure
construction, the Company promoted the construction anddeployment of national green datacentres, new generationof AIDC, ROADM all-fibre network and new metropolitan
network comprehensive carrying capacity. In terms ofcloud-network operation, the Company expanded AI energysaving coverage and accelerated the green renovation of
the facility rooms, the retirement of old equipment andthe minimalist base station transformation. In terms ofthe consumption of green electricity, the Company actively
participated in green electricity acquisition, constructed
distributed energy and carried out energy cooperation.
At the same time, it continuously strengthened sci-techinnovation, enhanced research and application of key coretechnologies in areas such as green and low-carbon as wellas intelligent computing power efficiency and establisheda standard system for green datacentres. In the first halfof 2024, the carbon emissions per unit of total volume oftelecommunications services maintained a double-digit
decrease year-on-year.

036

China Telecom Corporation Limited Interim Report 2024

SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES

2. CONSOLIDATION AND
EXPANSION OF ACHIEVEMENTS
IN POVERTY ALLEVIATION ANDPROSPERITY OF RURAL VILLAGESIn the first half of 2024, the Company learned and applied
the experience of the “Ten Million Projects”, highlighting
the 3 key points of rural development, rural construction
and rural governance, and implementing 5 major projectsof technology empowerment, industrial development,
consumption assistance, talent training and brand building,to help yield new results in poverty alleviation and reach
new heights in rural revitalisation.
The Company maintained its efforts in poverty alleviation,
steadily advancing various targeted support work. It
directly purchased and assisted in selling agricultural
products of RMB246.20 million, organised various typesof talent training activities for 23,271 person-times andcomprehensively promoted the smart and intelligent
upgrade of digital villages, empowering rural industrial
revitalisation, talent revitalisation, cultural revitalisation,
ecological revitalisation and organisational revitalization
with technology.
The Company successfully completed all tasks for thetargeted support assessment in 2023, and has achieved
the highest rating for 6 consecutive years in the review andassessment of targeted support carried out by central units,
ranking in the top ten in central state-owned enterprises.
Note:

This section contains the environmental and social responsibilities
work of China Telecommunications Corporation, the Company’scontrolling shareholder, in the first half of 2024.

037Interim Report 2024 China Telecom Corporation Limited

SECTION VI SIGNIFICANT EVENTS

1. PERFORMANCE OF UNDERTAKINGS
THE ULTIMATE CONTROLLER, SHAREHOLDERS, RELATED PARTIES, ACQUIRERS OF THE
COMPANY, THE COMPANY, AND OTHER RELEVANT PARTIES OF THE UNDERTAKINGS
DURING OR SUBSISTING TO THE REPORTING PERIOD
Specificreasons for
Whether the failure to
performed timely
timely and honor theundertaking
strictly

Further plansin the eventof failing totimelyhonor theundertakings

Content ofundertakings

Time ofundertaking

Whether
there is aterm forTerm forperformance undertakings

Controlling shareholder

Restrictions on thecirculation of theshares and theshareholders’commitment tovoluntary lock-up
their shares

2021–08–20

Yes

36 months from Yes
the date of A
Share listing of
the Company

N/A

N/A

RestrictedtradablesharesControlling shareholder,
Guangdong Rising

Undertakings on
intention to holdshares and intention
to sell shares

2021–08–20

Yes

Long-term

Yes

N/A

N/A

Resolving peercompetition

Controlling shareholder

Non-competition
undertaking

2021–08–20

Yes

Long-term

Yes

N/A

N/A

Resolving
related party
transactions

Controlling shareholder,
Guangdong Rising

Undertakings to regulate 2021–08–20
and reduce related
party transactions

Yes

Long-term

Yes

N/A

N/A

Background ofundertaking

Type ofundertakings

Undertakings
related to theinitial public
offering

RestrictedtradablesharesUndertaking party

Controlling shareholder
Resolution of
defects inproperty rightsof landLoss-bearing
commitment for
defects in property
rights of land

2021–08–20

Yes

Long-term

Yes

N/A

N/A

OthersControlling shareholder

Commitment to long- 2021–08–20
term use of trademark
licenseYesLong-term

Yes

N/A

N/A

OthersControlling shareholder, Undertakings to stabilise 2021–08–20
the share price
the Company, directors
and senior management
other than independent
directors and directors
who do not receive
remuneration from theCompany

Yes

Within three years Yesfrom the date of
A Share listing of
the Company

N/A

N/A

038

China Telecom Corporation Limited Interim Report 2024

SECTION VI SIGNIFICANT EVENTS

Background ofundertaking

OthersType ofundertakings

Undertaking party

Content ofundertakings

Time ofundertaking

Whether
there is aterm forTerm forperformance undertakings

Specificreasons for
Whether the failure to
performed timely
timely and honor thestrictlyundertaking

Further plansin the eventof failing totimelyhonor theundertakings

OthersThe Company, controlling Undertaking to adopt
2021–08–20
shareholder, directors
remedial measuresand senior management for dilution of theimmediate returns by
the issuance of share

Yes

Long-term

Yes

N/A

N/A

OthersThe Company, controllingshareholder, directors,
supervisors and senior
management

Undertaking that there 2021–08–20
is no false record,
misleading statement,or material omission
in the prospectus

Yes

Long-term

Yes

N/A

N/A

OthersThe Company, controllingshareholder, directors,
supervisors and senior
management

Undertaking on binding 2021–08–20
measures for the
failure to perform thecommitment

Yes

Long-term

Yes

N/A

N/A

OthersThe Company

Undertaking on
disclosure ofshareholders’information

2021–08–20

Yes

Long-term

Yes

N/A

N/A

Dividend

The Company

Undertaking on the profit 2021–08–20
distribution policy
and the arrangement
in relation to theaccumulated profits

Yes

Long-term

Yes

N/A

N/A

039

Interim Report 2024 China Telecom Corporation Limited

SECTION VI SIGNIFICANT EVENTS

2. MATERIAL CONTRACTS AND PERFORMANCE
MATERIAL GUARANTEES PERFORMED AND NOT YET FULFILLED DURING THE
REPORTING PERIOD
Unit: yuan Currency: Renminbi
External guarantees provided by the Company (excluding guarantees provided to its subsidiaries)
Total amount of guarantees incurred during the Reporting Period(excluding those provided to subsidiaries)–

Total balance of guarantees as at the end of the Reporting Period(A) (excluding those provided to subsidiaries)–

Guarantees provided by the Company to its subsidiaries
Total amount of guarantees provided to subsidiaries incurred during the Reporting Period

17,813,420.70

Total balance of guarantees provided to subsidiaries as at the end of the Reporting Period (B)44,058,819.19

Aggregate guarantees of the Company (including those guarantees provided to its subsidiaries)
Aggregate amount of guarantees (A + B)
Percentage of total aggregate amount of guarantee to net assets of the Company (%)

44,058,819.19
0.0096

Representing:Amount of guarantees provided for shareholders, ultimate controller and theirrelated parties (C)–Amount of debt guarantees directly or indirectly provided to guaranteed parties withgearing ratio over 70% (D)–Amount of total guarantee exceeding 50% of net assets (E)–Aggregate amount of the above three guarantees (C + D + E)–

Explanation on the potential joint and several liability for outstanding guarantees

Nil

Clarification of guarantee

The external guarantees provided
by the Company were nonfinancing guarantees provided by
China Telecom Group Finance Co.,
Ltd. and China Telecom Global
Limited, both being subsidiariesof the Company, to wholly-owned
subsidiaries of the Company. If theamount of the above-mentioned
external guarantees involves foreign
currency, it would be converted at
the median rate for the exchange
rate of RMB announced by the
People’s Bank of China on 28 June
2024.

