China Telecom Corporation Limited25 August 2010 | www.chinatelecom-h.com

Interim Results 2010Interim Results 2010

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ForwardForward--Looking StatementsLooking 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 Actof 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 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.

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Mr. Wang XiaochuChairman & CEO

Madam Wu AndiExecutive Vice President & CFO

Mr. Shang BingPresident & COO

Management TeamManagement Team

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Overview

Business Review

Financial Performance

AgendaAgenda

OverviewOverview

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HighlightsHighlights

Effective integrated operation driving

remarkable earnings recovery

To strengthen differentiation

development leveraging “Mobile Internet” to create

more value

Accelerate proactive broadband deployment to strengthen network edge

Mobile business growing rapidly with wireline

business structure further optimized

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Adjusted Results 1H2009 1H2010 ChangeOperating Revenue(RMB Mil) 102,554 107,552 4.9%EBITDA(RMB Mil) 43,339 45,759 5.6%

EBITDA Margin 42.3% 42.5% 0.2ppNet Profit(RMB Mil) 8,412 8,811 4.7%EPS(RMB) 0.104 0.109 4.7%Free Cash Flow(RMB Mil) 19,652 18,591 -5.4%

2009.12 2010.6 ChangeAccess Lines in Services (Mil) 188.56 181.07 -7.49Mobile Subs (Mil) 56.09 74.52 18.43Wireline Broadband Subs (Mil) 53.46 58.33 4.87

Note: Unless otherwise stated in this presentation1. All financial data are unaudited & adjusted to exclude Upfront Connection Fees2. EBITDA was calculated before CDMA Network Leasing Fees (1H2009: RMB3,583 mil; 1H2010: RMB6,365 mil) to enhance comparability3. Net Profit represents profit attributable to equity holders of the Company4. Free Cash Flow = EBITDA - CDMA Network Leasing Fees - CAPEX - Income Tax Expenses

Solid ResultsSolid Results

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Remarkable Earnings RecoveryRemarkable Earnings Recovery

Net Profit Profitable Scale Development

1H2009 1H20102H2009

� Leverage differentiated edge of integrated operation of mobile, wireline& Internet to ramp up mobile business expansion & continuous overall revenue growth

� Tilting resources towards high growth & high return businesses to achieve profitable scale development

� Scale benefit gaining momentum & driving remarkable earnings recovery

� To increase proactive initiatives in 2H2010 to further expand scale & strengthen long-term sustainable business development

RMB Mil

8,811

4,859

8,412

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+0.1pp +4.9pp+3.8pp-7.9pp

107,552

102,554

104

-8,145

3,947

-864

WirelineVoice

MobileData

WirelineData

WirelineOthers 1H2010Mobile

Voice

Overall Revenue+4.9%

RMB Mil

5,051

4,905

Mobile Others

+4.8pp -0.8pp

1H2009

Revenue Growth DriversRevenue Growth Drivers

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Rapid Mobile Expansion with Robust QualityRapid Mobile Expansion with Robust Quality

Subscribers

Service Revenue Highlights

Mil

2009.6 2009.12 2010.62008.12

RMB Mil

1H2009 2H2009 1H2010

Mobile Sub Market Share

� Mobile sub base expanding rapidly:1H2010 net add 18.43 mil

� Revenue & sub base growing in tandem with relatively stable ARPU: 1H2010 RMB58.1 vs FY2009 RMB59.5

� Mobile Data growing rapidly:Mobile Data/Mobile Revenue 34.5%

� Invigorated terminal supply chain:~700 models of CDMA handsets in supply (including >100 3G handset models)

� Open distribution channel achieving scale:Point-of-sales reached 560k ( 4x vs2009.1) (including GOME, Suning, D.Phone…)

22,77017,189

12,814

39.2856.09

9.5%7.7%

5.8%27.914.5%

74.52

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Optimizing Optimizing WirelineWireline Business Structure to Business Structure to Proactively Alleviate RiskProactively Alleviate Risk

