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Investor Presentaiton

Increasing Resource Utilization ④ 中国电信 CHINA TELECOM RMB Mil 2019 Change Change as a % of Service Revenue Decreased 0.5% Operating Expenses 346,664 yoy 88,145 16.8% 43.1p.p. Incl.: Depreciation & Amortization 76,534 1.4% 0.1p.p. Growth rate less than service revenue due to enhanced precision investment while maintaining network edge 109,799 5.4% 2.4p.p. Network Operations & Support 122,103 5.2% +1.0p.p. Personnel 63,567 6.4% +0.8p.p. SG&A 57,361 3.5% 1.0p.p. Incl.: R&D Expense 2,105 457.0% 40.2p.p. Growth rate decreased remarkably due to strengthened cost control while continuing to enhance network capability and quality Increased incentives for high-tech talents and frontline employees Continued optimization of sales and marketing management to increase return on resources Expanded R&D input to step up core capability formation Interconnection 12,683 1.5% +0.2p.p. ☐ Pro forma figures excluding the impact resulting from the application of IFRS 16 The R&D expense in the table above excluded technology staff personnel expenses and depreciation & amortization of R&D-related assets; aggregate input related to R&D activities including expenses and capitalized expenditures was RMB11,147 Mil Note: 1. 2. Pro forma figures in this presentation are for illustration purpose only and investors should be cautious and not rely on these data 2019 Annual Results | 22
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