040

China Telecom Corporation Limited Interim Report 2024

SECTION VI SIGNIFICANT EVENTS(1) Description of guarantees during theReporting Period
According to the needs of daily production and operation,
China Telecom Finance, China Telecom Global and China
Telecom Middle East FZ-LLC, all being subsidiaries of
the Company, contemplated to provide guarantees towholly-owned subsidiaries of the Company in 2023, in an
aggregate amount of not exceeding RMB393.50 million (orequivalent foreign currency). The guarantee limit is valid
until 31 March 2024. The guaranteed entities are all whollyowned subsidiaries of the Company with asset-liability ratio
not exceeding 70%. In accordance with relevant laws andregulations, China Telecom Finance, China Telecom Global
and China Telecom Middle East FZ-LLC have separately
performed relevant internal decision-making proceduresfor the above guarantees. For details, please refer to the“Announcement on the Plan for External Guarantee for2023 of China Telecom Corporation Limited” disclosedby the Company on 30 March 2023. Within the scope of
the above guarantee limits, China Telecom Finance, asubsidiary of the Company, entered into an agreementof guarantee with China Telecom Digital Intelligence
Technology on 29 February 2024, pursuant to which China
Telecom Finance agreed to provide guarantee to China
Telecom Digital Intelligence Technology with a limit of not
more than RMB300 million. During the Reporting Period
and within the scope of the guarantee limit under theagreement of guarantee described above, China Telecom
Finance provided three guarantees to China Telecom Digital
Intelligence Technology, details of which are set out inthe section below headed “(2) the progress of guarantees
during the Reporting Period” in this report.

According to the needs of daily production and operation,
China Telecom Finance and China Telecom Global, bothbeing subsidiaries of the Company, contemplated to provide
guarantees to wholly-owned subsidiaries of the Company in2024, in an aggregate amount of not exceeding RMB479.20
million (or equivalent foreign currency). The guarantee limit
is valid until 31 March 2025. The guaranteed entities are
all wholly-owned subsidiaries of the Company with assetliability ratio not exceeding 70%. In accordance with relevantlaws and regulations, the guarantors have separately
performed relevant internal decision-making proceduresfor the above guarantees. For details, please refer to the“Announcement on the Plan for External Guarantee for2024 of China Telecom Corporation Limited” disclosed by
the Company on 26 March 2024.

Interim Report 2024 China Telecom Corporation Limited

041

SECTION VI SIGNIFICANT EVENTS(2) The progress of guarantees during the Reporting Period
In the second quarter of 2024 and within the scope of the aggregate guarantee limit described above, China Telecom
Finance provided four guarantees totaling RMB17.2322 million to China Telecom Digital Intelligence Technology and China
Telecom Digital City Technology Co., Ltd. The details of the guarantees are as follows:

Guarantor

China Telecom Group
Finance Co., Ltd.

Note:

Guaranteed party

Amount ofguarantee(RMB)

Guarantee period

Type ofguarantee

Method ofguarantee

China Telecom Digital
Intelligence Technology
Co., Ltd.
Anhui Branch

89,000.00

19 April 2024 to
13 August 2027

Non-financing
guarantee

Quality guarantee

China Telecom Digital
Intelligence Technology
Co., Ltd.

39,595.00

29 April 2024 to
7 May 2024

Non-financing
guarantee

Performance
guarantee

China Telecom Digital
Intelligence Technology
Co., Ltd.
Anhui Branch

2,103,600.00

24 May 2024 to
25 May 2024

Non-financing
guarantee

Advance payment
guarantee

China Telecom Digital City
Technology Co., Ltd.

15,000,000.00

24 June 2024 to
23 June 2025

Non-financing
guarantee

Performance
guarantee

For details of the progress of guarantees during the first quarter of 2024, please refer to the 2024 First Quarter Report of China Telecom Corporation
Limited published on 23 April 2024.

(3) The cumulative amount of guarantees and the amount of overdue guarantees
As at the end of the Reporting Period, the balance of external guarantees provided by the Company and its subsidiaries
was RMB44.0588 million, all of which were guarantees provided by subsidiaries of the Company to other wholly-owned
subsidiaries of the Company. The Company did not provide guarantees to its subsidiaries or third parties, and there was nooverdue guarantee.
Any amount of the above-mentioned external guarantees involving foreign currency is converted at the median rate of theexchange rate of RMB announced by the People’s Bank of China on 28 June 2024.

042

China Telecom Corporation Limited Interim Report 2024

SECTION VII CHANGES IN SHARES AND
INFORMATION ON SHAREHOLDERS

1. CHANGES IN SHARE CAPITAL(1) CHANGES IN SHARE
The total number of shares and share capital structure of the Company remained unchanged during the Reporting Period.

(2) CHANGES IN SHARES WITH LOCK-UP RESTRICTIONS
Shares with lock-up restrictions of the Company remained unchanged during the Reporting Period.
Huawei Technologies Co., Ltd, Oriental Pearl Group Co., Ltd., Sangfor Technologies Inc., Shanghai Bilibili Technology Co.,
Ltd. and DBAPP Security Co., Ltd. held an aggregate of 662,250,000 A shares with lock-up restrictions of the Company(percentage of shareholding amounted to 0.7237%) which were released for trading on 20 August 2024. According to therestrictions on the circulation of the shares and the shareholders’ commitment to voluntary lock-up their shares, the lockup period for the shares held by China Telecommunications Corporation prior to the Company’s initial public offering has
been extended by 6 months to 20 February 2025. For details, please refer to the “Announcement on the Release for Tradingof Partial Lock-up Shares of the Initial Public Offering of China Telecom Corporation Limited” disclosed on 13 August 2024.

2. INFORMATION ON SHAREHOLDERS(1) TOTAL NUMBER OF SHAREHOLDERS
Total number of ordinary shareholders as at the end of the Reporting Period
Total number of holders of preference shares with reinstated voting rights
as at the end of the Reporting Period

271,104
N/A

043

Interim Report 2024 China Telecom Corporation Limited

SECTION VII CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS(2) SHAREHOLDINGS OF THE TOP TEN SHAREHOLDERS AND THE TOP TENSHAREHOLDERS OF TRADABLE SHARES (OR SHAREHOLDERS OF UNRESTRICTEDSHARES) AS AT THE END OF THE REPORTING PERIOD
Unit: shares
Shareholdings of the top ten shareholders (excluding shares loaned through refinancing)

Name of shareholder (Full name)

Changesduringthe Reporting
PeriodNumber ofshares held at
the end of the Percentage
Reporting Period(%)

Number ofshares heldwith lock-up
restrictions

Pledge, marking or
freezing conditions
Statusof shares
Quantity

Nature ofshareholder

China Telecommunications
Corporation–

58,476,519,174

63.90

57,377,053,317

Nil–State-owned
legal person

HKSCC Nominees Limited

1,417,839

13,847,399,317

15.13

–

Nil

–

Foreign legal
person(420,000,000)

4,794,082,653

5.24

–

Nil

–

State-owned
legal person

Zhejiang Provincial Financial
Development Co., Ltd.

–2,137,473,626

2.34

–

Nil

–

State-owned
legal person

Jiangsu Guoxin Group Limited–

957,031,543

1.05

–

Nil

–

State-owned
legal person

Fujian Investment & Development
Group Co., Ltd.

–920,294,182

1.01

–

Nil

–

State-owned
legal person

China Life Insurance Company
Limited – Traditional – Generalinsurance products – 005L –CT001 Shanghai

19,654,944

786,269,672

0.86

–

Nil

–

Unknown–

441,501,000

0.48

–

Nil

–

State-owned
legal person

Guangdong Rising Holdings Group
Co., Ltd. – Special account forpledge of non-public issuance of
exchangeable company bonds(first phase) for professional
investors in 2024

420,000,000

420,000,000

0.46

–

Pledge420,000,000

Unknown

Guangdong Rising Holdings Group
Co., Ltd. – Special account forpledge of non-public issuance of
exchangeable company bonds(first phase) for professional
investors in 2023–

400,000,000

0.44

–

Pledge400,000,000

Unknown

Guangdong Rising Holdings Group
Co., Ltd.

State Grid Yingda International
Holdings Group Co., Ltd.

044

China Telecom Corporation Limited Interim Report 2024

SECTION VII CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS

Shareholdings of the top ten shareholders without lock-up restriction (excluding shares loaned through refinancing)

Name of shareholder

Number of
tradable shares
held without
lock-up
restriction

Class

Class and number of shares
Quantity

HKSCC Nominees Limited

13,847,399,317

Overseas-listed
foreign-invested
shares

13,847,399,317

Guangdong Rising Holdings Group Co., Ltd.

