Business2008 INTERIM2008 INTERIM

China Telecom Corporation Limited28 August 2008

www.chinatelecom-h.com

R E S U L T SR E S U L T S

2

Certain statements contained in this document may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 (as amended) and Section 21E of the U.S. Securities Exchange Act of 1934 (as amended). Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of China Telecom Corporation Limited (the “Company”) to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. In addition, we do not intend to update these forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company’s most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) and in the Company’s other filings with the SEC.

Forward-Looking Statements

3

Executive Vice President & CFOMadam Wu AndiMadam Wu Andi

President & COOMr. Shang BingMr. Shang Bing

Chairman & CEOMr. Wang XiaochuMr. Wang Xiaochu

Management Team

4

Agenda

OverviewOverview

Business ReviewBusiness Review

Financial PerformanceFinancial Performance

Overview

6

Highlights

Commenced CDMA business acquisition

and prepared in advance for

full services offering

Deepened strategic transformation

to optimize revenue mix

Pro-actively managed challenges to

maintain profitable development

Optimized CAPEX structure to enhance

competitive edges

7

Solid Results (Excl. Connection Fees)

2007.12 2008.6* Growth

Notes: * Included 320,000 Access Lines in Services and 90,000 Broadband Subs of Beijing Telecom, acquisition of which was completed in June 2008

** Free Cash Flow = EBITDA (Excl. connection fees) – CAPEX – Income Tax*** Normalized results excluded the increase in Network Operations & Support expenses of approximately RMB1,700 Mil (after-tax impact

of approximately RMB1,281 Mil) due to snowstorm and earthquake in 1H08, and excluded the income tax savings of RMB706 Mil resulting from the new Income Tax Law

12.1%-2.5%

39.9535.65Broadband Subs (Mil)214.89220.33Access Lines in Services (Mil)

1.9%45,968-1.9%44,26845,108EBITDA (RMB Mil)0.2pp51.4%-1.7pp49.5%51.2%EBITDA Margin

12,181

11.3%-4.0%-4.0%

1.5%

0.8%0.1430.149EPS (RMB)

11,60612,090Net Profit (RMB Mil)

21,66919,465Free Cash Flow** (RMB Mil)

89,40688,091Operating Revenue (RMB Mil)

Unless otherwise stated, all financial data used hereinafter are unaudited and include the financial impact of acquisition of Beijing Telecom, but exclude upfront connection fees

1H2007 1H2008 Growth

1H2008 Growth

Normalized***

8

0.1560.170EPS (RMB)

12,63413,756Net Profit* (RMB Mil)

50.1%52.1%EBITDA Margin

45,29646,774EBITDA (RMB Mil)

90,43489,757Operating Revenue (RMB Mil)

IFRS-based Results (Incl. Connection Fees)

1H2007 1H2008

Note: * Unless otherwise stated, net profit used in this presentation represents profit attributable to equity holders of the Company

9

Snowstorm & Earthquake Impact in 1H2008

SnowstormSnowstorm

EarthquakeEarthquake

Maintenance Cost: RMB200 Mil

Maintenance Cost: RMB130 Mil

EBITDA:RMB1,700 Mil

Net Profit:RMB1,281 Mil

CAPEX plan:RMB2,200 Mil

Asset write-off: RMB370 Mil

Asset write-off: RMB1,000 Mil

1H2008 Impact

CAPEX : RMB960 Mil

CAPEX : RMB1,240 Mil

10

1H2007 1H2008

RMB Mil

1.5% Contribution

Revenue Growth Drivers

+6.0pp-7.7pp +3.3pp -0.1pp

+1.5%

88,091 89,406

-892,880-6,732 5,256

Notes: * Fixed-line Voice Business Revenue includes Monthly Fees, Local Usage Fees, Upfront Installation Fees, DLD/ILD and Interconnection Revenue

** Internet & Data Business includes Internet Access, Managed Data and Leased Line businesses*** VAS & Integrated Information Services includes Fixed-line VAS, Internet VAS, Internet Information Services, Best Tone, Video

