China Telecom Added Record Internet Users in June

China Telecom Corp., the nation's biggest fixed-line phone company, added a record number of high-speed Internet users last month, helping the company counter a loss in telephone subscribers.

China Telecom gained 890,000 broadband customers for a total of 40 million at the end of June, the Beijing-based company said on its Web site on Monday. That was the highest number of monthly additions since the carrier started publishing the data in 2007.

Chairman Wang Xiaochu increased spending on broadband networks last year to boost customer numbers in the world's biggest Internet market. Web users in China exceeded 221 million in February, overtaking the U.S.'s 220 million, according to the state-run Xinhua News Agency.

China Telecom has upgraded the speed of its broadband networks and managed to persuade some users to sign more expensive packages, said Tiffany Feng, who rates China Telecom shares accumulate at Guotai Junan Securities Ltd. in Hong Kong. Last month's gain in customers was helped by the company's acquisition of a unit in Beijing, she said.

China Telecom rose 2.6 percent to HK$4.37 at the close of Hong Kong trading on Monday, compared with a 3 percent gain in the benchmark Hang Seng Index.

Average spending by China Telecom's broadband Internet customers rose to 80 yuan ($12) a month last year, compared with 77 yuan in 2006, the company said in March.

Increased Spending

China Telecom increased spending on broadband and non-voice services 37 percent to 19.9 billion yuan last year, the company said. In May, shareholders approved the phone carrier's 5.56 billion yuan acquisition of a fixed-line and broadband unit in Beijing from parent China Telecommunications Corp.

China Telecom said it lost 580,000 phone users in June, the 12th successive monthly decline, cutting its total subscribers to 214.9 million. Competition from wireless companies China Mobile Ltd. and China Unicom Ltd., which have lowered prices and boosted network investment, has crimped demand for fixed-line services.

China Mobile said Monday it gained 7.55 million wireless users last month for a total of 414.6 million. The nation's biggest phone company last year earned more than double the combined profit of its three biggest rivals. Unicom added 1.1 million users for total of 171 million subscribers in June.

In May, China's government said it will let the four major phone companies offer both fixed-line and wireless services after reorganizing their assets. Unicom will sell the smaller of its two wireless businesses to China Telecom, and merge its remaining operations with fixed-line carrier China Netcom Group Corp.