4,794,082,653

RMB ordinary shares

4,794,082,653

Zhejiang Provincial Financial Development Co., Ltd.

2,137,473,626

RMB ordinary shares

2,137,473,626

China Telecommunications Corporation

1,099,465,857

RMB ordinary shares

1,099,465,857

Jiangsu Guoxin Group Limited

957,031,543

RMB ordinary shares

957,031,543

Fujian Investment & Development Group Co., Ltd.

920,294,182

RMB ordinary shares

920,294,182

China Life Insurance Company Limited – Traditional– General insurance products – 005L – CT001
Shanghai

786,269,672

RMB ordinary shares

786,269,672

State Grid Yingda International Holdings Group Co.,Ltd.

441,501,000

RMB ordinary shares

441,501,000

Guangdong Rising Holdings Group Co., Ltd. –Special account for pledge of non-public issuanceof exchangeable company bonds (first phase) for
professional investors in 2024

420,000,000

RMB ordinary shares

420,000,000

Guangdong Rising Holdings Group Co., Ltd. –Special account for pledge of non-public issuanceof exchangeable company bonds (first phase) for
professional investors in 2023

400,000,000

RMB ordinary shares

400,000,000

Explanation on the securities account designatedfor share repurchase of the top ten shareholders

N/A

Explanation on the voting rights entrusted by or
waived by the above shareholders

N/A

Description of connected relationship or acting inconcert among the aforementioned shareholders

The Company is not aware of any connected relationship among
the aforementioned shareholders or whether they act in concert.

Description of the holders of preference shares withrestored voting rights and their shareholding

N/A

045

Interim Report 2024 China Telecom Corporation Limited

SECTION VII CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS

Shareholdings of the top ten shareholders with lock-up restrictions
Unit: shares

No.

Name of shareholders
with lock-up restrictions

Number ofshares heldwith lock-up
restrictions

Listing and trading of shareswith lock-up restrictions
Number of
new sharesavailable
for listing
Date of listing
and trading
and trading

Lock-up restrictions

1

China Telecommunications
Corporation

57,377,053,317

2025-02-20–

Lock-up for 42 months fromthe date of listing2

Huawei Technologies Co., Ltd

220,750,000

2024-08-20–

Lock-up for 36 months fromthe date of listing3

Oriental Pearl Group Co., Ltd.

110,375,0002024-08-20–

Lock-up for 36 months fromthe date of listing

4

Sangfor Technologies Inc.

110,375,0002024-08-20–

Lock-up for 36 months fromthe date of listing

5

Shanghai Bilibili Technology Co.,Ltd.

110,375,0002024-08-20–

Lock-up for 36 months fromthe date of listing

6

DBAPP Security Co., Ltd.

110,375,0002024-08-20–

Lock-up for 36 months fromthe date of listing

Description of connected relationshipor acting in concert among the
aforementioned shareholders
Note:

The Company is not aware of any connected relationship among the aforementioned
shareholders or whether they act in concert.

Huawei Technologies Co., Ltd, Oriental Pearl Group Co., Ltd., Sangfor Technologies Inc., Shanghai Bilibili Technology Co., Ltd. and DBAPP Security
Co., Ltd. held an aggregate of 662,250,000 A shares with lock-up restrictions of the Company (percentage of shareholding amounted to 0.7237%)
which were released for trading on 20 August 2024. According to the restrictions on the circulation of the shares and the shareholders’ commitment
to voluntary lock-up their shares, the lock-up period for the shares held by China Telecommunications Corporation prior to the Company’s initialpublic offering has been extended by 6 months to 20 February 2025. For details, please refer to the “Announcement on the Release for Trading ofPartial Lock-up Shares of the Initial Public Offering of China Telecom Corporation Limited” disclosed on 13 August 2024.

(3) STRATEGIC INVESTORS OR OTHER LEGAL PERSONS WHO BECAME TOP TENSHAREHOLDERS DUE TO ALLOTMENT OF NEW SHARES
Names of strategic investors orother legal persons

Agreed shareholding start date

Agreed shareholding
end date

State Grid Yingda International HoldingsGroup Co., Ltd.

20 August 2021–

Description of agreed term of shareholding
in respect of strategic investors and general
legal persons’ participation in placing of newsharesLock-up for 12 months from the date of listing, and the lock-up was
released on 22 August 2022.

046

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OFFINANCIAL POSITION (UNAUDITED)at 30 June 2024 (Amounts in million)

Notes

30 June
2024
RMB

31 December
2023
RMB

400,504
86,98672,18529,92521,50843,176383

409,943
72,23876,90829,92322,702
43,158397

938
664
14,802

1,426
1,347
9,909

671,071

667,951

4,664
106
55,734
6,017
32,64525,68275,072

3,417
140
32,2104,665
35,58010,80581,046

199,920

167,863

870,991

835,814ASSETS
Non-current assets
Property, plant and equipment, net
Construction in progress
Right-of-use assets
Goodwill
Intangible assets
Interests in associates and joint ventures
Financial assets at fair value through profit or loss
Equity instruments at fair value through other comprehensive
incomeDeferred tax assets
Other assets

5
5

6
22
22
7

Total non-current assets
Current assets
Inventories
Income tax recoverable
Accounts receivable, net
Contract assets
Prepayments and other current assets
Short-term bank deposits and restricted cash
Cash and cash equivalents
Total current assets
Total assets

89Interim Report 2024 China Telecom Corporation Limited

047

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OFFINANCIAL POSITION (UNAUDITED)at 30 June 2024 (Amounts in million)

30 June
2024
RMB

31 December
2023
RMB

2,645
1,051
162,739
86,91456,763
4,230
13,632

2,867
1,133
145,872
74,26065,417488
13,399Total current liabilities

327,974

303,436

Net current liabilities(128,054)(135,573)

Total assets less current liabilities

543,017532,378

5,824
38,25030,6207,649

5,142
42,65031,025
6,394

82,343

85,211

410,317388,647

91,507364,772

91,507351,419456,279
4,395

442,9264,241

460,674

447,167

870,991

835,814

Notes
LIABILITIES AND EQUITYCurrent liabilities
Short-term debts
Current portion of long-term debts
Accounts payable
Accrued expenses and other payables
Contract liabilities
Income tax payable
Current portion of lease liabilities

Non-current liabilities
Long-term debts
Lease liabilities
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Reserves
Total equity attributable to equity holders of the Company
Non-controlling interests
Total equity
Total liabilities and equity

10
10
11

10

The notes on pages 54 to 76 form part of the condensed consolidated interim financial information.

048

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME (UNAUDITED)
for the six-month period ended 30 June 2024 (Amounts in million except for per share data)

Notes

Six-month period
ended 30 June
2024
RMB

2023
RMB

Operating revenues

12

268,011

260,664

Operating expenses
Depreciation and amortisation
Network operations and support
Selling, general and administrative
Personnel expenses
Other operating expenses

13
14
15
16

(49,532)(80,131)(33,090)(50,566)(27,432)(47,838)(76,052)(32,839)(48,998)(29,429)(240,751)(235,156)

27,260
(250)
84
1,145

25,508
(483)
159
996

28,239(6,273)

26,180(6,006)

21,966

20,174

(519)

89

131

(24)

(388)

65

42

201

–

2

42

203

(346)

268

21,62020,442

Total operating expenses
Operating profit
Net finance costs
Investment income and others
Share of profits of associates and joint ventures
Profit before taxation
Income tax
Profit for the period
Other comprehensive income for the period
Items that will not be reclassified subsequently to profit or loss:
Change in fair value of investments in equity instruments atfair value through other comprehensive income
Deferred tax on change in fair value of investments in equity
instruments at fair value through other comprehensive income

Items that may be reclassified subsequently to profit or loss:
Exchange difference on translation of financial statements ofsubsidiaries outside mainland China
Share of other comprehensive income of associates and joint
ventures

Other comprehensive income for the period, net of tax
Total comprehensive income for the period

1718Interim Report 2024 China Telecom Corporation Limited

049

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME (UNAUDITED)
for the six-month period ended 30 June 2024 (Amounts in million except for per share data)

Six-month period
ended 30 June
2024
RMB

2023
RMB

Profit attributable toEquity holders of the Company
Non-controlling interests

21,812
154

20,153
21

Profit for the period

21,966

20,174

Total comprehensive income attributable toEquity holders of the Company
Non-controlling interests

21,466
154

20,42121

Total comprehensive income for the period

21,62020,442

Notes

Basic earnings per share (RMB)

20

0.24

0.22

Diluted earnings per share (RMB)

20

0.24

0.22

Number of shares (in million)

20

91,50791,507

The notes on pages 54 to 76 form part of the condensed consolidated interim financial information.

