The Chinese fixed-line giant's president and chief operating officer, Chang Xiaobing, said that his company's 3G capital expenditure will be substantially lower than the amount than expected by the market.

Industry watchers had previously speculated that China Telecom were planning to spend 90 billion yuan on the construction of a nationwide 3G network, using WCDMA technology.

But the president says that the carrier will only build this high-speed mobile network in areas where demand exists. However, Mr. Chang remained tight-lipped on which kind of 3G technology will be adopted, and whether the parent or the listed company will bear the costs.

Even so, analysts are generally pleased with the company's strong first-half earnings.

The company has announced a 28 percent increase in adjusted first-half profit to 10.5 billion yuan, or 1.2 billion US dollars, boosted by rapid growth in broadband users and its xiaolingtong, or semi-mobile phone service.

(CRI.com September 2, 2004)