Proactively Alleviating RiskOptimized Wireline Business Structure

1H2009 1H2010Wireline Voice RevenueWireline Non-Voice Revenue/Total Wireline Revenue

Wireline Non-Voice Revenue

RMB Mil

-19.8%

8.9%1H2009 1H2010

PAS RevenueRMB Mil

-56.5%6,567

2,859

1H2009 1H2010

3,3842,541

With progressive cancellation of Inter-district Call Tariff, this portion of revenue will become Intra-district Call Revenue

41,060

45,492

32,915

49,543

82,45886,552

60.1%52.6%

-24.9%Inter-district Call RevenueRMB Mil

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Accelerate Proactive Broadband Deployment Accelerate Proactive Broadband Deployment to Strengthen Network Edgeto Strengthen Network Edge

CAPEXSpeed Up Broadband Development

38,04244,000

RMB Mil

2009 2010E

17,91817,033

39,000

OriginalBudget

Adjusted 2010 Budget

1H CAPEX

20M+

>70% by end 2011 close to full coverageby end 2012

Enhance Core Competence

� 2010 extra CAPEX: RMB5 bil2011 extra CAPEX: ~RMB10 bil(Adjusted 2011 provisional CAPEX budget(≈ RMB50 bil) to be determined in early 2011 with regard to the latest business development)

� Total broadband net add target for 2010 & 2011 >20 mil (i.e. 3 mil extra)

� To enhance corporate value:Net revenue from extra broadband net add (less relevant cash expense)> Incremental depreciation of extra CAPEX

� Enhance core competence:Customer access bandwidth capability(Coverage in cities)

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Driving corporate & customersDriving corporate & customers’’ valuevalue

Full Services Integrated Operation Gaining Full Services Integrated Operation Gaining Momentum & EdgeMomentum & Edge

Enhancing customersEnhancing customers’’ satisfaction & loyaltysatisfaction & loyalty

Differentiated & Differentiated & integrated operation driving corporate & customersintegrated operation driving corporate & customers’’ valuevalue

ConvergedConverged platforms,platforms,products, services & channels products, services & channels

to facilitate integrated to facilitate integrated operationoperation

Centralized & highly Centralized & highly efficient resource allocation efficient resource allocation with coordinated operationwith coordinated operation

across multiacross multi--servicesservices

Seamless Seamless services & services & applications applications on multion multi--screens & screens &

multimulti--devices devices accessaccess

> 58 mil > 58 mil wirelinewirelinebroadband subsbroadband subs

Mobile subs bundling penetration:

50% (same as 2009)OneHome subs/Household subs:

40% ( 8pp vs 2009)BizNavigator SME penetration:

48% ( 5pp vs 2009)

> 74 mil mobile subs> 74 mil mobile subs

> 180 mil > 180 mil access access lines in lines in servicesservices

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Differentiated Operation Enhancing Differentiated Operation Enhancing Core CompetenceCore Competence

Government & Government & EnterpriseEnterprisecustomercustomer

Household customerHousehold customer

Personal customerPersonal customer

To lead corporate information market & gain high value customers via compelling industry specific applications

To maintain edge & increase customer contribution via attractive fixed-mobile integrated services offering

To increase data usage & customer value via extensive CP/SP partnerships and appealing applications leveraging 3G operation

Persisting in differentiated operation strategy & focusing on 3 target

customer groups to create new core competence

Leveraging mobile internet development to accelerate

transformation & innovation to capture

future growth opportunities Providing superior infrastructure & services

3rd party apps via extensive cooperation

Enhancing Core Competence

Self-developed

seededapps

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Business ReviewBusiness Review

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Revenue BreakdownRevenue Breakdown

Note:1. 1H2010 Wireline Voice Revenue included RMB19,799 mil from local voice, RMB7,683 mil from DLD, RMB952 mil from ILD and RMB4,481 mil from interconnections2. Mobile Others mainly included revenue from sales of terminals