050

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OFCHANGES IN EQUITY (UNAUDITED)
for the six-month period ended 30 June 2024 (Amounts in million)

Attributable to equity holders of the Company
SharecapitalRMB

Capitalreserve
RMB

Share
premium
RMB

Surplusreserves
RMB

Generalrisk
reserve
RMB

Balance as at 1 January 2023

91,507

19,71047,68784,901

183

126

Profit for the period
Other comprehensive income forthe period

–

–

–

–

–

–

–

–

–

–

–

–

–
–

13
–

Balance as at 30 June 2023

91,507

Balance as at 1 January 2024

Notes

Total comprehensive income forthe period
Share of associates and joint ventures’
other changes in reserves
Dividends

19

Profit for the period
Other comprehensive income forthe period
Total comprehensive income forthe period
Share of associates and joint ventures’
other changes in reserves
Dividends
Balance as at 30 June 2024

19

Retainedearnings
RMB

Noncontrolling
Total interests
RMB
RMB

Total
equityRMB(458)

188,433

432,089

4,338

436,427––

20,153

20,15321

20,174

–

67

201

–

268

–

268

–

–

67

201

20,153

20,421

21

20,442

–
–

–
–

–
–

–
–

–
–

–
(6,955)13(6,955)––13(6,955)

19,72347,68784,901

183

193

(257)

201,631445,568

4,359

449,927

91,507

19,722

47,68787,761

387

504

(395)

195,753442,9264,241

447,167

–

–

–

–

–

–

–

21,812

21,812

154

21,966

–

–

–

–

–

(388)

42

–

(346)

–

(346)

–

–

–

–

–

(388)

42

21,812

21,466

154

21,620

–
–

123
–

–
–

–
–

–
–

–
–

–
–

–
(8,236)123(8,236)––123(8,236)

91,507

19,84547,68787,761

387

116

(353)

209,329456,279

4,395

460,674

Other Exchange
reserves reserve
RMB
RMB

The notes on pages 54 to 76 form part of the condensed consolidated interim financial information.

Interim Report 2024 China Telecom Corporation Limited

051

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (UNAUDITED)
for the six-month period ended 30 June 2024 (Amounts in million)

Six-month period
ended 30 June
2024
RMB

2023
RMB

58,70065,536(34,985)
(109)
(50)
706
58
6

(28,318)
(15)
(9)
200
1
54

(30)
(27,058)
7,308

(15)
(5,952)
1,105(b)(2,029)(6,100)

(b)

6,080

6,071

(50,103)(32,978)(6,556)
2,833(4,057)(7,082)–638(6,553)
2,071(5,791)(5,900)(1)(5,495)

(359)

268

Net cash used in financing activities(14,583)(21,401)

Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents as at 1 January
Effect of changes in foreign exchange rate

(5,986)
81,04612

11,157
72,46576

Cash and cash equivalents as at 30 June

75,072

83,698Notes
Net cash from operating activities
Cash flows used in investing activities
Capital expenditure
Purchase of investments
Payments for right-of-use assets
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of right-of-use assets
Proceeds from disposal of investments
Payments for equity instruments at fair value through othercomprehensive income
Purchase of bank deposits
Maturity of bank deposits
Short-term loans granted to China Telecom Group by Finance
Company
China Telecom Group’s repayments of short-term loans granted
by Finance Company(a)

Net cash used in investing activities
Cash flows used in financing activities
Repayments of principal of lease liabilities
Proceeds from bank and other loans
Repayments of bank and other loans
Payments of dividends
Distribution to non-controlling interests
Net deposits by China Telecom Group with Finance Company(Increase)/decrease in statutory deposit reserves placed by
Finance Company

(b)

052

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (UNAUDITED)
for the six-month period ended 30 June 2024 (Amounts in million)(a) RECONCILIATION OF PROFIT BEFORE TAXATION TO NET CASH FROMOPERATING ACTIVITIES
Six-month period
ended 30 June
2024
RMB

2023
RMB

28,23926,18049,532

47,838

3,863
25
(106)
(1,145)(1,042)
1,192
100
886

2,646
42
(159)
(996)
(1,039)
1,319
203
1,385

81,544

77,419(27,522)(1,453)(1,272)
(985)
108
603
6,147
10,931(8,661)(25,088)(666)(1,379)
1,123
(78)
(356)
9,891
14,113(8,230)Cash generated from operations
Interest received
Interest paid
Investment income received
Income tax paid

59,440992(1,162)
1,521(2,091)

66,749943(1,439)1,313(2,030)Net cash from operating activities

58,70065,536

Profit before taxation
Adjustment for:
Depreciation and amortisation
Impairment losses for financial assets and contract assets,
net of reversal
Write-down of inventories, net of reversal
Investment income and others
Share of profits of associates and joint ventures
Interest income
Net interest expense
Net foreign exchange gain or loss and others
Net loss on retirement and disposal of long-lived assets and others

Increase in accounts receivable
Increase in contract assets
Increase in inventories(Increase)/decrease in prepayments and other current assets
Decrease/(increase) in restricted cash
Decrease/(increase) in other assets
Increase in accounts payable
Increase in accrued expenses and other payables
Decrease in contract liabilities

Interim Report 2024 China Telecom Corporation Limited

053

SECTION VIII INTERIM FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (UNAUDITED)
for the six-month period ended 30 June 2024 (Amounts in million)(b) “Finance Company” refers to China Telecom Group Finance Co., Ltd., a subsidiary of the Company establishedon 8 January 2019, which provides capital and financial management services to the member units of China
Telecommunications Corporation, the parent and ultimate holding company of the Company. These transactions are
conducted on normal commercial terms or better.
China Telecommunications Corporation together with its subsidiaries other than the Group are referred to as “China
Telecom Group”.

(c) SIGNIFICANT NON-CASH TRANSACTIONS
For the six-month periods ended 30 June 2024 and 30 June 2023, the Group did not have significant non-cash
investing and financing activities, except for the additions of right-of-use assets and lease liabilities, and the additionsof equipment in instalment purchase of equipment.

The notes on pages 54 to 76 form part of the condensed consolidated interim financial information.

054

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

1. PRINCIPAL ACTIVITIESChina Telecom Corporation Limited (the “Company”) was incorporated in the People’s Republic of China (the “PRC”)
on 10 September 2002. The Company and its subsidiaries (hereinafter, collectively referred to as the “Group”) is aleading and large-scale full-service and integrated intelligent information services provider, providing its individual,
household, government and enterprise customers with integrated intelligent information services.

