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Interim Results 2011Interim Results 2011China Telecom Corporation Limited23 August 2011 | www.chinatelecom-h.com

Forward-Looking Statements

Certain statements contained in this document may be viewed as “forward-

looking statements” within the meaning of Section 27A of the U.S. Securities

Act of 1933 (as amended) and Section 21E of the U.S. Securities Exchange Act

of 1934 (as amended). Such forward-looking statements are subject to known

and unknown risks, uncertainties and other factors, which may cause the

actual performance, financial condition or results of operations of China

Telecom Corporation Limited (the “Company”) to be materially different from

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Telecom Corporation Limited (the “Company”) to be materially different from

any future performance, financial condition or results of operations implied by

such forward-looking statements. In addition, we do not intend to update

these forward-looking statements. Further information regarding these risks,

uncertainties and other factors is included in the Company’s most recent

Annual Report on Form 20-F filed with the U.S. Securities and Exchange

Commission (the “SEC”) and in the Company’s other filings with the SEC.

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Presentation by

Mr. Wang XiaochuChairman & CEO

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Mr. Shang Bing

Madam Wu AndiExecutive Vice President

& CFO

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Agenda

1Overview

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2Financial Performance

OverviewOverview

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Highlights

• Effective scale development progressively enhancing profitability

• Robust 3G momentum driving fast mobile expansion

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expansion

• Strengthened broadband capability further sharpening leading edges

• Proactively nurturing innovative businesses to create new core competence

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Solid Results

1H2010 1H2011 Change

Operating Revenue (RMB Mil) 107,552 120,110 11.7%

Operating Revenue (Excl. Mobile Terminal Sales) (RMB Mil)

105,485 113,727 7.8%

EBITDA (RMB Mil) 45,759 48,501 6.0%

EBITDA Margin 42.5% 40.4% -2.1pp

Net Profit (RMB Mil) 8,811 9,710 10.2%

EPS (RMB) 0.109 0.120 10.2%

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Free Cash Flow (RMB Mil) 18,591 15,458 -16.9%

2010.12 2011.6 Change

Mobile Subs (Mil) 90.52 108.37 17.85

Including: 3G Subs (Mil) 12.29 21.54 9.25

Access Lines in Services (Mil) 175.05 172.22 -2.83

Wireline Broadband Subs (Mil) 63.48 70.09 6.61

Notes: Unless otherwise stated in this presentation1. All financial data were adjusted to exclude Upfront Connection Fees (1H2010: RMB265 mil; 1H2011: RMB98 mil)2. EBITDA was calculated before CDMA Network Leasing Fees (1H2010: RMB6,365 mil; 1H2011: RMB8,696 mil) to enhance comparability3. Net Profit represented profit attributable to equity holders of the Company4. Free Cash Flow = EBITDA – CDMA Network Leasing Fees – CAPEX – Income Tax Expenses

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Revenue Breakdown

RMB Mil 1H2010 1H2011 Change

Mobile 25,094 37,785 50.6%

Voice 14,102 18,002 27.7%

Data 8,668 13,137 51.6%

Others 2,324 6,646 186.0%

Wireline 82,458 82,325 -0.2%

Voice 32,915 26,462 -19.6%

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,

Data 46,514 52,370 12.6%

Internet Access 26,739 30,212 13.0%

VAS & Integrated Information Service 13,713 15,207 10.9%

Managed Data & Leased Line 6,062 6,951 14.7%

Others 3,029 3,493 15.3%

Total 107,552 120,110 11.7%

Note:1. 1H2011 Wireline Voice Revenue included RMB15,562 mil from local voice, RMB6,194 mil from DLD, RMB899 mil from ILD and RMB3,807 mil from interconnections2. Mobile Others mainly included revenue from sales of terminals