Applications and IT Services & Applications

Fixed-line Voice

Business*

OthersInternet & Data

Business**

VAS & Integrated

Information Services***

11

Strategic Transformation Gathering Pace

Voice Revenue

Non-Voice RevenueRMB Mil

1H2007 1H2008

57,24250,510

30,849 38,896

88,091 89,406

-11.8%

+1.5%

+26.1% 1H2007 1H2008

1H2007 1H2008

19,278

24,534+27.3%

21.9%27.4%

As a % of Operating Revenue

9,107

11,987+31.6%

10.3% 13.4%

RMB Mil

RMB Mil

As a % of Operating Revenue1H2008 Voice ARPU: RMB38.7 9.2%

Internet & Data BusinessSteady Aggregate Revenue

VAS & Integrated Information Services

12

Customer-focused Operation to Enhance Value

Government & Enterprise Customer

33.3%

37.1%

46.8%47.3%

+2.9%

+13.5%

1H20081H2007

1H20081H2007

Government & Enterprise

Household

As a % of Total Customer Segment Revenue

As a % of Total Customer Segment Revenue

Revenue Growth

Revenue Growth

Differentiated services for further refined customer segments

Enriching “BizNavigator” brand content and customer perception with convergent services & industry applications

Enhancing customer value & revenue

Enriching “One Home” brand content & value with more content applications, multi-means of access for multi-terminal devices

Promoting targeted marketing in key markets

Further enhancing tariff perception

Household Customer

13

Aligning investment strategies with business development; strictly controlling investment in traditional business to enhance return

Tilting investments toward transformation business to drive revenue

Pro-actively preparing for full services offering

Incremental mobile business CAPEX to be finalized after attaining relevant approval for CDMA business acquisition

CAPEX

RMB Mil

2007 2008E

CAPEX

Extra RMB2,200 Mil CAPEX due to

earthquake & snowstorm

1H CAPEX

Note: Above CAPEX included Beijing Telecom’s CAPEX of RMB785 Mil for 1H2007 and RMB853 Mil for 1H2008

Strictly controlling CAPEX to enhance return; optimizing structure to

promote development

46,345

44,893

20,745 18,783-9.5%

47,0932,200

14

Mobile Preparations• Network transition & optimization

• IT system establishment &enhancement

• Equipment procurement & network construction

• Fixed & mobile services integration

CDMA Business Acquisition• Take-over of CDMA business

• Relatively complete customer service system

• Relatively complete CDMA network with stand-alone operation and continuous service capability

• Solidify customer base (Government & Enterprise, Household and Individual)• Strengthen development of transformation business (broadband, VAS &

integrated information services)• Promote product bundling and integrated service

Near Term Focus

To launch mobile business after attaining relevant approval for CDMA business acquisition

• Distribution channels & international roaming

arrangement

Consolidate Fixed-line Business

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Integrated Information Services ProviderIntegrated Information Services ProviderEnrich customer experienceRealize significant synergiesEnhance core competitivenessCreate shareholder value