2. BASIS OF PREPARATIONThe condensed consolidated interim financial information has been prepared in accordance with International
Accounting Standard 34 (“IAS 34”), “Interim Financial Reporting ” issued by the International Accounting Standards
Board (the “IASB”) and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (the “Listing Rules”). The condensed consolidated interim financial information,
which was authorised for issuance by the Board of Directors on 20 August 2024, reflects the unaudited financial
position of the Group as at 30 June 2024 and the unaudited results of operations and cash flows of the Group for thesix-month period then ended, which are not necessarily indicative of the results of operations and cash flows expected
for the year ending 31 December 2024.
The preparation of condensed consolidated interim financial information in conformity with IAS 34, “Interim Financial
Reporting ”, requires management to make judgments, estimates and assumptions about the application of policies
and reported amounts of assets and liabilities, income and expenses on a year-to-date basis. Actual results may differ
from these estimates.
The condensed consolidated interim financial information contains condensed consolidated statement of financial
position, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes
in equity and condensed consolidated statement of cash flows and selected explanatory notes. The notes include an
explanation of events and transactions that are significant to an understanding of the changes in financial position andperformance of the Group since the 2023 annual financial statements. The condensed consolidated interim financial
information and notes thereon do not include all of the information required for a full set of financial statements
prepared in accordance with IFRS Accounting Standards. The condensed consolidated interim financial information
should be read in conjunction with the Company’s 2023 annual financial statements. The Group’s policies on financial
risk management were set out in the financial statements included in the Group’s 2023 Annual Report and there havebeen no significant changes in these policies for the six-month period ended 30 June 2024.
As at 30 June 2024, the total current liabilities of the Group had exceeded the total current assets by RMB128,054
million (31 December 2023: RMB135,573 million). Management of the Company has assessed the Group’s available
sources of funds as follows: 1) the Group’s continuous net cash inflow to be generated from its operating activities; 2)
the unutilised credit facilities amounting to RMB201,771 million (31 December 2023: RMB205,452 million); and 3) theGroup’s other available sources of financing from domestic banks in mainland China and other financial institutions
in view of the Group’s good credit history. Based on the above considerations, the Board of Directors is of the opinion
that the Group has sufficient funds to meet its working capital commitments, expected capital expenditure and debt
obligations. As a result, the condensed consolidated interim financial information of the Group for the six-month
period ended 30 June 2024 has been prepared on a going concern basis.

Interim Report 2024 China Telecom Corporation Limited

055

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

3. MATERIAL ACCOUNTING POLICY INFORMATIONThe condensed consolidated interim financial information is prepared on the historical cost basis as modified by therevaluation of certain financial instruments measured at fair value.
Other than changes in accounting policies resulting from application of amendments to IFRS Accounting Standards,
the accounting policies and methods of computation used in the condensed consolidated interim financial information
are the same as those followed in the preparation of the 2023 annual financial statements of the Group.

Application of amendments to IFRS Accounting Standards
In the current interim period, the Group has applied, for the first time, the following amendments to IFRS AccountingStandards issued by the IASB that are mandatorily effective for the current period:•

Amendments to IAS 1 “Presentation of Financial Statement ” – Classification of Liabilities as Current or Noncurrent•

Amendments to IAS 1 “Presentation of Financial Statement ” – Non-current Liabilities with Covenants•

Amendments to IFRS 16 “Leases ” – Lease Liability in a Sale and Leaseback•

Amendments to IAS 7 “Statement of Cash Flows ” and IFRS 7 “Financial Instruments: Disclosures ” – Supplierfinance arrangements

The application of the above amendments to IFRS Accounting Standards in the current period has had no material
effect on the Group’s condensed consolidated interim financial information.

056

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

4. SEGMENT REPORTING
An operating segment is a component of an entity that engages in business activities from which revenues are earned
and expenses are incurred, and is identified on the basis of the internal financial reports that are regularly reviewed by
the chief operating decision maker (“CODM”) in order to allocate resources and assess performance of the segment.
The Executive Directors of the Company have been identified as the CODM. For the periods presented, management
has determined that the Group has one operating segment as the Group is only engaged in the integrated
telecommunications business. The Group’s assets located outside mainland China and operating revenues derived
from activities outside mainland China are less than 10% of the Group’s assets and operating revenues, respectively.
No geographical area information has been presented as such amount is immaterial. No single external customer
accounts for 10% or more of the Group’s operating revenues.

5. PROPERTY, PLANT AND EQUIPMENT, NET AND CONSTRUCTION IN
PROGRESS
For the six-month period ended 30 June 2024, the Group acquired items of property, plant and equipment andconstruction in progress with an aggregate cost of RMB46,593 million (for the six-month period ended 30 June
2023: RMB41,614 million) and the depreciation of property, plant and equipment recognised in unaudited condensed
consolidated statement of comprehensive income was RMB37,287 million (for the six-month period ended 30 June
2023: RMB35,731 million).

Interim Report 2024 China Telecom Corporation Limited

057

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

6. INTERESTS IN ASSOCIATES AND JOINT VENTURES

Cost of investment in associates and joint ventures
Share of post-acquisition changes in net assets

30 June2024
RMB million

31 December
2023
RMB million

37,095
6,081

36,986
6,172

43,17643,158The Group’s interests in associates and joint ventures are accounted for under the equity method. Details of theGroup’s principal associates are as follows:

Name of company

Notes

China Tower Corporation Limited(i)

Shanghai Information Investment
Incorporation(ii)

Attributable
equity interest Principal activities
20.5% Construction, maintenance and operation ofcommunications towers as well as ancillaryfacilities
24.0% Information technology consulting services

Notes:(i)

China Tower Corporation Limited (“China Tower”) is established and operated in the PRC, and listed on the Main Board of The Stock Exchange
of Hong Kong Limited on 8 August 2018.

(ii)

Shanghai Information Investment Incorporation is established and operated in the PRC and is not traded on any stock exchange.

As at 30 June 2024, the fair value of investment in China Tower was RMB33,265 million (31 December 2023:
RMB26,816 million) based on its quoted market price, which was below its carrying amount by 17.0% (31 December
2023: 33.3%). The management of the Group performed an impairment assessment and determined the recoverable
amount of the investment based on the present value of expected future cash flows. The calculation has considered
pre-tax cash flow projections of China Tower in five years with an extrapolation made to perpetuity. The discountrate used in projecting present value of future cash flows was based on cost of capital used to evaluate investmentsof similar nature in mainland China. Management judgement is required in estimating the future cash flows ofChina Tower. The key assumptions are determined with reference to external sources of information. Based on the
management’s assessment result, there was no impairment of the investment as at 30 June 2024.

058

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

7. OTHER ASSETS

Notes
Term deposits
Contract costs
Other long-term prepaid expenses and receivables

(i)
(ii)

30 June2024
RMB million

31 December
2023
RMB million

5,153
1,148
8,501

48
1,486
8,375

14,802

9,909

Notes:(i)

Contract costs capitalised as at 30 June 2024 and 31 December 2023 mainly relate to the direct cost of the provision of wireline terminals to
subscribers for the provision of Wireline and Smart Family services of the Group. The amount of capitalised costs recognised in profit or loss forthe six-month period ended 30 June 2024 was RMB602 million (for the six-month period ended 30 June 2023: RMB781 million). There was no
impairment in relation to the opening balance of capitalised costs or the costs capitalised during this period.

(ii)

Other long-term prepaid expenses and receivables mainly include prepayments of construction and materials, etc.

8. ACCOUNTS RECEIVABLE, NET
Accounts receivable, net, are analysed as follows:
30 June2024
RMB million

31 December
2023
RMB million

Third parties
China Telecom Group
China Tower
Other telecommunications operators in the PRC

64,079
2,370
33
1,241

37,861
1,670
24
893

Less: Allowance for credit losses

67,723(11,989)

40,448(8,238)55,73432,210Interim Report 2024 China Telecom Corporation Limited

059

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

8. ACCOUNTS RECEIVABLE, NET (continued)
Ageing analysis of accounts receivable from telephone and Internet subscribers based on the billing dates is asfollows:
30 June2024
RMB million

31 December
2023
RMB million

Current, within 1 month
1 to 3 months
4 to 6 months
7 to 12 months
Over 12 months

9,418
3,811
1,491
1,535
2,538

6,073
2,554
905
1,469
1,604

Less: Allowance for credit losses

18,793(5,587)

12,605(3,944)

13,206

8,661

Ageing analysis of accounts receivable from other telecommunications operators and enterprise customers based ondates of rendering of services is as follows:
30 June2024
RMB million

31 December
2023
RMB million

Within 6 months
7 to 12 months
1 to 2 years
2 to 3 years
Over 3 years

34,491
6,224
5,203
1,634
1,378

17,601
5,540
2,663
913
1,126

Less: Allowance for credit losses

48,930(6,402)

27,843(4,294)42,52823,549

060

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

9. CASH AND CASH EQUIVALENTS

Cash at bank and in handTime deposits with original maturity within three months

30 June2024
RMB million

31 December
2023
RMB million

53,33021,74278,7402,306

75,072

81,04630 June2024
RMB million

31 December
2023
RMB million

2,645

2,867

10. SHORT-TERM AND LONG-TERM DEBTS
Short-term debts comprise:

Loans from banks – unsecured

The weighted average interest rate of the Group’s total short-term debts as at 30 June 2024 was 2.7% (31 December
2023: 3.0%) per annum, and the loans bear interests at rates ranging from 1.5% to 3.3% (31 December 2023: 2.7% to3.4%) per annum, which are repayable within one year.

