China Telecom reports 2.7% dip in profits

China Telecom, China's biggest phone company, said its 2006 profits fell 2.7% amid slow growth for its core fixed-line business but total revenues rose on strong demand for Internet and other new services, according to an Associated Press report.

The report said the carrier's net profit was 27.1 billion yuan ($3.5 billion), the Beijing-based company said. It said revenue from Internet services rose 32% while local phone revenues fell 3.5%. Total revenues grew 3.4 % to 175 billion yuan ($22.6 billion).

China Telecom, which is traded on the Hong Kong stock market, did not release quarterly results, the report said.

China's fixed-line phone carriers are expanding broadband, Internet-based TV and other new services to make up for slowing growth as more potential customers opt for mobile phones, the report further said.