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/ China Communications Services Corporation Limited /
Management’sDiscussionandAnalysis of Financial Conditions andResults ofOperations
Cost of Revenues as a % of Total Revenues
Cost of Revenues
Our cost of revenues in 2011 was RMB44,998.32 million, representing an increase of 18.3% from 2010 and
accounting for 84.1% of our total revenues.
2011
2010
The following table sets out a breakdown of our cost of revenues in 2010 and 2011 and their respective rates of
change:
2011
2010
Percentage
RMB’000
RMB’000
Change
(Restated)
Direct personnel costs
8,473,657
7,459,665
13.6%
Depreciation and amortization
393,152
364,743
7.8%
Purchase of material and telecommunications products
16,195,976
13,506,740
19.9%
Subcontracting charges
14,525,988
11,883,574
22.2%
Operating lease charges and others
5,409,545
4,809,168
12.5%
Total cost of revenues
44,998,318
38,023,890
18.3%
Operating lease charges and others
10.1%
10.6%
Subcontracting charges
27.2%
26.2%
Purchase of material and
telecommunications products
30.3%
29.7%
Depreciation and amortization
0.7%
0.8%
Direct personnel costs
15.8%
16.4%