Full Services Offering to Enhance Value

MobileOperations

MobileOperations

Strategic Transformation

Strategic Transformation

Full Services Offering

Full Services Offering

Fixed + Mobile+ +

Media + Data

Fixed + Mobile+ +

Media + Data• Promote customer brand

operation• Strengthen development

of transformation business

• Consolidate voice business

• Focus on mid-to-high end customers

• Offer differentiated services

• Realize profitable scale development

Fixed-lineOperationsFixed-line

Operations

BusinessR E V I E W

17

Revenue Breakdown

1H2007（RMB Mil）

Share of Operating Revenue

Growth1H2008（RMB Mil）

21.8%30.9%19,50914,907Internet Access

5.6%15.0%5,0254,371Managed Data & Leased Line

27.4%27.3%24,53419,278Internet Access & Data

35.0%-13.9%31,29636,355Sub-total

100.0%

2.7%

13.4%

7.3%14.2%

21.3%

12.3%

1.4%

56.5%

1.5%89,40688,091Total

-3.6%2,3752,464Others

31.6%11,9879,107VAS & Integrated Information Services

-5.3%6,5316,894Interconnections

-9.4%12,68313,993Long Distance

-11.9%19,04021,614Local Usage Fees

-17.7%10,96513,326Monthly Fees

-8.8%1,2911,415Upfront Installation Fees

-11.8%50,51057,242Fixed-line Voice

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Local Voice Business

Access Lines in Services

Mil214.9220.3

2007.12 2008.6

Household

Government & Enterprise

Individual

26.4

120.7

52.0

15.8Public Telephone

PAS PAS

Local Voice BusinessVoice Usage Revenue

202,520189,712

-6.3%PulsesMil

RMBMil -13.9%

36,35531,296

35.0%41.3%

1H2007 1H2008

24.8

121.8

58.0

15.7

1H2007 1H2008

Public Telephone

Major Initiatives

As a % of Operating Revenue

Strengthen bundling and integration with non-voice businesses with targeted marketing to Government & Enterprise and Household customers

Emphasize profitable development amid intensifying competition with loss of some low-end PAS subs due to effective control of sales expenses

19

Long Distance Business

Market Share by Usage

Domestic Long Distance

International Long Distance

Usage

48,19349,864

+3.5%MinutesMil

30.3%38.6%

RMBMil

791 784

-0.9%MinutesMil

37.4%46.6%

RMBMil

As a % of Operating Revenue

12,440 11,331

-8.9%

12.7%14.1%

Revenue

-12.9%

1,5531,352

1.5%1.8%

1H2007 1H2008 1H2007 1H2008

1H2007 1H2008 1H2007 1H2008

Usage Revenue

Major Initiatives

Enhancing tariff packages and sales model to stimulate customers’consumption and usage amid intensifying market competition

20

Broadband Access Revenue

Broadband Business

7985

+31.3%

1H2007 1H2008

14,687

19,279

Broadband ARPU (RMB)

RMB Mil

Subscribers

Net Adds in the Period

32.1935.65

3.873.46

4.30

2007.6 2007.12 2008.6

39.95+24.1%

Major Initiatives

Broadband Roaming:

Launching broadband account operation with nationwide WIFI roaming services (>15,000 WIFI hotspots) via “e8-2” package

Promoting to “OneHome” customers one-stop services and applications (communications, treasury management, broadcasting, customer services, information, entertainment…)

Driving Access with Applications:

Mil

21

1H20081H2007

9,10711,987

RMB Mil

Revenue

Revenue Growth & Mix in 1H08

13.4%

As a % of Operating Revenue

10.3%

9.7%

56.7%

93.5%

33.5%

74.6%

131.0%

50.9%

9.2%17.6%

12.9%

5.0%4.4%

Note: * Video Applications include video conferencing, video monitoring and IPTV

VAS & Integrated Information Services

Major Initiatives

Promoting scale & diversified development

Leveraging professional and centralized operation and emphasizing co-operation along value chain to accelerate the development of new services and strengthen core competitiveness of integrated information services

+31.6%

Fixed-line VAS

Best Tone

IT Services& Application

Internet VAS

Internet Information

Video Applications*

22

Fast Growing Businesses

1H20081H2007

1H20081H2007

2,070

1,026

2,106

1,3440.9pp contribution to

overall revenue growth

Best Tone

IT Services & Applications* + Video Applications

RevenueRMB Mil

RevenueRMB Mil

1.2pp contribution to overall revenue growth

Note: * IT Services & Applications Revenue excluded third parties equipment sales

Best Tone

IT Services & Applications* + Video Applications

Enriching information content and enhancing brand awareness

Advancing co-operation to enhance commerce & travel servicing capability

Targeting mid-to-high end Government & Enterprise customers

Leveraging existing customer base and network resources; focusing on profitable business opportunities

