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President’s Statement
/ Annual Report 2011 /
1
Business Development
In 2011, the Group sustained its sound growth momentum in all of its three main businesses. The revenue from
telecommunications infrastructure (“TIS”) services realized a year-on-year increase of 16.1%, accounting for 46.9%
of total revenues. The Group allocated its resources flexibly as the market environment required and has committed
resources to support domestic telecommunications operators on key projects such as the upgrade and expansion of
the mobile network and fiber optic broadband network. TIS revenue from domestic telecommunications operators
increased by 15.1% over the same period last year, and was the major driving force for the growth of TIS services
during the period. In addition, in response to the enormous demand for domestic informatization construction and
telecommunications infrastructure construction from overseas customers, the Group devoted more efforts to the
development of the domestic non-operator market and the overseas market. The TIS revenues from these two
markets grew by 19.1% year-on-year in aggregate, and those two markets have become important driving forces for
the future growth of TIS business.
In 2011, business process outsourcing (“BPO”) services achieved a year-on-year increase of 20.6%, accounting for
41.7% of total revenues. Within this, network maintenance services secured relatively rapid growth and realized a
year-on-year increase of 23.6%. By leveraging its advantages in delivering integrated services, the Group provided
ancillary services such as the distribution of telecommunications machineries in response to customer requirements.
The Group’s revenues from the distribution of telecommunications services and products (“Distribution Business”)
achieved a year-on-year increase of 20.8%, which led to the fast growth of BPO revenue. The Group will actively
manage and control the development of its Distribution Business, and strike a proper balance between scale of
development and economic efficiency.
In 2011, applications, content and other (“ACO”) services grew steadily and its revenue achieved a year-on-year
increase of 15.3%, accounting for 11.4% of total revenues. During the period, the Group took advantage of the
opportunities created as a result of industry developments, such as the informatization of the community and mobile
Internet, and used its best endeavours to promote an innovative business development model. This included the
proactive introduction of strategic cooperation partners, increased investment in research and development and the
promotion of innovation of services and products. All of the above facilitated the Group’s market development and
value enhancement.
Expansion of Customer Groups
The Group has been focusing on three major markets. While reinforcing its leading position in the domestic
telecommunications operator market, the Group also actively explored the domestic non-operator market and the
overseas market. In 2011, the revenues from the domestic telecommunications operator market amounted to
RMB34,151 million, representing a year-on-year growth of 15.9%, accounting for 63.8% of total revenues. The
revenues from the domestic non-operator market amounted to RMB15,885 million, representing a year-on-year
growth of 15.7%, accounting for 29.7% of total revenues. The overseas business maintained rapid growth, and
the revenues from the overseas market amounted to RMB3,471 million, representing a year-on-year growth of
56.0%, and its revenue contribution to total revenues increased to 6.5%. The domestic non-operator market and the
overseas market have enormous market potentials, and in the future will provide a strong impetus to the sustainable
and rapid development of the Group.
Operation Management
The Group has laid a solid foundation in management, and has strived to improve its mechanisms and systems as
well as promoting its intensive high-efficiency management to enhance operational efficiency and management
capability. During the year, the Group’s operational efficiencies were enhanced by strengthened collaborative
management and the construction of strategic units in different professional areas such as design business. In
addition, the Group promoted centralized internal fund management and enhanced its efficiency in the utilization
of funds. The Group has focused upon the integration of internal resources, the optimization of its organizational
structure and the reduction of the number of legal entities. The Group believes the above measures will provide
cogent assurance for the Group’s simultaneous growth in scale and efficiency.