Interim Report 2024 China Telecom Corporation Limited

061

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

10. SHORT-TERM AND LONG-TERM DEBTS (continued)
Long-term debts comprise:

Note
Loans from banks – unsecured
Less: Current portion
Non-current portion(i)

30 June2024
RMB million

31 December
2023
RMB million

6,875(1,051)6,275(1,133)

5,824

5,142

Note:
(i)

The loans from banks include long-term RMB denominated government loans with below-market interest rates ranging from 1.08% to 1.20%
per annum obtained by the Group through banks (the “Low-interest Loans”). The Group recognised the Low-interest Loans at their fair value
on initial recognition, and accreted the discount to profit or loss using the effective interest rate method. The difference between the fair value
and face value of the Low-interest Loans was recognised as government grants in accrued expenses and other payables and other non-current
liabilities.
As at 30 June 2024, the loans from banks bear interests at contractual rates ranging from 1.08% to 2.66% (31 December 2023: 1.08% to 2.60%)
per annum with maturities through 2036.

The Group’s short-term and long-term debts do not contain any financial covenants. As at 30 June 2024, the Group
had unutilised credit facilities amounting to RMB201,771 million (31 December 2023: RMB205,452 million).

062

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

11. ACCOUNTS PAYABLE
Accounts payable are analysed as follows:

Third parties
China Telecom Group
China Tower
Other telecommunications operators in the PRC

30 June2024
RMB million

31 December
2023
RMB million

120,974
30,6189,863
1,284

111,025
26,444
7,505
898

162,739

145,872

Amounts due to China Telecom Group and China Tower are payable in accordance with contractual terms which aresimilar to those offered by third parties.
Ageing analysis of accounts payable based on the due dates is as follows:

Due within 1 month or on demand
Due after 1 month but within 3 months
Due after 3 months but within 6 months
Due after 6 months

30 June2024
RMB million

31 December
2023
RMB million

39,88034,361
38,57349,92540,06830,85935,261
39,684

162,739

145,872

Interim Report 2024 China Telecom Corporation Limited

063

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

12. OPERATING REVENUES
Disaggregation of revenues

Notes
Type of goods or services
Service revenues
Mobile communications service revenues
Wireline and Smart Family service revenues
Industrial Digitalisation service revenues
Other service revenues
Sales of goods and others

Six-month period
ended 30 June
2024
2023
RMB million
RMB million

246,235
105,217
63,99373,7503,275
21,776

235,977
101,60762,02468,802
3,544
24,687

Total operating revenues

268,011

260,664

Revenue from customer contracts
Revenue from other sources and others

265,002
3,009

257,690
2,974

Total operating revenues

268,011

260,664

Timing of revenue recognition
A point in time
Over time

19,689248,322

22,619238,045

Total operating revenues

268,011

260,664

(i)
(ii)
(iii)
(iv)
(v)

Notes:(i)

Represent primarily the aggregate amount of mobile communications service fees, mobile Internet access service fees, and short messaging
service fees, etc., charged to customers for the provision of mobile services.

(ii)

Represent primarily the aggregate amount of wireline communications service fees, broadband Internet access service fees, e-Surfing HD
service fees and Smart Family applications service fees, etc., charged to customers for the provision of wireline services.

(iii)

Represent primarily the aggregate amount of fees charged to customers for the provision of Internet data centre services, cloud services, digitalplatform services, dedicated Internet access services, etc.

(iv)

Represent primarily the aggregate amount of revenues from property rental and other revenues.

(v)

Represent primarily revenues from sales of mobile terminal equipment as well as wireline communications equipment and government grants.

064

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

13. NETWORK OPERATIONS AND SUPPORT

Note
Operating and maintenanceUtility
Network resources usage and related fees
Others(i)

Six-month period
ended 30 June
2024
2023
RMB million
RMB million
52,381
9,350
15,304
3,096

48,463
9,325
14,707
3,557

80,131

76,052

Note:(i)

Network resources usage and related fees include fees in respect of the short-term leases and leases of low-value assets, variable lease
payments not depending on an index or a rate and fees for non-lease components in respect of communications towers and related assets
lease and the usage of network resources provided by third parties.

14. SELLING, GENERAL AND ADMINISTRATIVE

Note
Channel commission and customer services expenses
Advertising and promotion expenses
Property and transportation related expenses
Research and development expenses
Others(i)

Six-month period
ended 30 June
2024
2023
RMB million
RMB million
24,069
791
1,262
1,062
5,906

25,068
833
1,261
1,001
4,676

33,09032,839Note:(i)

The item does not include depreciation and amortisation and personnel expenses related to research and development.

Interim Report 2024 China Telecom Corporation Limited

065

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

15. PERSONNEL EXPENSES
Personnel expenses are attributable to the following functions:Six-month period
ended 30 June
2024
2023
RMB million
RMB million
Network operations and support
Selling, general and administrative

31,00819,55830,264
18,73450,56648,998

16. OTHER OPERATING EXPENSES

Notes
Interconnection charges
Cost of goods sold
Others

(i)
(ii)
(iii)

Six-month period
ended 30 June
2024
2023
RMB million
RMB million
7,498
18,980954

6,757
21,780892

27,432

29,429Notes:(i)Interconnection charges represent amounts incurred for the use of other domestic and foreign telecommunications operators’ networks fordelivery of voice and data traffic that originate from the Group’s telecommunications networks.

(ii)

Cost of goods sold primarily represents cost of communications equipment sold.

(iii)

Others mainly include tax and surcharges other than value-added tax and income tax.

066

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

17. NET FINANCE COSTS
Six-month period
ended 30 June
2024
2023
RMB million
RMB million
Interest expense on lease liabilities
Interest expense on short-term and long-term debts
Less: Interest expense capitalised*
Net interest expense
Interest income
Net foreign exchange gain or loss and others*Interest expense was capitalised in construction in progressat the following rates per annum

912
320
(40)

1,107
258
(46)

1,192
(1,042)100

1,319(1,039)
203

250

483

2.8%-3.2%

2.8%-3.6%

18. INCOME TAX
Income tax in the profit or loss comprises:
Six-month period
ended 30 June
2024
2023
RMB million
RMB million
Provision for PRC income tax
Provision for income tax in other tax jurisdictions
Deferred taxation

5,761
103
409

4,230
125
1,651

6,273

6,006

Interim Report 2024 China Telecom Corporation Limited

067

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

18. INCOME TAX (continued)
A reconciliation of the expected tax expense with the actual tax expense is as follows:

Notes

Six-month period
ended 30 June
2024
2023
RMB million
RMB million

Profit before taxation
Expected income tax expense at statutory tax rate of 25%
Impact of tax incentives and reduction including
additional deduction for qualified researchand development costs, etc.
Differential tax rate on mainland China subsidiaries’ andbranches’ income
Differential tax rate on other subsidiaries’ income
Non-deductible expenses
Non-taxable income
Tax effect of deductible temporary difference and deductible
tax loss for which no deferred tax asset was recognised
Others28,23926,180

7,060

6,545

(568)

(432)

(i)
(ii)
(iii)
(iv)

(364)
(32)
434
(333)

(416)
(22)
424
(260)

(v)

177
(101)

353
(186)

6,273

6,006

(i)

Income tax expense
Notes:(i)

Except for certain subsidiaries and branches which are mainly taxed at the preferential rate of 15%, the provision for mainland China income tax
is based on a statutory rate of 25% of the assessable income of the Company, its mainland China subsidiaries and branches as determined inaccordance with the relevant income tax rules and regulations of mainland China.

(ii)

Income tax provisions of the Company’s subsidiaries in Hong Kong and Macau Special Administrative Regions of the PRC, and in other countries
are based on the subsidiaries’ assessable income and income tax rates applicable in the respective tax jurisdictions which range from 12% to
38%.

