China Telecom expects to face tougher competition after its 2013 net profit hit a six year high - 17.55 billion yuan (HK$22 billion) - up 17.4 percent from 2012, beating estimates.
Revenue from its mobile arm jumped 28.3 percent last year to 151.2 billion yuan, accounting for almost half of overall revenue.
China's third-largest telecom operator, which has a mobile subscriber market share of about 15 percent, saw the number of third-generation mobile users jump 49 percent to 103 million as many 2G subscribes started using 3G services.
Average revenue per user monthly rose 1.7 percent to 54.8 yuan, but that for 3G users fell 0.4 percent to 71.5 yuan. The carrier also recorded a net loss of 580,000 in the first two months this year amid 4G package promotions offered by rivals China Mobile (0941) and China Unicom (0762) in December.
The firm is yet to announce its 4G mobile plan and is still applying for the LTE-FDD network license.
Chief executive Wang Xiaochu said yesterday keen competition "will surely lead to lower 4G fees." Asked if China Telecom would be keen to bid for 3G spectrum in Hong Kong, Wang signaled he may cooperate with existing operators.
A 9.5 HK cents final dividend was proposed. The shares fell 1.3 percent to HK$3.15 yesterday.