Enhancing system integration, outsourcing and consultation services capabilities

+56.7%

+101.8%

23

Leverage mobile resources acquired via CDMA business acquisition and integrate with fixed-line resourcesOptimize network coverage and improve service qualityLower operating expenses via synergiesEstablish full services offering operation system

Leverage mobile resources acquired via CDMA business acquisition and integrate with fixed-line resourcesOptimize network coverage and improve service qualityLower operating expenses via synergiesEstablish full services offering operation system

Focus on mid-to-high end

urban customers

Add-in mobile service

Develop mobile Internet

applications

Establish differentiated

services

Leveraging premier customer brands to promote mobile service penetration and

to enrich customer experience

Leveraging premier customer brands to promote mobile service penetration and

to enrich customer experience

Innovative mobile communications in the Internet era to provide

seamless information experience

Innovative mobile communications in the Internet era to provide

seamless information experience

Customer-focused Differentiated Operation

Individual customer brand

FinancialPerformance

25

1H2007（RMB Mil）

1H2008（RMB Mil） Growth

3.8%71,68269,072Sub-total

-1.9%

-4.0%

-6.8%

2.2%

-0.5%

1.4%

13.2%

1.7%

1.5%

44,268

11,606

17,724

3,508

11,103

13,857

16,670

26,544

89,406

45,108EBITDA

12,090Net Profit

19,019Operating Profit

3,434Interconnection & Others

11,157SG&A

13,667Personnel

14,725Network Operations & Support

26,089Depreciation & Amortization

Operating Expenses

88,091Operating Revenue

Key Financial Information

Note: Figures on this slide included the impact of snowstorm, earthquake and new Income Tax Law

26

Cost Structure

Operating Expenses as a % of Operating Revenue

Operating Expenses

Depreciation & Amortization

Network Operations & Support

SG&A

Personnel

80.2%

Interconnection & Others

29.7%

18.7%

15.5%

12.4%

3.9%

78.4%

29.6%

16.7%

15.5%

12.7%

3.9%

Operating Expenses was

78.3% of Operating Revenue

excluding impact of snowstorm &

earthquake

1H20081H2007

27

Optimized Resource Allocation to Sustain Development

Note: * Excluded the impact of RMB1,700 Mil due to snowstorm and earthquake

Cost Initiatives 1H2008 Results

Maintained EBITDA margin relatively stable

Maintained EBITDA margin relatively stable

Depreciation &AmortizationStrengthened asset precision management to enhance resourcesutilization

Depreciation &AmortizationStrengthened asset precision management to enhance resourcesutilization

Network Operations & SupportImproved network maintenance quality to support continuous development

Network Operations & SupportImproved network maintenance quality to support continuous development

PersonnelEnhanced employees’ incentivesPersonnelEnhanced employees’ incentives

Depreciation &AmortizationRMB26,544 Mil (maintained stable as a % of operating revenue)

Depreciation &AmortizationRMB26,544 Mil (maintained stable as a % of operating revenue)

Network Operations & Support*RMB14,970 Mil (+1.7% yoy; maintained stable as a % of operating revenue)

Network Operations & Support*RMB14,970 Mil (+1.7% yoy; maintained stable as a % of operating revenue)

PersonnelRMB13,857 Mil (+1.4% yoy; maintained stable as a % of operating revenue)

PersonnelRMB13,857 Mil (+1.4% yoy; maintained stable as a % of operating revenue)

SG&ARMB11,103 Mil (-0.5% yoy; -0.3 pp as a % of operating revenue)

SG&ARMB11,103 Mil (-0.5% yoy; -0.3 pp as a % of operating revenue)

SG&AControlled PAS handset subsidies & tilted investments toward profitable businesses & targeted customer segments

SG&AControlled PAS handset subsidies & tilted investments toward profitable businesses & targeted customer segments

28

CAPEX Structure

Enhanced CAPEX Structure

RMB Mil

20,745 18,783

9.6%

20.2%

39.2%

6.5%

19.1%

55.1%

22.2%

13.8%3.9%

0.5%

4.9%

5.0%

1H2007 1H2008

Internet & Data

IT & Support

Fixed Line Switches

Local Transmission & Access

PAS

Others*

Note: * Others include communication infrastructure and other capital expenditure