(iii)

Amounts represent miscellaneous expenses in excess of statutory deductible limits for tax purposes.

(iv)

Amounts represent share of profits of associates and joint ventures and miscellaneous income which are not subject to income tax.

(v)

Amounts primarily represent settlement of tax filing differences of prior year annual tax return, etc.

068

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

19. DIVIDENDS
Pursuant to the shareholders’ approval at the Annual General Meeting held on 27 May 2024, a final dividend of
RMB0.090 (equivalent to HK$0.098814) per share (pre-tax) totalling approximately RMB8,236 million in respect of theyear ended 31 December 2023 was declared. The dividend of RMB7,082 million was paid on 13 June 2024, and thedividend of RMB1,154 million was paid on 26 July 2024.
The 2022 Annual General Meeting considered and approved the authorisation to the Board of Directors to decide on
the interim profit distribution plan of the Company for year 2023. Pursuant to a resolution at the Board of Directors’
meeting on 8 August 2023, an interim dividend of RMB0.1432 (equivalent to HK$0.156524) per share (pre-tax) totalling
approximately RMB13,104 million in respect of the six-month period ended 30 June 2023 was declared. The dividendof RMB11,117 million was paid on 31 August 2023, and the dividend of RMB1,987 million was paid on 28 September
2023.
Pursuant to the shareholders’ approval at the Annual General Meeting held on 23 May 2023, a final dividend of
RMB0.076 (equivalent to HK$0.085065) per share (pre-tax) totalling approximately RMB6,955 million in respect of
the year ended 31 December 2022 was declared. The dividend of RMB5,900 million was paid on 9 June 2023, and thedividend of RMB1,055 million for was paid on 21 July 2023.

20. EARNINGS PER SHARE
The calculation of basic earnings per share for the six-month periods ended 30 June 2024 and 30 June 2023 is basedon the profit attributable to equity holders of the Company of RMB21,812 million and RMB20,153 million, respectively,
divided by 91,507,138,699 shares in issue.
The amount of diluted earnings per share equals basic earnings per share as there were no potential ordinary sharesin existence for the periods presented.

Interim Report 2024 China Telecom Corporation Limited

069

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

21. CAPITAL COMMITMENTS
As at 30 June 2024 and 31 December 2023, the Group had capital commitments as follows:

Contracted for but not provided
Property
Telecommunications network plant and equipment

30 June2024
RMB million

31 December
2023
RMB million

1,994
17,671

1,912
21,015

19,66522,927

22. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
Financial assets of the Group include cash and cash equivalents, bank deposits and restricted cash, equity
instruments at fair value through other comprehensive income, accounts receivable, financial assets at fair value
through profit or loss and financial assets included in prepayments and other current assets. Financial liabilities of
the Group include short-term and long-term debts, accounts payable and financial liabilities included in accrued
expenses and other payables.

Fair Value Measurements
Based on IFRS 13, “Fair Value Measurement” , the fair value of each financial instrument is categorised in its entirety
based on the lowest level of input that is significant to that fair value measurement. The levels are defined as follows:•

Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical financial
instruments•

Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using
valuation techniques in which all significant inputs are directly or indirectly based on observable market data•

Level 3: fair values measured using valuation techniques in which any significant input is not based on
observable market data

The fair values of the Group’s financial instruments (other than long-term debts and financial instruments measured
at fair value) approximate their carrying amounts due to the short-term maturity of these instruments.

070

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

22. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (continued)
Fair Value Measurements (continued)
The listed equity securities investments included in the Group’s equity instruments at fair value through othercomprehensive income and financial assets at fair value through profit or loss are categorised as level 1 financial
instruments. As at 30 June 2024, the fair value of the Group’s listed equity securities investments is RMB855 million (31December 2023: RMB1,373 million), based on quoted market price on PRC stock exchanges. The Group’s investments
in unlisted equity securities, included in financial assets at fair value through profit or loss and equity instruments atfair value through other comprehensive income, are classified as financial instruments categorised as level 3. As at 30
June 2024, the fair value of the Group’s financial instruments categorised as level 3 is RMB466 million (31 December
2023: RMB450 million). For the financial instruments which are not traded in active markets, the Group establishes
fair value by using valuation techniques. The valuation methods or models used primarily include net asset value
method and market comparable company model, etc. The input values of valuation models mainly include net asset
value, expected yield rates and comparable company valuation multiples, etc.
The fair value of long-term debts is estimated by discounting future cash flows using current market interest rates
offered to the Group for debts with substantially the same characteristics and maturities. The fair value measurementof long-term debts is categorised as level 2. The interest rates used by the Group in estimating the fair values oflong-term debts, having considered the foreign currency denomination of the debts, ranged from 4.0% to 4.9% (31December 2023: 4.2% to 4.9%). As at 30 June 2024 and 31 December 2023, the carrying amounts and fair values of theGroup’s long-term debts were as follows:
30 June 2024
Carrying
Fair
amountvalue
RMB million
RMB million
Long-term debts

6,875

31 December 2023
Carrying
Fair
amountvalue
RMB million
RMB million

6,706

During both periods, there were no transfers among instruments in level 1, level 2 or level 3.

6,275

6,124

Interim Report 2024 China Telecom Corporation Limited

071

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

23. RELATED PARTY TRANSACTIONS(a) Transactions with China Telecom GroupThe Group is a part of companies under China Telecommunications Corporation, a company owned by the
PRC government, and has significant transactions and business relationships with members of China Telecom
Group.
The principal transactions with China Telecom Group which were carried out in the ordinary course of businessare as follows:

Notes
Construction engineering and design services
Receiving ancillary services
Interconnection revenues*
Interconnection charges*
Receiving community services
Centralised services transaction revenues
Centralised services transaction expenses
Property and land use right lease income
Property and land use right lease related expenses
Addition to right-of-use assets
Interest expense on lease liabilities
Provision of IT services
Receiving IT services
Purchases of telecommunications equipment,materials and procurement services
Sales of telecommunications equipment,materials and procurement services
Internet applications channel services revenues
Payment and digital finance related services
Communications resources lease expenses
Net inflow/(outflow) of deposit by China Telecom
Group with Finance Company*
Interest expense on the deposit by China Telecom
Group with Finance Company*
Short-term loans granted by Finance Company toChina Telecom Group
China Telecom Group’s repayments of short-termloans granted by Finance Company
Interest income from loans granted by Finance
Company to China Telecom Group
Receiving finance lease services
License income for intellectual property*

Six-month period
ended 30 June
2024
2023
RMB million
RMB million

(i)
(ii)
(iii)
(iii)
(iv)
(v)
(v)
(vi)
(vii)
(vii)
(vii)
(viii)(viii)

10,36910,603
18
36
1,942
1,762
301
13
360
167
11
1,152
3,194

8,699
10,590
27
45
1,973
1,790
325
16
345
250
8
945
2,638

(ix)

1,947

1,750

(ix)
(x)
(xi)
(xii)

2,068
25
484
223

2,110
36
466
245

(xiii)

638(5,495)(xiii)

209

140(xiii)

2,029

6,100

(xiii)(6,080)(6,071)(xiii)
(xiv)
(xv)

99
2,777
1

126
1,901
–

072

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

23. RELATED PARTY TRANSACTIONS (continued)(a) Transactions with China Telecom Group (continued)*

These transactions are conducted on normal commercial terms or better and are fully exempted from compliance with the reporting,announcement, independent shareholders’ approval and/or annual review requirements under Rules 14A.76 or 14A.90 of the Listing
Rules.

Notes:(i)

Represent construction and engineering as well as design and supervisory services provided by China Telecom Group.

(ii)

Represent amounts paid and payable to China Telecom Group in respect of ancillary services such as repairs and maintenance of
telecommunications equipment and facilities and certain customer services.

(iii)

Represent amounts received and receivable from/paid and payable to China Telecom Group for interconnection of local and domestic
long distance calls.

(iv)

Represent amounts paid and payable to China Telecom Group in respect of cultural, educational, health care and other community
services.

(v)

Represent related revenues and expenses shared between the Company and China Telecom Group for centralised services.

(vi)

Represent amounts of property lease fees received and receivable from China Telecom Group for leasing of properties and land use
rights.

