China Telecom Corp., the country’s biggest fixed-line carrier, said its parent plans to spend 47 billion yuan ($6.88 billion) this year to expand its mobile- phone network.

The investments may help China Telecom offer wireless services to more than 300 cities by July, Chairman Wang Xiaochu said at a briefing in Hong Kong today. The company aims to attract 100 million mobile-phone subscribers by 2011, he said.

China Telecom, which today reported a 96 percent decline in annual profit, is boosting spending in the mobile-phone business acquired from China Unicom (Hong Kong) Ltd. last year to compete against China Mobile Ltd. in the world’s biggest phone market by users. The nation’s three carriers are rolling out third- generation services nationwide this year after getting licenses from the government in January.

Higher handset subsidies and lower tariffs aimed at boosting demand for mobile-phone services will lead to lower profit margins at China Telecom through 2012, Nomura Holdings Inc. analyst Danny Chu, who rates the company’s shares “buy,” wrote in a March 5 report.

China Telecom rose 1.9 percent to close at HK$3.19 in Hong Kong trading.

Net income last year tumbled to 884 million yuan from 24.2 billion yuan a year earlier after China Telecom booked a 24 billion yuan impairment charge on its Little Smart limited-range wireless service.

Source:Bloomberg