CHINA TELECOMMUNICATIONS CORPORATION’S

2015 CSR REPORT Create and Share a Smart Future CPC General Secretary Xi Jinping in China Telecom

On June 17, 2015, General Secretary of CPC Central Committee, State President and Chairman of Central Military Commission Xi Jinping visited China Telecom Cloud Computing Information Park in Guizhou to look on staff there (Source: Guizhou Daily, June 20, 2015)

1 CONTENTS

Visits by State Leader 1 Top Management Dialogue 4 Top Management 6

Responsibility Highlight: “Business Startups and Innovations” Boost Transformation and Upgrading 7

Grassroots Startup...... 8 Technology R&D...... 12 Product Innovation...... 14 Innovation Incubation...... 15 Cooperation on Startup and Innovation...... 15

To Build a Nation with Powerful Network 16

Develop Basic Communications Network...... 17 Build New Information Facilities...... 21 Maintain Network Information Security...... 25 Safeguard Emergency Communications...... 27

Serve Digital Society 28 Lead a Digital Life...... 29 Protect Customers’ Rights and Interests...... 36 Improve Service Capabilities...... 37

Care about Employees’ Growth 42

Protect Employees’ Rights and Interests...... 43 Promote Employees’ Development...... 43 Employees’ Involvement in Management...... 47 Care about Employees’ Life...... 49

2 China Telecom Fulfill Green Development 52 Green Management...... 53 Green Procurement...... 55 Green Operation...... 56 Green Office...... 59 Green Activities...... 59

Avidly Improve Social Welfare 60 Poverty Alleviation and Assistance for Tibet and Xinjiang...... 61 Help for Those in Distress and Feeble Conditions...... 63 Support Science, Education, Culture and Health Care...... 64 Extension of Civilization...... 64 Encourage Volunteer Services...... 65

China Telecom in the Overseas Market 66 Highlight: Engagement in the “Belt and Road” Initiative...... 66 Serve Overseas Customers...... 67 Promote Sustainable Development ...... 68

Promote Responsibility Management 70 Responsibility Strategy...... 71 Responsibility Governance...... 72 Responsibility Performance...... 73 Responsibility Capacity ...... 74 Responsibility Communication...... 75 Law Observation and Compliance...... 77

Afterword 80 About Us...... 80 Table of Key Indicators...... 82 Main Honors...... 84 Outlook...... 85 Rating Report...... 86 Report Specification...... 87 Reeder Feedback Form...... 88

