China Netcom Group Corp., the country's second-biggest fixed-line phone carrier, said first- half profit rose 12 percent as higher sales of high-speed Internet services compensated for lower phone revenue.

Net income climbed to 5.88 billion yuan ($859 million), the Beijing-based company said today in a statement to the Hong Kong stock exchange, without providing comparative figures. The profit, which excluded gains from connection fees, beat the 5.3 billion yuan median profit estimate of five analysts in a Bloomberg survey.

Sales fell 0.2 percent to 40.6 billion yuan, the statement said. Connection fees refer to one-time charges paid by customers to subscribe to fixed-line services. The fees, which were stopped in 2001, are being amortized over 10 years by fixed-line companies.

Source:Bloomberg