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Overall Revenue+11.7%

Revenue Growth Drivers

RMB Mil

-6.0pp +3.6pp +8.2pp

120,110

8,791

+5.9pp

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Wireline Voice

1H2010 Wireline Data & Others

Mobile Voice

Mobile Data & Others

107,552

-6,453 6,320

3,900

1H2011

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Remarkable Progress in Optimizing Revenue Structure

Robust growth across strategic businesses (mobile, wireline data & others)

• Revenue/total revenue: 78.0% ( 8.6pp yoy)

Mobile business as a key growth driver:

• Revenue/total revenue: 31.5% ( 8.2pp yoy)13.1%10.2%

15.0%

16.5%8.2pp

Growth businesses

Full Services Revenue Structure

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Enhanced wireline value laying a solid foundation for sustainable growth:

• Wireline Data & Others/total revenue: 46.5% ( 0.4pp yoy)

Wireline operating risk further alleviated:

• Wireline Voice/total revenue: 22.0% ( 8.6pp yoy)

• PAS revenue only 0.9% of total revenue

30.6%

46.1%

22.0%

46.5%

Mobile Data & Others

Wireline Voice Wireline Data & Others

Mobile Voice

8.6pp

0.4ppaccounted for 78.0% ( 8.6pp yoy)

1H2010 1H2011

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Fast Mobile Expansion Revealing Scale Benefit

World’s largest CDMA mobile operator

Fast expanding mobile business achieving scale & enhancing overall profitability

• 1H2011 subs net add: 17.85 mil

• Mobile ARPU: RMB52.2

• Subs market share: 12.0% ( 2.5pp yoy)

Robust revenue growth with strong data

Subscribers

Mil

74.52

108.37

9.5%12.0%

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Robust revenue growth with strong data development

Strengthened open channel distribution network

• Net add by open channel: 48% ( 5pp vs 2010)

• Open channel terminal sales: 68% ( 7pp vs 2010)

Service Revenue

RMB Mil

1H2010

22,77031,139

1H2011

Mobile Subs Market Share

2010.6 2011.6

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3G Traction Driving Fast Mobile Expansion

Leverage 3G migration opportunity to promote 3G scale development via innovative mobile Internet products & proliferating 3G terminal devices

Promote data traffic operation management by leveraging differentiation edges & increasing mobile Internet user penetration & activation

3G Subscribers

Mil

5.11

9.25

13.6%

19.9%

9.6%

3.117.18

12.29

21.54

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3G Subs as a % of Mobile Subs• Monthly data traffic of 3G handset users: 78.3%

Continuously proliferate mobile terminal portfolio & enhance 3G smartphone edge

• Pioneer in launching sub-RMB1,000 3G smartphones with industry-leading sales volume

• Industry-leading supply of 3G terminals: ~400 models (2010: ~300 models)

2H20101H2010 1H2011

TB

2011.1

834

2011.6

Monthly Data Traffic of 3G Handset Users

1,487

3G Net Add

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Rapid Mobile Data Development

Mobile Data RevenueSelf-operated business

• Enhance centralized efficient operation of product centers for differentiated services

• Strengthen bundled sales (iMusic, 189 mailbox & eSurfing apps store…) to increase penetration & activity level

• Accelerate mobile Internet core business development (video, gaming & animation…) to promote data traffic operation management

RMB Mil

8,668

13,137

38.1%

42.2%

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promote data traffic operation management

3rd party cooperation business

• Establish mobile Internet cooperation alliance & foster all-party–win eco-system

• Provide integrated open platform with superior edges on unified authentication, mobile positioning & electronic payment

