China Telecom Corporation Limited

31 March 2008
www.chinatelecom-h.com
Forward-Looking Statements

Certain statements contained in this document may be viewed as “forward-looking

statements” within the meaning of Section 27A of the U.S. Securities Act of 1933
(as amended) and Section 21E of the U.S. Securities Exchange Act of 1934 (as
amended). Such forward-looking statements are subject to known and unknown
risks, uncertainties and other factors, which may cause the actual performance,
financial condition or results of operations of China Telecom Corporation Limited
(the “Company”) to be materially different from any future performance, financial
condition or results of operations implied by such forward-looking statements. In
addition, we do not intend to update these forward-looking statements. Further
information regarding these risks, uncertainties and other factors is included in the
Company’s most recent Annual Report on Form 20-F filed with the U.S. Securities
and Exchange Commission (the “SEC”) and in the Company’s other filings with the
SEC.

2
Management Team

Mr. Wang Xiaochu Chairman & CEO

Mr. Leng Rongquan Executive Director, President & COO

Madam Wu Andi Executive Director, EVP & CFO

3
Agenda

Overview

Business Review

Financial Performance

4
Overview
Highlights

Strategic Rapidly growing non-

transformation voice business
successfully effectively alleviates
consolidates operating risk
revenue and profit

Strong free cash Optimized CAPEX

flow greatly structure significantly
supports future enhances competitive
development edges

6
Solid Results (Excl. Connection Fees)

2006 2007 Growth

Access Lines in Services (Mil) 223.04 220.33 -1.2%

Broadband Subs (Mil) 28.32 35.65 25.9%

Operating Revenue (RMB Mil) 170,645 175,362 2.8%

EBITDA (RMB Mil) 84,866 85,974 1.3%
EBITDA Margin 49.7% 49.0% -0.7pp
Net Profit* (RMB Mil) 22,270 22,517 1.1%
EPS* (RMB) 0.275 0.278 1.1%
Free Cash Flow** (RMB Mil) 28,991 33,964 17.2%

Note: Unless otherwise stated, all financial data used hereinafter exclude upfront connection fees
* Excluding the impact of revaluation in 2007 of property, plant & equipment every 3 years (see slide 25)
** Free Cash Flow = EBITDA (Excl. connection fees) – CAPEX – Income Tax

7
IFRS-based Results (Incl. Connection Fees)

2006 2007

Operating Revenue (RMB Mil) 175,616 178,656

EBITDA (RMB Mil) 89,837 89,268

EBITDA Margin 51.2% 50.0%

Net Profit* (RMB Mil) 27,241 23,702

EPS (RMB) 0.337 0.293

Note: * Unless otherwise stated, net profit used in this presentation represents profit attributable to equity holders of the Company

8
Revenue Growth Drivers

-5.6pp +4.5pp +2.9pp +1.0pp 2.8% Contribution

RMB Mil
5,028 1,672
-9,599 +2.8%
7,616

175,362
170,645

2006 VAS & Managed Data, 2007

Voice Internet Integrated
Information Leased Line &
Business* Access
Services Others

Note: * Voice Business Revenue includes Monthly Fees, Local Usage Fees, Upfront Installation Fees, DLD/ILD and Interconnection Revenue

9
Proactively Managing Voice Challenges
Steady Aggregate Revenue
Major challenges in voice business
RMB Mil +2.8%
175,362
z Rapidly declining mobile voice tariff
170,645
(-17.7% yoy) & new means of
49,734 .8% 64,050 communications
+28
-Voice revenue 7.9%
-Voice ARPU: RMB41.8 10.1%
120,911 -7.9% 111,312
Major initiatives
z Strengthen integrated development
2006 2007 of voice and non-voice businesses
Voice Revenue Non-Voice Revenue
to improve voice services’ value to
Revenue Growth by Customer customers and mitigate voice
revenue decline
Segments in 2007
11.2% z Target at key customer segments
CT’s overall revenue
like government & enterprise and
4.3% growth (+2.8%) household customers
z Strictly control marketing expense
Government
& Enterprise
Household Individual on low-end customers to ensure
return
-13.9%
Share of
Revenue: 33.8% 48.0% 18.2%

10
Strategic Transformation Gaining Momentum
Non-Voice Revenue
Accomplishments
RMB Mil +28.8%
+24.9%
64,050
49,734
Robust non-voice revenue
39,828 growth supported steady
36.5% aggregate revenue and healthy
29.1%
24.4% fundamental
Optimized revenue structure
2005 2006 2007 effectively alleviated operating
Non-Voice Revenue as a % of Operating Revenue
risk
Non-Voice Revenue
Non-voice revenue as a % of
Composition in 2007
operating revenue:
21.1% Internet 06: 4.7pp
( 14.2% yoy)
Access 07: 7.4pp
VAS &
30.0% Integrated
( 35.4% yoy) 48.9% Information Enhanced core competitiveness
Services
( 32.1% yoy) & sustainable development
Managed
Data,
Leased Line
& Others

