China Telecom, the country’s biggest fixed-line operator, on Thursday reported a 27.5 per cent drop in first-half net profit from a year ago amid heated competition, as the company increased spending to promote its 3G services.

For the first six months of the year, net income fell to Rmb8.4bn ($1.2bn), compared with Rmb11.6bn a year ago. Analysts polled by Bloomberg had expected net profit to drop to Rmb7.8bn. Operating revenues rose 14.8 per cent to Rmb102.6bn.