• Strengthen cooperation on IM, SNS, search, e-commerce & full-screen browsing

1H2010 1H2011

Mobile Data as % of Mobile Service Revenue

Key Mobile Data Services

(Mil) 2010.12 2011.6 Change

“189 mailbox” subs 30.60 36.78 20.2%

“eSurfing Live” subs 22.04 28.35 28.6%

“eSurfing” Video subs 3.39 6.38 88.2%

“eSurfing” apps store registered subs

5.62 27.30 > 3x

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Alleviating Wireline Risk

Wireline SubscribersRevenue

RMB Mil

82,458 82,325

Access Lines in Services (Mil) 2010.12 2011.6

Household 110.2 109.1

Government & Enterprise 34.0 35.4

Public Telephone 14.5 14.3

PAS 16.4 13.4

Total 175.1 172.249,543

55 863

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1H2010

Wireline Voice Wireline Data & Others

Broadband Subs (Mil) 63.5 70.1

Voice Usage

1H2010 1H2011

Local Usage (Pulses Mil) 128,778 105,522

DLD Usage (Minutes Mil) 36,339 27,591

ILD Usage (Minutes Mil) 590 576

32,915

55,863

26,462

1H2011

Voice Usage

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Wireline Broadband Sustaining Leading Edges

Broadband Access Revenue

Leverage flexible tariff package & network edge to drive broadband scale development amid increasing competition

• Differentiated development strategiesLow-end: market share graspingMain-stream: bandwidth up-sellHigh-end: premier service offering

• Promote the use of “eSurfing” client interface & WiFi service leveraging unified

RMB Mil

26,302

29,755

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interface & WiFi service leveraging unified customer account operation to increase overall customer value

• Innovate marketing initiatives & improve broadband product value to enhance customer satisfaction

1H2010 1H2011

Mil

1H2010

58.33

1H2011

Subscribers

70.09

4.87

6.61

78.474.3

Broadband ARPU (RMB)Net Add 15

Robust Wireline VAS & Integrated Information Services

Revenue

Strengthen “cloud” & IT service capabilities

• To leverage ICT, IDC service strengths & high speed data network edges to accelerate growth of businesses such as mobile payment, e-commerce, industry applications

• To build “cloud” data source pool & data centre & offer premium services of “cloud” hosting, “cloud” storage & “cloud” application services

RMB Mil

13,71315,207

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application services

• To promote scale development of “cloud” products to drive revenue growth & value chain

Accelerate scale development of “Best-Tone” services

• To grow e-commerce business & strive to be the leading online booking service provider

• To strengthen centralized & professional operation of video & information services

• To promote scale development of information service & enhance “Best-Tone” customer applications

1H2010 1H2011

“Best-Tone” Type ofInformation Services Revenue

RMB Mil

1H2010

2,8583,309

1H201116

Commenced “Broadband China, Fiber Cities” project

• Broadband & Internet investment accounted for 71.0% of total CAPEX, fuelling broadband development & sharpening edge

Investing for Sustainable Growth

CAPEX

RMB Mil

43,037

50,000

Foster broadband business development

Enhance core competence

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development & sharpening edge

• 2011 wireline broadband net add target: ~12 mil2013 target: 20M customer access bandwidth capability across all cities

• Enhance customer experience & lay a solid foundation for supporting future new business development

2010

1H CAPEX

17,918 20,967

2011E

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Leverage Mobile Internet to Promote Robust Growth

Superior strengths ready to profit from explosive data growth

Fast mobile subs & data revenue growth

Robust broadband development via effective bundling & integrated

services

Integrated & comprehensive

nationwide high-Rapidly

proliferating smart Explicit &

effective strategic

Fast expansion of compelling mobile

Internet Superior IT & Information

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gspeed broadband

networks

• FTTx• EVDO•WiFi• IP network

p gdevices

• 3G Handsets: ~400 models• 3G Smartphones: >100 models• Rich & diverse handset portfolio (low-end, mid-tier and high-end) with compelling price performance factors

gpositioning

• Leader of Intelligent Pipeline• Provider of Integrated Platforms• Participant of Content & Application Development

applications & contents

•Micro-blog• Instant Messaging• SNS•Music• Video• Gaming• Search• Animation

Service strengths

• Innovative industry applications• Extensive & in-depth partnership with SP/CP with integrated open platform capability

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To Achieve Leap Development Capitalizing on Strategic Opportunity