11
CAPEX

CAPEX Reducing CAPEX to enhance

return; Optimizing structure to
Vs. 07E saving of
promote development
Include an extra
RMB Mil RMB1,442 mil RMB960 mil due
to snowstorm
Continuous CAPEX reduction leads to
-7.2%
-1.2%
progressive decline of depreciation &
49,116
amortization expenses as a % of operating
45,000 revenue and enhances operating return
45,558

Tilting investments towards transformation

28.8% business to drive revenue
26.0%
Revenue Investment
Broadband
32.9% yoy
Access
VAS & Integrated 27.3% yoy
Information 35.4% yoy
2006 2007 2008E Services

CAPEX as a % of Operating Revenue

12
Acquisition of Beijing Telecom
Earnings Accretive Acquisition

China Telecom
Corporation Limited
China RMB5,557 Leveraging the business
opportunities in the capital city
Telecommunications million (political, economic and
cultural center)
Group
Enhancing services to our key
government & enterprise
customers with headquarters
in Beijing

Performance of
Beijing Telecom in 2007

Revenue: RMB2,455 mil

Net Profit: RMB470 mil

Note: The above financial data are unaudited and IFRS-based

13
Dividend

Dividend Per Share

The Board of Directors
HKD recommended a final dividend
of HKD0.085 for 2007
0.085 0.085

Proper balance between

shareholders’ cash return demand
and company’s future investment
needs, especially the funding
requirement for coming full services
offerings

2006 2007

14
Driving Transformation to Enhance Value

Enhancing Shareholders’ Value

Integrated
Proactive
Preparation for Information Services
Customer-focused Provider
Full Services
Operations Innovative Informatization
Strategies Quadruple
Talents Pool Full Services Play
Seize Leading Advantages Offering
Brand in Information Services
Management Integrated and Fixed + Mobile
bundled services of
Customer-focused fixed and mobile + +
Capital
Accumulation businesses Media + Data
Market Segmentation
Integrated
Network Capturing Opportunities development of fixed
Enhancement
and mobile
broadband
FMC
Information
Services

Enriching Customers’ Life

15
Business
REVIEW
Revenue Breakdown

2006 2007 Share of

Growth Operating
（RMB Mil） （RMB Mil）
Revenue
Local Voice
Upfront Installation Fees 2,913 2,735 -6.1% 1.6%
Monthly Fees 28,973 25,346 -12.5% 14.4%
Local Usage Fees 46,188 42,343 -8.3% 24.1%
Sub-total 78,074 70,424 -9.8% 40.1%
Long Distance 28,742 27,009 -6.0% 15.4%
Interconnections 14,095 13,879 -1.5% 7.9%
Internet Access 23,724 31,340 32.1% 17.9%
VAS & Integrated 14,203 19,231 35.4% 11.0%
Information Services
Managed Data, Leased Line 11,807 13,479 14.2% 7.7%
& Others
Total 170,645 175,362 2.8% 100%

17
Local Voice Business

Local Voice Business Consolidating Traditional

Businesses via effective bundling
Usage Revenue
with Transformation Businesses
Pulses RMB
-3.9% -9.8% Government & Enterprise
Mil Mil
customers: Promoting
422,562 78,074 “BizNavigator” to stabilize usage
406,268 70,424
-Revenue 11.2% yoy

Household customers: Leveraging

“One Home” to consolidate
2006 2007 2006 2007 household market
-Revenue 4.3% yoy
Access Lines in Services Individual customers: Severe
challenge due to intensified mobile
Mil 223.0 220.3 substitution especially on PAS
-Revenue 13.9% yoy
PAS 58.0 PAS
62.7 Individual
Public 15.5 15.7 Public
Telephone
To strengthen bundled packages to
Telephone Government
22.5
& Enterprise 24.8 consolidate high-end PAS subs while
strictly controlling marketing
expense on low-end customers to
122.3 Household 121.8 ensure return

2006.12 2007.12

18
Long Distance Business
Domestic Long Distance

Usage Revenue Consolidating Long

Minutes
Mil
+2.8% RMB
-5.4% Distance Business
Mil
95,567 98,251
25,517 24,127
Intensified competition in long
39.2%
32.8% 15.0% 13.8% distance market led to continuous
decline in average unit price;
avoiding direct price competition and
2006 2007 2006 2007
stimulating long distance usage by
customized bundling packages
International Long Distance - DLD usage 2.8% yoy
Usage Revenue - ILD usage relatively stable
Minutes -0.8% RMB
Mil Mil -10.6% Leveraging flexible strategies to
promote integrated development of
1,601 1,588
3,225 voice and integrated information
2,882
45.8%
services
42.5%
1.9% 1.6%

