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Management’sDiscussionandAnalysis of Financial Conditions andResults ofOperations
/ Annual Report 2011 /
1
Telecommunications Infrastructure Services
In 2011, revenues from TIS services of the Group were RMB25,114.96 million, representing an increase of 16.1%
over RMB21,636.55 million from 2010, which was our primary source of revenues, and accounted for 46.9% of our
total revenues, representing a decrease of 0.7 percentage points from 47.6% in 2010. During the period, driven by
the increasing popularity of smart phones, mobile Internet development and the “Broadband China” strategy, the
domestic telecommunications operators increased their capital expenditure steadily. Under this circumstance, the
Group adopted more proactive and effective measures, TIS revenues from domestic telecommunications operators
grew rapidly and amounted to RMB18,889.00 million in 2011, representing an increase of 15.1% over RMB16,409.25
million from 2010. Meanwhile, the Group further expanded into the domestic non-operator market and overseas
market, and TIS revenues from such markets grew rapidly and amounted to RMB6,225.96 million, representing an
increase of 19.1% over RMB5,227.30 million in 2010.
Business Process Outsourcing Services
In 2011, revenues from BPO services of the Group were RMB22,315.34 million, representing an increase of 20.6%
over RMB18,508.42 million in 2010. BPO services accounted for 41.7% of our total revenues, representing an
increase of 0.9 percentage points from 40.8% in 2010. Among BPO services, revenues from network maintenance
were RMB5,276.07 million, representing an increase of 23.6% from 2010 and kept growing strongly. Rapid revenue
growth was mainly attributable to the increased spending in network optimization and maintenance on the enlarged
network and subscriber base of domestic telecommunications operators. In addition, by leveraging the advantages
of our integrated services, the Group provided ancillary services such as the distribution of telecommunications
machineries according to the requirements of the customers. Meanwhile, the rapid growth of mobile subscribers
in China and their demand for handsets also promoted the handsets distribution business of the Group. Revenues
from distribution of telecommunications services and products amounted to RMB14,442.79 million, representing an
increase of 20.8% from 2010.
Applications, Content and Other Services
In 2011, revenues from ACO services of the Group were RMB6,077.10 million, representing an increase of 15.3%
over RMB5,272.26 million from 2010. ACO services accounted for 11.4% of our total revenues, representing
a decrease of 0.2 percentage points from 11.6% in 2010. During this year, the Group further expanded the
informatization services to government and enterprise customers and the Internet application service to
telecommunications operators, which led to a rapid increase in revenues from IT applications and became a major
revenue generator for ACO services. The revenues from IT applications were RMB3,105.89 million, representing an
increase of 17.7% from 2010.