Foundation establishment

• Most comprehensive & in-depth nationwide 3G network

• Developed “eSurfing” brand & mobile sales support system

• Activated terminal value chain

• Integrated operation enhancing competence

Scale development breakthrough leveraging innovation

• Strengthen data traffic operation management leveraging 3G traction

• Boost mobile scale expansion with compelling terminals

• Scale development of broadband service & industry applications

• Coordinated & effective promotion of self-owned & open channels

• Enhance overall service capabilities

Init

iati

ves

• Mobile Internet as a growth driver

• Comprehensive “cloud” services

• Increase IPTV penetration

• Advance applications on multi-screens with interactive capabilities

• Develop & foster innovative

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Value

enhancing competence

• Mobile subs: 28 mil >100 mil

• Broadband subs: >70 mil

• Effective resource allocation progressively enhancing profitability

• Enhance overall service capabilities

• Strengthen full services operation capability

Valu

e Cr

eati

on

Profitability

• Develop & foster innovative businesses

• Enhance value & investment returns

ScaleFoundation

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Financial Financial PerformancePerformance

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PerformancePerformance

Key Financial Information

RMB Mil 1H2010 1H2011 Change

Operating Revenue 107,552 120,110 11.7%

Operating Expenses 93,997 105,717 12.5%

Depreciation & Amortization 25,839 25,412 -1.7%

Network Operations & Support 22,812 25,490 11.7%

Incl: Mobile Network Leasing 6,365 8,696 36.6%

Personnel 17,196 19,237 11.9%

SG&A 19,752 22,205 12.4%

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Incl: Mobile Handset Subsidies 6,098 7,684 26.0%

Interconnection & Others 8,398 13,373 59.2%

Incl: Wireline Interconnection 2,708 2,450 -9.5%

Mobile Interconnection 2,585 3,731 44.3%

Cost of Mobile Terminals Sold 1,804 5,802 221.6%

Operating Profit 13,555 14,393 6.2%

Net Profit 8,811 9,710 10.2%

EBITDA 45,759 48,501 6.0%

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Effective Cost Management Driving Sustainable Growth

Rational Planning & Resources Allocation Fuelling Scale Expansion

Cash operating expenses trended up to support scale expansion, but remained relatively steady as % of Operating Revenue

• SG&A: 0.1pp

• Network Operations & Support: flat21 2%

88.0%

21 2%

18.5%

Network Operation &

SG&A

87.4%

18.4%

Operating Expenses as a % of Operating Revenue

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• Personnel: flat (appropriate initiatives to attract & incentivize talents)

• Cost of Mobile Terminals Sold & Others: 3.1pp (increased efforts on centralized procurement of iconic 3G handsets)

• Interconnection: 0.2pp (fast growing mobile traffic)

Depreciation & Amortization: 2.8pp, benefiting from prudent CAPEX control

4.9%2.9%

16.0%

21.2%

5.1%6.0%

21.2%

16.0%

21.2%

24.0%Depreciation & Amortization

Interconnection

Cost of Mobile Terminals Sold

& Others

Personnel

Operation & Support

1H2010 1H2011

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Strictly control investment in traditional wireline business & step up investment in transformation businesses to boost network servicing capability

Strategic fiber & broadband deployment for

Broadband & Internet 7.0pp yoy

VAS & Integrated Information Services 5.8pp yoy

IT & Support 0.1pp yoy

Wireline Voice 1.0pp yoy

Infrastructure & Others 0.1pp yoy

Optimized CAPEX Structure Supporting Strategic Transformation

15.8%

2.4%

14.6%

3.2%

VAS & Integrated Information

Services

IT & SupportWireline Voice

Infrastructure& Others

10.0%2.3%

14.5%2.2%

CAPEX Structure

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Strategic fiber & broadband deployment for continued market leadership & sustainable growth:

15 mil broadband access ports in 1H2011

Customer access bandwidth capability:

Coverage in cities98%

58% 22pp yoy

3pp yoy8M:

20M: 7.3pp

(in 1H2011)

94.4%

65.3%

Notes:1. Broadband & Internet included data network, transmission network, broadband access equipment & cable2. VAS & Integrated Information Services included VAS platform & ICT3. IT & Support included enterprise informatization services4. Wireline Voice included switches, voice access equipment & cable5. Infrastructure & Others included air-conditioning supply facilities, conduits, buildings, minor purchases, R&D, etc.