2006 2007 2006 2007

Market Share by Usage
Long Distance Revenue as a % of Operating Revenue

19
Broadband Business
Broadband

Subs Access Revenue Profitable Scale Development

with Differentiated Operations
Mil +25.9% RMB +32.9%
35.65 Mil 30,768
7.33
Broadband subs 7.33 mil with
28.32 23,147
7.30
ARPU slightly increased to RMB 80
80
in 2007
77
To realize wireless access roaming
for broadband subs by enriching
2006.12 2007.12 2006 2007 means and convenience of access
Net Adds Broadband ARPU (RMB)
To fully implement broadband
Government & Household & account number operation &
Enterprise Individual
promote co-operation and
Office Security Online Search customization of terminal devices,
Automation Control Music Engine Internet applications and content
ERP Online
To strengthen interactive promotion
Systems Video
of Internet access & application
Virtual e-administration businesses
Systems VOIP e-Payment
Network
Internet
…… Banking e-Trading ……
Systems

20
VAS & Integrated Information Services
Revenue
Strategies
RMB Mil
+35.4%
Fixed-line VAS: Focus on services
19,231
like fixed-line color ring-tone,
14,203 fixed-line payment, phone-radio…
11.0% to increase VAS penetration and
8.3% promote scale development
Internet VAS: Integrate VNet with
2006 2007 content resources and enrich
VAS & Integrated Information Services Internet applications like
Revenue as a % of Operating Revenue
searching, digital music, One
Home customer terminals... to
Revenue Growth & Mix in 2007 enhance customer brand value
and stimulate consumption
Revenue Growth
415.8%
155.5% Integrated Information Services:
56.0% 108.1% 90.1%
19.5% Consolidate telephone number
resource services and explore
69.8% Revenue Mix demand from government &
enterprise customers to promote
12.6% 8.4%
the scale development of Best
2.2% 3.8% 3.2%
Tone and IT Services &
Fixed-line Internet IT Services & Enterprise Best Tone Video
VAS* VAS** Applications Informatization Applications Applications
Applications

Note： * Fixed-line VAS mainly includes Caller-ID, Telephone Information Services, SMS & Color Ring Tone
**Internet VAS mainly includes VNet, IDC, IP/VPDN 21
Scale Development of Transformation Businesses

IP Enhance value
Communications through integrated &
differentiated services

Golden
Opportunity
Information Information Leverage
Focus on
Services Technology extensive
converged
communications
areas of “3Is”
infrastructure

D e v el o p ment
zation
Informati Excavate new
informatization demand
from customers

Customer-focused Customer-focused
operation & resource
allocation

22
Financial
Performance
Key Financial Information

2006 2007
Change
(RMB Mil) (RMB Mil)

Operating Revenues 170,645 175,362 2.8%

Operating Expenses

Depreciation & Amortization 51,301 52,257 1.9%

Network Operations & Support 31,055 31,622 1.8%

Personnel 26,210 27,242 3.9%

SG&A 22,259 23,667 6.3%

Interconnection & Others 6,255 6,857 9.6%

Sub-total 137,080 141,645 3.3%

Operating Profit 33,565 33,717 0.5%

Net Profit 22,270 22,517 1.1%

EBITDA 84,866 85,974 1.3%

24
Property, Plant & Equipment Revaluation

2007 Revaluation
Revalued PPE every 3 years per IFRS.
RMB Mil Overall net revaluation surplus
showed good asset quality
4,809

Per IFRS:
Revaluation Surplus Equity
Revaluation Deficit Income Statement

(2,755)

IFRS-based net profit: RMB23,702 mil

Ex-upfront connection
(3,294) mil
fees:
Ex-revaluation deficit &
2,109 mil
related tax impact:
Adjusted net profit: RMB22,517 mil
Revaluation Revaluation
Surplus Deficit

