The company’s main operating turnover from these markets in 2007 was estimated at 10.405 billion yuan, which brought up its total 2007 revenue by 1.58 percent.

Zuo Xunsheng, CNC’s president, said at the 2008 working conference that the company’s performance in southern China basically met the anticipation in 2007. But he did not disclose any details about CNC’s performance in northern China, which, according to a related source, is not satisfactory.

CNC is the second largest fixed telecom operator in China after China Telecom Group, the parent company of China Telecom (0728.HK; CHA.NYSE). The two companies are respectively dominating in the southern China market and northern China market, and used to invade into each other’s area. But they signed an agreement at the beginning of 2007 to stop the invasion progress, which is attributed to CNC’s falling performance in southern China.

In spite of the main business sector, CNC reported a rapid development in the broadband service sector and value-added service sector. In 2007, the broadband service sector is estimated to have 6.2 million additional users, bringing the total to 22.6 million; and generate 15.9 billion yuan, surging by 36 percent and contributing to CNC’s revenue growth by 4.46 percentage points. It is learned CNC plans to lift the additional broadband user number to eight million in 2008, and will converge resources, accelerate the development of broadband service, and promote its ARPU.

“CNC will transform its operating mode from access plus content application plus service to content application plus access plus service,” said Zuo, indicating the company will focus on broadband content application.

Besides, Zuo also said CNC vows to lower the customer-churn rate to the bottom for its speaking service in 2008. In November 2007, the company saw its fixed-phone user number fall 760,900, as against 370,400 in October. Meanwhile, China’s largest mobile operator China Mobile (0941.HK; CHL.NYSE) reported an additional user number of 6.5 million. A source with CNC said the obstacle hampering the company’s development is not the competition with China Telecom yet. On the contrary, the two fixed operators are joining hands in fighting against China Mobile.

Thus, Zuo emphasized CNC has to optimize the design of long-distance call package, strengthen the sales of products that peg with long-distance call service, and develop IP call service pertinently.  (Edited by Li Xiaoyu, )