China Telecom Rises 2%; Deutsche Bank Keeps Buy Rating
China Telecom (ADR:CHA, Hong Kong Stock Code 0728) bulks the HSI’s 0.4% decline, rises 1.98% to HK$4.12.
Deutsche Bank lowered its target price for China Telecom to HK$5.41 from HK$5.77, and maintained its “buy” rating. The house said CT, with services offered at 800MHz, currently has less base station density than the combined 2G/3G networks of China Mobile (CM)(00941) and China Unicom (CU)(00762). CM runs TD-SCDMA at 1.9Ghz, while CU offers WCDMA at 2.1Ghz. CM and CU each has hundreds of thousands of base stations supporting 2G GSM services, thus relieving them of having to build many new 4G sites. Deutsche Bank also acknowledged that CT will likely have to spend more heavily in rural areas, which theh ouse expects to begin in Years 3 and 4 of its 4G capex build.