Pacific Epoch reports:

China Telecom (NYSE: CHA, 0728.HK) reported results for the full year of 2007 on Monday. Company revenue increased 1.7 percent year-on-year to reach RMB178.66 billion. Net profit for the period was RMB23.8 billion, down 13 percent from 2006.

In February, China Telecom’s fixed-line users fell by 1.02 million to reach a total of 218.09 million subscribers. The company gained 710,000 broadband users in February to book 36.98 million total broadband subscribers.

The news was broadly similar, on a slightly smaller scale, for China’s other telco. Pacific Epoch again:

China Netcom (NYSE: CN; 906.HK) announced full year 2007 results on Tuesday. The company recorded RMB84.01 billion in revenue, down from RMB84.19 billion in 2006. China Netcom generated profit of RMB12.095 billion, including RMB624 million from discontinued operations, for the twelve month period, compared to RMB12.97 billion in 2006.

The company lost 450,200 fixed-line phone subscribers last month to record a total of 109.605 million subscribers by the end of February. China Netcom added 510,800 broadband subscribers to reach 21.041 million broadband users in the one month period.

China Netcom’s profits were helped by a RMB1.2 billion subsidy from the government.

The rejiggering of China’s mobile and fixed teleco companies is still up in the air. China Unicom, the also-ran mainland mobile operator, is expected to be carved up between China Telecom and China Netcom. This would allow them to become two biggish minnows in the same tank as the ravaging great white shark China Mobile. They’ll be just in time to watch China Mobile make a cursory effort in 3G and then quickly move towards 4G. China Mobile recently joined Vodafone and Verizon Wireless in a consortium to test LTE as a 4G technology.

In the meantime, while their fixed-line subscribers switch to China Mobile, broadband and IPTV (TV via broadband) are their only consolations. Growth is expected to be quite perky as China continues to push internet penetration.

That may be good news, but technology is one of two factors that have a way of disrupting even the most sure of sure things. China Mobile may have no plans to enter the fixed-line broadband market, but it’s certainly possible that they could look into the wireless broadband market. 4G is still more of a label than a technology, but whatever it winds up to be it will have more bandwidth than anything that China Telecom and China Netcom are now providing.

The other factor is the government. They restructured the telecoms industry about eight years ago, are about to do it again, and maybe again at some future date. How it carves up the market between the three players will define their prospects, or lack thereof, for the foreseeable future.

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