(vii)

Represent amounts in respect of the leasing of properties and land use rights from China Telecom Group, which include the fees
for short-term leases, leases of low-value assets, variable lease payments not depending on an index or a rate, fees for non-lease
components, and right-of-use assets and related expenses recognised for leases.

(viii)

Represent IT services provided to and received from China Telecom Group.

(ix)

Represent the amount of telecommunications equipment and materials purchased from/sold to China Telecom Group and commission
paid and payable for procurement services provided by China Telecom Group.

(x)

Represent amounts received and receivable from China Telecom Group in respect of Internet applications channel services, including
the provision of communications channel and applications support platform and billing and deduction services, etc.

(xi)

Represent amounts paid and payable to China Telecom Group in respect of payment and digital finance related services.

(xii)

Represent amounts in respect of the leasing of related communications resources from China Telecom Group, including transmission
network communications resources, wireless network communications resources and wireline access network communications
resources, etc.

(xiii)

Represent amounts related to financial services provided by Finance Company to China Telecom Group, including loan service, deposit
service and other financial services.

(xiv)

Represent amounts related to finance lease services provided by China Telecom Group, including finance lease services such as saleand leaseback, direct lease, etc., and related finance lease consulting services.

(xv)

Represent amounts related to license income of intellectual property granted by the Group to China Telecom Group.

Interim Report 2024 China Telecom Corporation Limited

073

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

23. RELATED PARTY TRANSACTIONS (continued)(a) Transactions with China Telecom Group (continued)
Amounts due from/to China Telecom Group are summarised as follows:

Accounts receivable
Contract assets
Prepayments and other current assets
Other assets
Accounts payable
Accrued expenses and other payables
Contract liabilities
Lease liabilities

30 June2024
RMB million

31 December
2023
RMB million

2,370
190
5,101
99
30,61830,095
124
1,177

1,670
161
9,067
135
26,44429,969245
1,051

Amounts due from/to China Telecom Group, other than short-term loans granted by Finance Company included
in prepayments and other current assets and deposit with Finance Company included in accrued expenses
and other payables, are unsecured, non-interest bearing and are receivable or repayable in accordance with
contractual terms which are similar to those terms offered by third parties.
As at 30 June 2024, short-term loans granted by Finance Company to China Telecom Group amounted to
RMB4,029 million, and an impairment allowance recognised at RMB81 million (31 December 2023: RMB8,080
million, and an impairment allowance recognised at RMB162 million). Of the above loans, the interest rate forloans of RMB4,000 million is 2.88%; the interest rate for loans of RMB16 million is 3.00%; the interest rate forloans of RMB13 million is 3.50%, and all of the maturity dates are within one year.
The deposit interest rates provided by Finance Company to China Telecom Group shall comply with the relevant
requirements of the People’s Bank of China and be with reference to the deposit benchmark interest rates
promulgated by the People’s Bank of China from time to time (if any) and the deposit interest rates of thesame type of deposit services for the same period offered by the major cooperative commercial banks of China
Telecom Group and are conducted on normal commercial terms or better.

074

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

23. RELATED PARTY TRANSACTIONS (continued)(b) Transactions with China Tower
The principal transactions with China Tower are as follows:

Notes
Tower assets lease related expenses
Addition to right-of-use assets
Interest expenses on lease liabilities
Provision of IT services

(i)
(i)
(i)
(ii)

Six-month period
ended 30 June
2024
2023
RMB million
RMB million
5,949
1,857
496
27

6,290
1,571
609
18

Notes:(i)

Represent amounts in respect of the lease of tower assets. Tower assets lease related expenses include the variable lease payments
not depending on an index or a rate, fees for non-lease components and right-of-use assets and related expenses recognised for leases.

(ii)

Represent IT and other ancillary services provided to China Tower.

Amounts due from/to China Tower are summarised as follows:

Accounts receivable
Contract assets
Prepayments and other current assets
Accounts payable
Accrued expenses and other payables
Contract liabilities
Lease liabilities

30 June2024
RMB million

31 December
2023
RMB million

33
–
45
9,863
1,954
1
29,097

24
1
227
7,505
1,875
1
31,755

Amounts due from/to China Tower are unsecured, non-interest bearing and are receivable or repayable inaccordance with contractual terms which are similar to those terms offered by third parties.

Interim Report 2024 China Telecom Corporation Limited

075

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

23. RELATED PARTY TRANSACTIONS (continued)(c) Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing andcontrolling the activities of the Group, directly or indirectly, including directors and supervisors of the Group.
Key management personnel compensation of the Group is summarised as follows:
Six-month period
ended 30 June
2024
2023
RMB thousand
RMB thousand
Short-term employee benefits
Post-employment benefits

3,444
710

3,539
605

4,154

4,144

The above remuneration has been reflected in personnel expenses.

(d) Transactions with other government-related entities
The Group is a government-related enterprise and operates in an economic regime currently dominated byentities directly or indirectly controlled by the People’s Republic of China through government authorities,
agencies, affiliations and other organisations (collectively referred to as “government-related entities”).
Apart from transactions with the parent company and its fellow subsidiaries (Note 23(a)) and China Tower (Note23(b)), the Group has transactions with other government-related entities, which include but not limited to thefollowing:•

rendering and receiving services, including but not limited to telecommunications services•

sales and purchases of goods, properties and other assets•

lease of assets•

deposits and borrowings•

use of public utilities

These transactions are conducted in the ordinary course of the Group’s business on terms comparable
to the terms of transactions with other entities that are not government-related. The Group prices its
telecommunications services and products based on government-regulated tariff rates, where applicable,or based on commercial negotiations. The Group has also established procurement policies and approval
processes for purchases of products and services, which do not depend on whether the counterparties aregovernment-related entities or not.
The directors of the Company believe the above information provides appropriate disclosure of related party
transactions.

076

China Telecom Corporation Limited Interim Report 2024

SECTION VIII INTERIM FINANCIAL INFORMATIONNOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six-month period ended 30 June 2024

24. POST-EMPLOYMENT BENEFITS PLANS
As stipulated by the regulations of the PRC, the Group participates in various defined contribution retirement plansorganised by provincial, autonomous regional and municipal governments for its employees. The Group is required
to make contributions to the retirement plans at rates ranging from 15% to 16% of the salaries, bonuses and certain
allowances of employees. Other than the above, the Group also participates in supplementary defined contribution
retirement plans managed by independent external parties whereby the Group is required to make contributions
to the retirement plans at fixed rates of the employees’ salaries, bonuses and certain allowances. The Group has
no other material obligation for the payment of pension benefits associated with these plans beyond the annual
contributions described above.
The Group’s contributions to the above plans for the six-month period ended 30 June 2024 were RMB5,930 million (forthe six-month period ended 30 June 2023: RMB5,319 million).
The amount payable for contributions to the above defined contribution retirement plans as at 30 June 2024 was
RMB1,079 million (31 December 2023: RMB960 million).

25. EVENTS AFTER THE REPORTING PERIODOn 11 March 2024, China Telecom Quantum Information Technology Group Limited, a wholly-owned subsidiary of theCompany, entered into “The Conditional Non-Public A Share Subscription and Strategic Cooperation Agreement with
Quantumctek Co., Ltd.” with Quantumctek Co., Ltd. (“Quantumctek”), planning to subscribe non-public issuance of A
shares of Quantumctek with self-owned funds. The transaction has been approved by State-owned Assets Supervision
and Administration Commission of the State Council and shareholder’s meeting of Quantumctek, and is yet to beapproved by and registered with relevant authorities.
The dividend of RMB1,154 million (Note 19) of the Company was paid on 26 July 2024.
The Board of Directors has been authorised by 2023 Annual General Meeting to decide on the interim profit
distribution plan. Pursuant to a resolution passed at the Board of Directors’ meeting on 20 August 2024, the Board of
Directors has resolved to declare an interim dividend of RMB0.1671 (equivalent to HK$0.182289) per share (pre-tax),
totalling approximately RMB15,291 million, for the six-month period ended 30 June 2024. The dividend has not been
provided for in the condensed consolidated financial information for the six-month period ended 30 June 2024.

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