CHINA TELECOM Q3 net profit increased by 3.6% year-on-year, revenue slightly decreased by 0.91% year-on-year | Financial Report Insights

China Telecom's operating revenue in the third quarter decreased slightly by 0.91% year-on-year to 124.848 billion RMB. Net profit increased by 3.60% year-on-year to 7.756 billion RMB, with profit growth mainly driven by non-operating projects. In the first three quarters, the net increase in mobile users was 12.67 million, and the net increase in wired broadband users was 3.05 million. On the 21st, China Telecom announced its financial report for the third quarter of 2025: Operating revenue decreased slightly by 0.91% year-on-year to 124.848 billion RMB. Net profit attributable to shareholders of the listed company increased by 3.60% year-on-year to 7.756 billion RMB. From the performance since the beginning of the year, the company's overall operations remain stable. In the first three quarters of 2025, China Telecom achieved a cumulative operating revenue of 394.27 billion RMB, a year-on-year increase of 0.59%; net profit attributable to the parent company was 30.773 billion RMB, a year-on-year increase of 5.03%. The net cash flow generated from operating activities in the first three quarters decreased by 10.37% year-on-year. Rapid Growth of Emerging Businesses, Pressure on Traditional Business Growth The financial report shows that strategic emerging businesses have become the most certain source of growth for China Telecom. According to the company's disclosure, it is fully embracing artificial intelligence, upgrading its strategy to "cloud transformation, data transformation, and intelligent benefits," and accelerating its transformation into a service-oriented, technology-driven, and security-focused enterprise. Data shows that in the first three quarters of 2025, the scale of the company's strategic emerging businesses continued to expand. Among them, IDC (Internet Data Center) business revenue reached 27.5 billion RMB, a year-on-year increase of 9.1%; security business revenue was 12.6 billion RMB, a year-on-year increase of 12.4%. The fastest-growing areas are businesses closely integrated with artificial intelligence and digital applications, with "intelligent revenue" surging by 62.3% year-on-year, Internet of Vision revenue increasing by 34.2% year-on-year, and quantum revenue doubling with a growth of 134.6%. These high-growth businesses validate the company's strategic path towards becoming a technology-driven enterprise. The company stated that it has built an integrated intelligent cloud service system centered around the "Xirang" platform, which includes "computing power + platform + data + model + application." This not only accelerates the "intelligent upgrade" of its own business but also shapes new competitive advantages in the industrial digitalization market. In contrast to the impressive performance of emerging businesses, China Telecom's traditional basic businesses are facing pressure from slowing growth. As of September 30, the total number of mobile users reached 437 million, with the penetration rate of 5G network users increasing to 66.9%. However, in terms of user growth, the net increase in mobile users in the first three quarters was 12.67 million, lower than the 14.90 million in the same period last year. Similarly, the net increase in wired broadband users also significantly slowed from 6.10 million in the same period last year to 3.05 million this year. The average monthly data usage per household (DOU) for mobile internet increased by 11.4% year-on-year to 22.3GB, and the penetration rate of gigabit broadband users reached 31.0% Cost Control and R&D Investment Go Hand in Hand Under pressure on the revenue side, China Telecom has ensured steady profit growth through effective cost control and precise R&D investment. According to the financial report, in the first three quarters of 2025, the company's operating costs amounted to 274.8 billion yuan, a year-on-year increase of only 0.1%, demonstrating good cost management capabilities. At the same time, selling expenses decreased by 1.4% year-on-year, further optimizing the expense structure. Meanwhile, the company has not reduced its investments for the future. In the first three quarters, its R&D expenses increased by 4.4% year-on-year to 9.1 billion yuan. The company clearly stated in the report that the increased R&D spending is mainly used for continuous in-depth application of basic research, focusing on key core technology breakthroughs in areas such as networks, cloud and cloud-network integration, artificial intelligence, quantum/security, etc., which forms a direct logical connection with the rapid growth of its emerging businesses