RMB Mil 1H2009 1H2010 ChangeWireline 86,552 82,458 -4.7%Voice 1 41,060 32,915 -19.8%Data 42,567 46,514 9.3%

Internet Access 23,181 26,739 15.3%VAS & Integrated Information Services 13,859 13,713 -1.1%Managed Data & Leased Line 5,527 6,062 9.7%

Others 2,925 3,029 3.6%Mobile 16,002 25,094 56.8%Voice 9,051 14,102 55.8%Data 3,763 8,668 130.3%Others 2 3,188 2,324 -27.1%Total 102,554 107,552 4.9%

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� Mobile revenue as growth driver� Mobile revenue/Total revenue:

23.3% ( 7.7pp yoy)� Mobile revenue 56.8% yoy

� Further optimized mobile revenue mix � Mobile data/Total mobile

revenue: 34.5% ( 11pp yoy)

� Further mitigated risk in wirelineoperation� Wireline non-voice/Total

wireline revenue: 60.1% ( 7.5pp yoy)

Mobile

Wireline

25,094

82,458

Voice

Data

56.2%( 0.4pp)

34.5%( 11pp)

Others9.3%

( 10.6pp)

Voice39.9%

( 7.5pp)Non-voice

60.1%( 7.5pp)

RMB Mil

Revenue Structure Further Optimized1H2010 Revenue Structure

Full Service Revenue StructureFull Service Revenue Structure

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Major Initiatives

� To stabilize voice consumption and enhance customer stickiness & value by promoting package deals & enriching applications

� To alleviate PAS operation risk by migrating mid-to-high end PAS subs to mobile service while strictly controlling cost of PAS operation to ensure profitability

� To strengthen customer retention & stickiness by enhancing customer care program & churn alert system

WirelineWireline Voice ServicesVoice Services

Voice Usage

1H2009 1H2010

Local Usage (Pulses Mil) 166,638 128,778

DLD Usage (Minutes Mil) 43,359 36,339ILD Usage (Minutes Mil) 629 590

Access Lines in Services

Mil 2009.6 2009.12 2010.6Household 114.8 112.2 111.1Government & Enterprise 30.8 32.1 33.6Public Telephone 15.3 15.1 14.8PAS 38.5 29.2 21.6Total 199.4 188.6 181.1

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4.41

RMB Mil26,302

53.46

22,745

Broadband ARPU (RMB)

Mil

81.2

Net Adds

1H2009 1H2010

78.4

2010.62009.12

4.8758.33

� To expand customer base & sustain leading market position� Accelerate fiber access network

deployment & bandwidth upgrade � Enrich broadband applications to

promote usage� To leverage the highly integrated wireline &

wireless broadband operation providing customers with one unified account to enhance their experience & value

� To strengthen broadband servicing capability & edges to enhance premium branding of “eSurfing Broadband” and customer perception

Major InitiativesMajor InitiativesBroadband Access Revenue

Subscribers

Accelerating Accelerating WirelineWireline Broadband DevelopmentBroadband Development

15.6%

4.7849.05

2009.6

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RMB Mil

IT Services & ApplicationsRMB Mil

“Best-Tone” Type of Information ServicesRMB Mil

2,450

2,328

1H2009

12,031

1H2009

13,859

1H2010

1H2010

13,713

2,625

12,879

Ex-PAS related Wireline VAS & Integrated Information Services revenue

1H2010

2,858

PAS-related revenue

� To capture growing demand for informatization by enriching content of VAS & integrated information services

� To expand services usage & penetration by follow-on targeted marketing of VAS usage

� To sustain services development by widening mode of cooperation & deepening open collaboration on applications

Major InitiativesMajor InitiativesRevenue

Key Services

WirelineWireline VAS & Integrated Information ServicesVAS & Integrated Information Services

1H2009

7.0%

16.7%

12.8%

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Strategy

Mobile Service RevenueRMB Mil

MOUMin

1H2009 1H2010

12,814

22,770311 331

Mobile KPIs Trending Upward

3G Subscribers

2009.12 2010.6

4.07

7.18Mil

� Leverage differentiated offerings to expand sub base

� Adjust tariff and package plans to promote data usage & reinforce data traffic operation

