China Telecom's net income plunged 96% last year thanks to a hefty writedown on its Xiaolingtong business.
The fixed-line leader wrote down the PHS operation by 24 billion yuan ($3.5 billion), knocking full-year profit down to 884 million yuan.
Revenue rose just 3.3% to 186.8 billion yuan as customers deserted its legacy voice business. Wireline voice revenue fell 15.3 billion yuan and the number of access lines in service declined 5.6% - or 12.3 million - to 208 million.
But chairman and CEO Wang Xiaochu said the underlying business was solid, with free cash flow of 35.6 billion yuan. Ebitda margin was 45.3% compared with 49.9% in 2007.
Non-voice revenue accounted for 46.1% of wireline revenue in 2008, and information services revenue climbed 44.6% to 4.8 billion yuan.
Broadband access sales totaled 40.24 billion yuan, more than a fifth of all sales, and contributed 5.0 points to growth, Wang said. Broadband subs were up 8.53 million to 44.27 million.
Wang said that the CDMA business shrank in the last two months of 2008 after China Telecom took over the operation from Unicom.
But it signed 2.7 million CDMA customers in the first two months of 2009 to take total subs to 30.6 million at the end of February.