Revenue and net profit growth rates are now at their lowest level in nearly five years, as China Telecom accelerates its transformation toward AI-related businesses.

On the evening of March 24, China Telecom (601728.SH) released its 2025 annual report. Total revenue for the period reached 523.92B yuan, up 0.068%; among them, service revenue was 485.4B yuan, up 0.7%; net profit attributable to shareholders of listed companies was 33.19B yuan, up 0.52%; and non-GAAP net profit was 31.33B yuan, up 1.91%.

Among them, China Telecom’s communications infrastructure business revenue reached 330.5 billion yuan, up 0.7%. Mobile users totaled 439 million, the 5G network user penetration rate reached 68.8%, broadband users were 201 million, and the gigabit user penetration rate reached 31.6%.

According to the financial report data, both the company’s revenue and net profit growth rates were the lowest in nearly the past five years, indicating that growth in the industry has entered a platform period. However, the company’s performance in strategic emerging businesses remains outstanding.

The financial report shows that in 2025, China Telecom’s revenue from its industrial digitalization business reached 147.3 billion yuan, up 0.5%. Resource-based revenue (AIDC, networked dedicated lines, Internet of Things, 5G customized networks, etc.) reached 63.0 billion yuan, up 1.1%. Strategic emerging businesses continued to maintain faster growth: revenue from Tianyi Cloud reached 120.7 billion yuan, and the market share of public cloud IaaS has risen to the second largest in China; AIDC (artificial intelligence data centers) revenue reached 34.5 billion yuan; security business revenue was 16.6 billion yuan; and intelligent business revenue was 12.3 billion yuan. Innovative businesses such as video vision (Shixun Vision), quantum, satellites, etc. all achieved high-speed growth of more than 30%, becoming new engines driving the company’s development.

In 2025, China Telecom completed total capital expenditures of 80.4 billion yuan. Its investment structure showed a clear trend toward shifting toward computing power. Specifically, investment in computing power infrastructure was 20.2 billion yuan, network infrastructure investment was 40.7 billion yuan, and investment in integrated information services and basic supporting facilities was 19.5 billion yuan.

In terms of network construction, China Telecom has built more than 1.54 million 5G mid-to-high frequency base stations and more than 1.0 million low-frequency base stations. The 5G network achieved continuous coverage of all townships and above areas nationwide. The company has deployed more than 110k 5G-A carrier aggregation sites and more than 650k RedCap sites across more than 300 cities at scale. Gigabit optical network 10G PON ports exceeded 10 million, and coverage of gigabit homes in urban areas exceeded 97%. With these infrastructures becoming more complete, not only has it improved user experience, but it has also provided a high-speed and stable network environment for the digital transformation of industries.

Regarding dividends, China Telecom plans to distribute a dividend of 0.0908 yuan per share (including tax), for a total planned dividend of 110k yuan. Adding the interim dividend already paid in 2025, the full-year dividend for 2025 is approximately 650k yuan, accounting for 75% of the profit attributable to shareholders in 2025.

At the performance briefing, China Telecom Chairman Ke Wen said, “We need to reshape our business using AI and Token operations.” In the future, the company will use Token services as the core of its operating line, align with the goal of becoming a leading AI service provider, integrate system-level capabilities for science and technology, talent, and channels, and provide integrated, digital-and-smart, localized AI services to build a new form of intelligent economy.

China Telecom President and Chief Operating Officer Liu Guiqing also said, “To build a new form of intelligent economy, we must accelerate the transformation and upgrade from ‘traffic operations’ to ‘Token operations.’ Token services will be the core operating line for China Telecom going forward. The company will strengthen its own Token, grow ecosystem Tokens, and actively explore international Token operations.”

Ke Wen disclosed the company’s 2026 investment plan at the meeting: total capital expenditures are expected to be 73.0 billion yuan for the whole year, a year-on-year decrease of 9.2%. However, investments in computing power infrastructure are set to grow against the trend: the company plans to invest 25.5 billion yuan, up 26% year on year, and the proportion of total investment will rise to 35%. Investment in AIDC (artificial intelligence data centers) will increase by 28%. Ke Wen said that AIDC is not only infrastructure, but also a major source of China Telecom’s revenue and profits, and that investment in AIDC will be continuously and dynamically optimized under the existing plans.

As introduced, since March, China Telecom has relied on its intelligent cloud system and leveraged advantages in channels and delivery teams to achieve one-click, secure, and rapid deployment of OpenClaw through cloud PCs, cloud hosts, Tianyi smart boxes, etc., driving an increase of more than 60k new cloud PC units and a 10x increase in Token average daily consumption.

As of now, China Telecom has built more than 110 industry large models and more than 350 industry intelligent agents, forming standardized AI application paradigms covering 15 categories of industries such as manufacturing and government affairs. It serves more than 37k industry customers. It has built a demonstration base for “AI+” initiatives of state-owned central enterprises, and takes the lead in building a trusted data space and a computing power pool for the field of state-owned central enterprises. The penetration rate of AI in central SOEs has reached 85%.

China Merchants Securities stated that China Telecom’s advantages in computing power networks and AI-native service areas are significant, but it needs to be cautious about the drag on overall profitability caused by weak growth in traditional businesses. Ping An Securities believes the company’s strategy of “cloud-to-digital-to-intelligent enabling for wisdom (yun gaiming shuzhuan zhi hui)” is synergistic with its state-owned background, and it has long-term optimism about its penetration space in the digitalization market for government affairs and central SOEs.

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