Chinese fixed line carriers are feeling the pressure from mobile competitors, as telcos move from saturated urban areas to untapped rural areas.
'The trend is very clear,' said Tang Li, a senior research analyst at Pacific Crest Securities. 'They have to tap the potential in rural markets for further development.'
While mobile carriers have reported healthy subscriber numbers, China Telecom and China Netcom, the two fixed-line operators, failed to boost their rural business in the first half of the year.
'Slow progress in rural markets and competition from mobile operators squeezed the duo,' said Tang.