� Enhance targeted & experience-based marketing to improve brand awareness & customer satisfaction

� Promote a flat structure of distribution channel & foster scale development of the handset supply with priorities for mid-range & star handsets

3,763 8,668

Mobile data revenue

Mobile Services Gaining TractionMobile Services Gaining TractionMobile Data Service

2009.12 2010.6 Change

“189 mailbox” subs (Mil) 14.06 28.56 1x“eSurfing Live” subs (Mil) 4.31 9.84 1x“eSurfing” Video subs (Mil) 0.1 0.5 4xMobile Best Tone Usage (Mil) 13.7 18.5 35%

76.4%

77.7%

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To strengthen precision

management & converged operation to achieve synergy & differentiation edge

• Excel in-house development to drive high-value traffic

• Open platform to proliferate third-party products

Product R&DProduct R&D NetworkNetwork• Promote broadband network upgrade to support high bandwidth business development

• Optimize EVDO network to strengthen wireline-wireless integrated service capability

Distribution Distribution channelchannel• Establish open and well-coordinated distribution channel for full services offering

• Achieve synergy between open and self-operated channels

Service SupportService Support• Offer premium customer service to improve overall customer satisfaction

• Strengthen targeted customer retention, especially formid-to-high end customers

Terminal SupplyTerminal Supply• Ride on “eSurfing”mobile internet handset to expand terminal market

• Scale development of mid-range, star handsets and smartphones

Solid Execution Driving to SuccessSolid Execution Driving to Success

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Financial PerformanceFinancial Performance

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RMB Mil 1H2009 1H2010 ChangeOperating Revenue 102,554 107,552 4.9%Operating Expenses 88,827 93,997 5.8%Depreciation & Amortization 26,029 25,839 -0.7%Network Operations & Support 20,133 22,812 13.3%Incl: Mobile Network Leasing 3,583 6,365 77.6%

Personnel 16,351 17,196 5.2%SG&A 17,595 19,752 12.3%Incl: Mobile Handset Subsidies 4,839 6,098 26.0%

Interconnection & Others 8,719 8,398 -3.7%Incl: Wireline Interconnection

Mobile InterconnectionCost of Mobile Terminals Sold

3,2051,3972,741

2,7082,5851,804

-15.5%85.0%-34.2%

Operating Profit 13,727 13,555 -1.3%Net Profit 8,412 8,811 4.7%EBITDA 43,339 45,759 5.6%

Key Financial InformationKey Financial Information

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1H2009 1H2010

87.4%86.6%

24.0%

16.0%

18.4%

25.4%

19.6%

15.9%

17.2%

4.0%

21.2%

� Depreciation & Amortization: 1.4pp via stringent CAPEX control in prior years� Cash operating expenses: 2.2pp to strengthen full services operation� SG&A： 1.2pp mainly due to

measured increase in mobile handset subsidies (26.8% of mobile service revenue) to promote rapid scale development; G&A 0.3pp

� Network Operations & Support:1.6pp mainly due to increase in

mobile network leasing fees� Personnel: Stable� Interconnection: 0.4pp mainly due

to higher mobile interconnection expenses

Operating Expenses as a % of Operating Revenue Optimized Cost Structure

Optimized Cost StructureOptimized Cost Structure

4.5%2.9%4.9%

Depreciation & AmortizationNetwork Operations & Support

SG&A

Personnel

InterconnectionCost of Terminal Sales & Others

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1

2

3

4

• Increase marketing & servicing initiatives, tilting towards high growth & high return businesses

• Implement stringent handset subsidy policy, reducing subsidy-to-mobile service revenue % gradually

• Compress G&A expenses, strictly controlling indirect operating expenses

• Appropriately increase investment in marketing & R&D personnel cost to empower the workforce for full services operation

