China Telecom

JP Morgan China Conference 2006

Ms. Wu Andi

CFO of China Telecom

26 April 2006Beijing

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. 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.

Forward-Looking Statements

Highlights of 2005 Performance

Solid Operating PerformanceSolid Operating Performance

Strong Free Cash FlowStrong Free Cash Flow

Effective CAPEX ControlEffective CAPEX Control

Strategic Transformation on TrackStrategic Transformation on Track

Steady growth in revenue and net profit

Supportive of future investment and enhanced cash return to shareholders

Ensuring investment return and sustainable growth

To secure a promising prospect

20052004 Growth

Continuous growth in subscribers, revenue and net profit

DPS (HKD)

EPS (RMB)

Net Profit * (RMB Mil)

EBITDA Margin

EBITDA (RMB Mil)

Operating Revenue (RMB Mil)

Broadband Subs (Mil)

Access Lines in Service (Mil)

15.4%

5.2%

8.0%

-1.1pp

4.2%

6.4%

51.9%

12.6%

0.0750.065

0.2610.248

21,13119,565

50.3%51.4%

81,82578,542

162,529152,754

21.0213.84

210.09186.65

Key Performance Indicators of 2005(Excl. Connection Fees)

Note: * Net profit used hereinafter represents profit attributable to equity holders of the company.Unless otherwise stated, all financial data used hereinafter exclude upfront connection fees.

Key Performance Indicators of 1Q 2006

1Q 2006*

53.5%EBITDA Margin

5,908Net Profit (RMB Mil)

22,339EBITDA (RMB Mil)

7.3%Annual Growth of Operating Revenue

41,760Operating Revenue (RMB Mil)

2.14Net Adds of Broadband Subs (Mil)

23.16Broadband Subs (Mil)

5.09Net Adds of Access Lines in Service (Mil)

215.18Access Lines in Service (Mil)

* All data of 1Q 2006 used hereinafter were un-audited.

Steady growth in subscribers and revenue

Benefited from the seasonal strength, EBITDA margin was raised to 53.5%

Operating Revenue

38,92041,700 41,060 40,849 41,760

Operating Revenue

RMB Mil

RMB 41.76 billion of operating revenue in 1Q 2006, an increase of 7.3%, over the same period of 2005

Revenue from voice business stabilizing

Internet access and VAS remain as key drivers for revenue growth

1Q20061Q2005 2Q2005 3Q2005 4Q2005

Net Adds of Access Lines

7.30

4.463.23

5.09

Mil

2Q2005 4Q20053Q2005 1Q2006

Residential Enterprise Public Telephone PAS

1.28 0.94 0.761.97

0.670.41 0.35

0.280.530.46 0.35

0.39

4.83

2.65

1.77

2.45

Continued Growth in Access Lines

Composition of Net Adds of Access Lines

38.7%

48.1%

5.5%7.7%

2005

1Q200663.6% 7.1%

8.1%

21.2%

PAS

PAS Subscribers

Mil

15.9%

22.6%27.2%

59.5

42.2

25.6

57.1

2003 2004 2005 1Q2006

27.7%

Strategies and Progress

Enhance revenue from VAS over PAS

Reduce PAS investment plan

Lower handset subsidy

Improve PAS network utilization

Strengthen bundling with other services

1Q2006： more than 100%

2006： ↓ more than 50%

1Q2006: about 70%

PAS Subs/Access Lines in Service

Voice Usage

1Q2005 1Q2006

Pulse in Bil

Local Voice Usage

107.82 106.65

-1.1%

1Q2005 1Q2006

Minute in Bil

Domestic Long Distance Usage

21.3323.02

+7.9%

1Q2005 1Q2006

Minute in Bil

International LongDistance Usage

0.38 0.39

+2.6%

Implementing targeted marketing and bundled services to maintain voice usage stable

Robust Broadband Business

1.881.65

1.80 1.85

2.14

Net Adds of Broadband Subs

Mil

1Q20061Q2005 2Q2005 3Q2005 4Q2005

Broadband market is growing strongly in a sustainable way

To double broadband subscribers in 3-4 years

Broadband ARPU in 1Q 2006 remained relatively stable

Improve high-end users contribution by differentiated services

Rapid Growing VAS

26% 24%

135%

29%

Major Growth of VAS Revenue in 1Q 2006

Major VAS

Caller ID

SMS

Color Ring Tone

Telephone Information Service

Integrated Information Services

Penetration rate: 64.2%, ↑ 1.6pp

Usage: ↑ 74%

Penetration rate: 39%, ↑ 7pp

Caller ID Telephone Information

Service

SMS & Color Ring

Tone

Integrated Information

Services

Include: BestTone, China V-Net, BizNavigator and system integration

Favorable Start-up of Integrated Information Services

4446

51

BizNavigator Subscriber

Thousand

2006.1 2006.2 2006.3

+4.6%+8.7%

2.682.85

3.07

Daily Call-in Usage of BestTone

Pulse in Mil

2006.1 2006.2 2006.3

+6.3%+7.7%

Development Measures for 2006

Facing enormous pressure on revenue growth, due to intensified mobile substitution

Endeavor to stabilize voice business and, continuously develop broadband business, VAS and integrated information services

Controlled cash cost to maintain EBITDA margin at relatively high level

Stringent Cost Control

Ensuring steady growth of profitability

Continuously reduce capital expenditure, lower the ratio of depreciation and amortization to revenue

Enhance the control on repair costs, personnel and administrative expenses

Optimize finance structure to reduce finance cost— Issued RMB 10bn 6-month Short Term Commercial Paper (2.54% p.a.)

in October 2005

— Issued RMB 20bn 1-year Short Term Commercial Paper (3.05% p.a.) in April 2006

Strengthen Internal Control

The operational management has been tested and evaluated in accordance with the internal control policy per COSO system

Reducing corporate risk and further enhancing operating efficiency

Continuously improving information disclosure and perfecting corporate governance

Continue to strengthen internal control and reinforce management towards international best practices

Promising Prospect

Achieve robust

financial results

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ions Maximize shareholders’ valueMaximize shareholders’ value

Stringent control on investment

Increase contribution of non-voice business

Strengthen development of Internet access & VAS

Expand integrated information service

Enrich video communication business

“Triple-play” and “Fixed-Mobile Convergence”

Fully leverage existing resources to consolidate

traditional fixed line business