64.0%

Broadband & Internet

71.0%

1H2010 1H2011

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Solid Financial Strength

19 6%

Total Debt / Total Capitalization Net Debt / EBITDA*

0.6627.5%

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1H2010 1H2011 1H2010 1H2011

19.6%0.30

Improve Capability in Resources Deployment & Rationalize Capital Structure to Well-prepare for CDMA Network Acquisition

* Note: Net Debt / Simple Annualized 1H2011 EBITDA24

Optimize Resources Deployment to Promote Profitable Growth

Proactive & effective deployment of sales

initiatives

• Prompt response to market demand by flexibly deploying resources on key businesses, including mobile, industry applications & broadband

• Strategically tilt handset subsidies toward 3G business to improve return

Grow revenue & contain costs to raise

• Enhance evaluation metrics to increase incentives for revenue growth• Promote energy saving & emission reduction; discipline in network support

expenses, administrative & other indirect operating expensesL g i t l & t l fi i g h l t ti i it l t t &

Flexible & Dynamic Budget Control to Maximize Return

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profitability • Leverage internal & external financing channels to optimize capital structure & lower finance cost

Deepen financial management

innovation to enhance overall management

• Refine performance evaluation units to deepen precision management and improve return

• Implement centralized financial management at provincial level to foster efficiency

• Develop financial management mechanism addressing the features of new emerging businesses

Optimize investment structure to reap

higher return

• Increase investment in broadband, IP network & integrated platforms to fuel scale development

• Establish asset economic value management mechanism to enhance asset return

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Strengthen Competitiveness via Deepened Transformation & Mechanism Innovation

hold

ers’

Val

ueChange management: Promote mindset of “Pursue market potential instead of budget goal” to expand revenue & market share

Structural reform: Establish Business Innovation Department to coordinate new product centres & invigorate new business development

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Enha

nce

Shar

eh

Centralized efficient management: Centralize & coordinate overall resources deployment to enhance operating efficiency

Service of integrity: Deliver best-in-class service by improving service capability & innovative practice

Risk management: Improve risk management and internal control by continuously optimizing control points of key business processes

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Thank You!Thank You!

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For further information & enquiries, please contact our Investor Relations Department at ir@chinatelecom-h.com

Appendix 1

RMB Mil 1H2010 1H2011

Operating Revenue 107,817 120,208

Upfront Connection Fees 265 98

Operating Expenses (93,997) (105,717)

Net Finance Costs (1,855) (1,309)

Extracted from unaudited consolidated statement of comprehensive income for the six-month ended 30 Jun 2011 (incl. upfront connection fees)

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Investment Income, Share of Profit from Associates 37 47

Profit Before Taxation 12,002 13,229

Income Tax (2,885) (3,380)

Profit for the Period 9,117 9,849

Equity Holders of the Company 9,076 9,808

Non-controlling Interests 41 41

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RMB Mil 2010.12.31 2011.6.30

Current Assets 55,245 61,021

Non-current Assets 352,110 345,334

Total Assets 407,355 406,355

Current Liabilities 126,923 123,764

Appendix 2 Extracted from unaudited consolidated statement of financial position as at 30 Jun 2011 (incl. upfront connection fees)

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,

Non-current Liabilities 48,468 46,708

Total Liabilities 175,391 170,472

Total Equity 231,964 235,883

Equity Attributable to Equity Holders of the Company 231,468 235,379

Non-controlling Interests 496 504

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