SG&A

Network Operations & Support

Personnel

Depreciation & Amortization

• Assure network maintenance initiative to ensure leading network quality• Implement precision management & reasonably control costs, like power &

maintenance costs

Proactive Cost Strategy to Support Full Services Proactive Cost Strategy to Support Full Services DevelopmentDevelopment

• Strengthen CAPEX management & strictly control low return investments• Enhance resource utilization by actively redeploying or dealing with inactive

assets

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CAPEX Structure � Accelerate broadband access network construction & optimization to enhance capability for servicing bandwidth-intensive business & consolidate leading edge for sustainable development

� Tilting investment towards transformation businesses & strictly controlling CAPEX on traditional wirelinevoice services; enhancing network capabilities for supporting transformation

4M+: 95%20M+: 44%

8.7 mil broadband access capacity in 1H2010Customer access bandwidth capability

Coverage in cities

Infrastructure & Others

Wireline Voice

VAS & Integrated Information ServicesIT & Support

Note: 1. Broadband & Internet includes data network, transmission network, broadband access equipment & cable

2. VAS & Integrated Information Services includes VAS platform & ICT3. Wireline Voice includes switches, voice access equipment & cable4. IT & Support includes enterprise informatization services5. Infrastructure & Others includes air-conditioning supply facilities,

conduits, buildings, minor purchases, R&D, etc.

Rationalized CAPEX StructureRationalized CAPEX Structure

Broadband & Internet

1H2009 1H2010

4.6%

17.4%

58.5%

15.9%

3.6%

14.6%

64.0%

15.8%

2.4%3.2%

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1H2009 1H2010 1H2009 1H2010

0.97

0.66

32.0%

27.5%

Solid financial strength, strong free cash flow & robust repayment capability well support sustainable development

Solid financial strength, strong free cash flow & robust repayment capability well support sustainable development

Total Debt/Total Capitalization Net Debt/EBITDA*

Note: * Net Debt/Simple Annualized 1H2010 EBITDA

Solid Financial StrengthSolid Financial Strength

-4.5pp -0.31x

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To accelerate financial structure optimization to promote change of corporate development

mode

Promoting Coordinated Sustainable Development Promoting Coordinated Sustainable Development via Financial Management Transformationvia Financial Management Transformation

To reinforce financial decision support & value

management capability with strategy focused & value management oriented

To establish a comprehensive EVA-oriented value

management system to increase capital utilization

To strengthen internal control to improve risk management capability

Enhancing Enhancing ShareholdersShareholders’’

ValueValue

30www.chinatelecom-h.com

Thank YouThank You

For further information & enquiries, please contact our Investor Relations Department atir@chinatelecom-h.com

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Appendix 1Appendix 1 Extracted from unaudited consolidated statement of comprehensive income for the 6 months ended 30 June 2010(incl. upfront connection fees)Extracted from unaudited consolidated statement of comprehensive income for the 6 months ended 30 June 2010(incl. upfront connection fees)

RMB Mil 1H2009 1H2010Operating Revenue 103,146 107,817Upfront Connection Fees 592 265

Operating Expenses (88,827) (93,997)Net Finance Costs (2,268) (1,855)Investment Income, Share of Profits of Associates 75 37Profit Before Taxation 12,126 12,002Income Tax (3,071) (2,885)Profit for the Period 9,055 9,117Equity Holders of the Company 9,004 9,076Non-controlling Interests 51 41

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Extracted from unaudited consolidated statement of financial position as at 30 June 2010 (incl. upfront connection fees)Extracted from unaudited consolidated statement of financial position as at 30 June 2010 (incl. upfront connection fees)Appendix 2Appendix 2Appendix 2

RMB Mil 31.12.2009 30.6.2010Current Assets 60,936 56,325Non-current Assets 365,584 355,271Total Assets 426,520 411,596Current Liabilities 143,481 136,616Non-current Liabilities 60,426 49,416Total Liabilities 203,907 186,032Total Equity 222,613 225,564Equity Attributable to Equity Holders of the Company

221,732 224,716

Non-controlling Interests 881 848