China Netcom posts RMB 10.58 mln net profit in 2007

China Netcom Group Corp<906>, the nation's second-largest fixed-line operator, saw a 6.7% year-on-year slide in profit last year tracking the decreasing number of fixed-line subscribers.

Net profit was RMB12.01 billion in 2007, compared with RMB 12.97 billion a year ago, according to its annual earnings report. Operating revenue plunged 0.22% from the previous year to RMB 84 billion, including amortization of upfront connection fees of RMB1.52 billion.

This is the second consecutive year for the company to suffer a loss in net income and operating revenue. Its fixed-line subscribers declined to 110.8 million as of the end of last year.

However, its revenue from innovative businesses surged 38.9% to RMB 28.67 billion. In particular, revenue from broadband content and applications reached RMB 1.75 billion, up 107.7% from the previous year.

China Netcom is speeding up its strategic transformation into a broadband and communication and multimedia services provider, said Chairman Zhang Chunjiang. Income from broadband service and Internet-related service soared 37.7% year-on-year to RMB14.37 billion in 2007, and its broadband customers climbed to 19.77 million, up 37% from a year earlier.