Enhanced CAPEX structure to support strategic transformation

Internet & Data 27.3% yoy

IT & Support 7.6% yoy

Fixed Line Switches 38.7% yoy

Local Transmission & Access 43.7% yoy

PAS 88.4% yoy

Others 14.4% yoy

Tilting investment toward transformation business & strictly controlling CAPEX on fixed-voice business & infrastructure facilities

Enhancing network support capability for transformation business

29

Solid Capital Structure & Financial Strength

RMB Mil

33.4%

2007.6 2008.6

19,46529.5%

21,669

Total Debt / Total Capitalization Free Cash Flow

Solid financial fundamental and strong free cash flow proactivelSolid financial fundamental and strong free cash flow proactively equip the y equip the Company to capture future growth opportunitiesCompany to capture future growth opportunities

-3.9pp +11.3%

1H2007 1H2008

30

Precision resource allocation by tilting resource toward high value customers and key businesses to support transformation

Precision resource allocation by tilting resource toward high value customers and key businesses to support transformation Deepening

value

management

to enhance

shareholders’

value

Deepening

value

management

to enhance

shareholders’

value

Further optimizing CAPEX & cost structure to effectively control financial risksFurther optimizing CAPEX & cost structure to effectively control financial risks

Strengthening centralized financial management leveraging corporate structure reform to improve treasury management and asset utilization

Strengthening centralized financial management leveraging corporate structure reform to improve treasury management and asset utilization

Rational resource allocation to fixed and mobile services leveraging existing resource & capability to drive synergy & promote profitable scale development of mobile business

Rational resource allocation to fixed and mobile services leveraging existing resource & capability to drive synergy & promote profitable scale development of mobile business

Innovative Measures to Support Full Services Offering

31

Thank

www.chinatelecom-h.com

Y O U

32

Unaudited1H2007

(Restated)*

Unaudited1H2008

12,63413,756Equity Holders of the Company

16,49318,681Profit Before Taxation

(71,682)(69,072)Operating Expenses

43

12,677(3,816)

30

(2,289)

1,028

90,434

27Minority Interests

13,783Profit for the Year(4,898)Income Tax

9Investment Loss, Share of Profit from Associates

(2,013)Net Finance Costs

1,666Upfront Connection Fees

89,757Operating Revenue

Extracted from unaudited income statementfor the 6 months ended 30 June 2008 (incl. upfront connection fees)Appendix 1

Note: * Restated to include the financial impact of acquisition of Beijing Telecom

RMB Mil

33

Extracted from unaudited balance sheet as at 30 June 2008(incl. upfront connection fees)

Unaudited31.12.2007 (Restated)*

1,4861,451Minority Interests

185,810187,359Total Liabilities

412,093413,331Total Assets

224,797

226,283

55,790

130,020

358,885

53,208

224,521Equity Attributable to Equity Holders of the Company

225,972Total Equity

47,114Non-current Liabilities

140,245Current Liabilities

369,221Non-current Assets

44,110Current Assets

Unaudited30.6.2008

Appendix 2

RMB Mil

Note: * Restated to include the financial impact of acquisition of Beijing Telecom

34

6,5316,894Interconnections

5,0254,371Managed Data & Leased Line11,9879,107VAS & Integrated Information Services

2,3752,464Others90,43489,757Total

19,04021,614Local Usage fees11,33112,440DLD

31,29636,355Local Voice Business

19,509

1,352

10,9651,291

1,028

14,907Internet Access

1,553ILD

13,326Monthly Fees1,415Upfront Installation Fees

1,666Upfront Connection Fees

Detailed operating revenue breakdownfor the 6 months ended 30 June 2008 (incl. upfront connection fees)

Unaudited1H2007

(Restated)*

Unaudited1H2008

Appendix 3

RMB Mil

Note: * Restated to include the financial impact of acquisition of Beijing Telecom