25
Cost Structure

Operating Expenses as a % of Operating Revenue

Operating
80.3% Expenses 80.8%

30.1% Depreciation & 29.8%

Amortization

18.2% Network Operations & 18.1%

Support

Personnel 15.5%
15.4%

SG&A
13.0% 13.5%

3.6% Interconnection & Others 3.9%

2006 2007

26
Optimized Cost Structure to Support Business Development

Cost Initiatives 2007 Results

z Depreciation &
Amortization z Depreciation &
Reduced depreciation as a % of Amortization
operating revenue continuously via
strict CAPEX control & enhanced RMB52,257 mil (-0.3 pp as a % of
resource utilization operating revenue)

z Network Operations & Strengthened cost control z Network Operations &

Support
Tilted and smoothed resource
allocation towards transformation
businesses to support development
z Personnel
Enhanced employees’ incentive &
strengthened recruitment of IP, IT
and IS talents
Support
Optimized cost structure RMB31,622 mil (-0.1 pp as a % of
operating revenue)
Maintained relatively stable
EBITDA margin
z Personnel
RMB27,242 mil (maintained
relatively stable as a % of
operating revenue)

z SG&A z SG&A
Promoted brand operation &
RMB23,667 mil (+0.5 pp as a % of
transformation businesses,
enhanced customer retention but operating revenue)
strictly controlled PAS handset
subsidy

27
Enhanced CAPEX Structure

CAPEX Structure
Enhanced CAPEX structure to support
RMB Mil strategic transformation
49,116 45,558 z Internet & Data 37.4% yoy
z IT Support -
29.5% z Fixed Line Switches 31.9% yoy
43.7% Internet &
Data z Local Transmission & Access 22.2% yoy
6.7% z PAS 63.4% yoy
10.5% z Others 24.8% yoy
7.2% IT Support

7.7% Fixed Line

24.0% Switches
Tilting investment to improve network
Local
20.1% Transmission capability for supporting transformation
6.0% & Access
2.4%
businesses while strictly controlling
PAS
CAPEX on traditional business
23.3% 18.9% Others*

2006 2007
Note: *Others include communication infrastructure and
other capital expenditure

28
Solid Financial Strength

Total Debt / Total Capitalization Free Cash Flow Net Debt / EBITDA
RMB Mil
-4.7pp +17.2% -0.23x
35.5%
33,964 1.21
30.8%
28,991
0.98

2006 2007 2006 2007 2006 2007

Solid financial fundamental and strong cash flow proactively equip the
Company to capture future growth opportunities

29
Innovative Measures to Drive Transformation

Tilting resource towards transformation

businesses to increase non-voice revenue
contribution and sustain steady aggregate revenue
Deepening

Strengthening cost management, treasury value

planning and resource utilization to improve
operating efficiency
management

to enhance
Improving risk management, enhancing internal
control and execution to ensure value creation
shareholders’

return
Increasing free cash flow, enhancing capital,
investment & asset structures to proactively
prepare for future full services offering

30
Thank
YOU

www.chinatelecom-h.com

31
 Extracted from audited consolidated income statement
Appendix 1 for the year ended 31 Dec 2007 (incl. upfront connection fees)

RMB Mil
2006 2007
(Restated)*

Operating Revenues 175,616 178,656

Upfront Connection Fees 4,971 3,294
Operating Expenses (137,080) (141,645)
Revaluation Deficit - (2,755)
Net Finance Costs (4,489) (4,300)
Investment Loss, Share of Profit from
36 295
Associates
Profit Before Taxation 34,083 30,251
Income Tax (6,759) (6,452)
Profit for the Year 27,324 23,799
Equity Holders of the Company 27,241 23,702
Minority Interests 83 97

Note: *Restatedto include the financial impact of acquisition of China Telecom (HK),
China Telecom (Americas) and China Telecom System Integration 32
 Extracted from audited consolidated balance sheet as at 31 Dec 2007
Appendix 2 (incl. upfront connection fees)

RMB Mil
2006 2007
(Restated)*

Current Assets 44,206 42,680

Non-current Assets 374,665 365,324
Total Assets 418,871 408,004
Current Liabilities 157,629 138,537
Non-current Liabilities 53,593 47,095
Total Liabilities 211,222 185,632
Total Equity 207,649 222,372
Equity Attributable to Equity Holders of
206,201 220,921
the Company
Minority Interests 1,448 1,451

Note: *Restatedto include the financial impact of acquisition of China Telecom (HK),
China Telecom (Americas) and China Telecom System Integration 33
 Detailed operating revenues breakdown
Appendix 3 for the year ended 31 Dec 2007 (incl. upfront connection fees)

RMB Mil 2006 2007

(Restated)*

Upfront Connection Fees 4,971 3,294

Local Voice Business 78,074 70,424
Upfront Installation Fees 2,913 2,735
Monthly Fees 28,973 25,346
Local Usage fees 46,188 42,343
DLD 25,517 24,127
ILD 3,225 2,882
Interconnections 14,095 13,879
Internet Access 23,724 31,340
VAS & Integrated Information Services 14,203 19,231
Managed Data 3,080 3,013
Leased Line 4,548 5,321
Others 4,179 5,145
Total 175,616 178,656

Note: *Restatedto include the financial impact of acquisition of China Telecom (HK),
China Telecom (Americas) and China Telecom System Integration 34