The decrease began in the first quarter of 2007 and it is the main reason for China Telecom’s slower growth in revenue and net profit in 2007, which rose 2.8 percent and 1.8 percent year on year respectively to hit 131.2 billion yuan and 17.26 billion yuan.

CMS attributed the decrease to declining tariff for mobile service and one-way charging, which makes the FMS (fixed-to-mobile substitution) become more apparent. Besides, China Telecom’s new strategy could be playing a role, too, which is increasing resource allocation to government and enterprise users and high- and mid-end family users while casting strict control over investment in low-end market.