2015 CSR Report 3 TOP MANAGEMENT DIALOGUE

YANG Jie

Chairman of China Telecommunications Corporation

Q: The national “Thirteenth Five-Year” (2016-2020) plan describes a network, guided by the “CTNet2025” network reconfiguration plan, open-source development blueprint in the next five year. So, how will China Telecom carry out technology application are deepened and new technologies like SDN, NFV and the requirements made in the plan and promote a new round of transformation cloud computing are introduced to gradually realize network intelligence. On and upgrading? the level of businesses, the basic businesses like 4G and fiber-optic broadband and the emerging businesses of IoT, cloud computing, big data, HD network TV, mobile payment and “Internet+” industrial IT-enabled applications are prioritized YANG Jie: The national “Thirteenth Five-Year” plan identifies five to center on customers’ needs and work with business partners for a shared, development philosophies and a blueprint to give a clear direction for jointly created and win-win business ecosystem. On the level of operation, the our economic and social development, among which the national cyber data resources are explored to deepen the reform and continuously improve development strategy, the big data strategy, the “Internet+” action plan, the capabilities in network operation, data operation, channel sales, customer Made in China 2025 and the public business startup and innovation strategy all service and talent team so as to make corporate operation smarter and more present specific requirements for industries related to information service. On efficient. the basis of noticeable results scored in its transformed development during “Twelfth Five-Year” plan period, China Telecom carries out the requirements according to the national “Thirteen Five-Year” plan and develops a new round Third, devote to new leapfrog improvement in comprehensive strength, of transformation and upgrading strategies for the “Thirteenth Five-Year” plan in new breakthrough in core capabilities and new responsibilities in central combination with the development trend of information service industry. enterprises. China Telecom will continue to increase user scale in various key businesses, vigorously raise the share of various emerging businesses and explore the practice of user-defined businesses so as to continuously First, set a new strategic objective of being a leading provider of create new values for users and enhance corporate values. Efforts are made integrated and smart information service. With rapid advancement of to innovate the new-type information infrastructure of cloud computing, big science and technology such as Artificial Intelligence, the intelligence-based data and IoT, and establish the new architecture of cloud-based network and development is accelerating in the society, production and people’s daily life. the integrated intelligent operational system. The “Customer First, Service More and more users expect the information service to be accessible on- Foremost” service philosophy is carried out to promote flat organization, demand, respond automatically and provide realistic experience. According efficient procedure and fast response to users’ needs and to win better public to the users’ needs change, China Telecom will boost consumption upgrading praise with high-quality service. Talent teams are built in combination with of information service and transformation and upgrading of various sectors transformation and upgrading to realize common growth of employees and the with the help of smart connection, smart platforms and smart applications as enterprise. well as the business ecosystem of these three in integration. The intelligent information service has its base on digital and network-oriented processes, new technical applications of cloud computing, big data, mobile Internet, IoT and China Telecom will adhere to innovation-driven, coordinated and green AI as its driving force, the mining and utilization of internal and external data as development, opening-up and cooperation and sharing of development its normal and the intelligent devices as the medium to conduct extensive and achievements. Through self-transformation and upgrading, China Telecom cross-over cooperation so as to provide users with proper, convenient and cost- boosts national cyber development, guides digital ecosystem, and serves better effective new-type of IT-enabled products and services. social livelihood of people and transformation and upgrading of various sectors in an effort to make new and bigger contributions to building a moderately prosperous society in all respects. Second, vigorously push forward intelligent network, ecosystem of businesses and smart operation with the main line of intelligence. On the level of

4 China Telecom YANG Xiaowei

President of China Telecommunications Corporation

Q: What new achievements has China Telecom made during the “Twelfth agencies like Ministry of Industry and Information Technology about rectifying Five-Year” plan period and in 2015 in fulfilling its social responsibilities? What unhealthy work style of industries are carried out earnestly. The hotspot issue new targets will be included during the “Thirteenth Five-Year” plan period and in of service is dealt with in a timely manner and service quality is continuously 2016 in fulfilling social responsibilities? improved in combination with customers' complaint and feedback. We were engaged in the disaster relief work in the first place at the event of earthquakes in Nepal, in Pishan County of Xijiang and Cangyuan County of Yunnan as well YANG Xiaowei: During the “Twelfth Five-Year” plan period, China Telecom as many other disasters like flood and typhoon. We recovered communication earnestly implemented requirements made by State-owned Assets Supervision in disaster-hit areas at the fastest speed and accomplished the communication and Administration Commission of the State Council in its Guiding Opinions guarantee tasks for major meeting and sports events. We strengthened for State Central Enterprises in Implementing Social Responsibilities and production safety and continuously improved the work and living conditions of Implementation Guideline of Harmonious Development Strategy by Central grassroots employees. We strengthened energy conservation and emission National Enterprises during the “Twelfth Five-Year” Plan Period by integrating reduction by promoting old equipment phase-out and energy transformation to social responsibility into our transformation and development strategy and into effectively control the energy consumption rise. By working with other operators, our daily production, operation and management activities. We actively fulfil our we made efforts to promote the co-construction and sharing of communications social responsibilities and have publicized our corporate social responsibility base stations and improve the use of communications infrastructure. We reports for five consecutive years. continuously launched public activities of various forms to support Tibet and Xinjiang and help the poor, the needy, the disabled and the vulnerable as well In 2015, we continuously advocated and implemented our corporate as support the development of social undertaking in science, education, culture social responsibility and integrated it into our corporate cultural development. and health. We assisted the government of Gansu province in building China’s We put the innovation-driven development strategy and the requirements of first big data management platform for precise poverty alleviation to ensure that public business startup and innovation into effect by establishing the system of those household-based measures can be in place for poverty elimination. We "business startup and innovation", motivating the internal vitality of enterprises, also took active part in the development of information infrastructure for the “Belt promoting the social activities in innovation and entrepreneurship and boosting and Road” countries (regions) to serve the local enterprises and the economic the economic transformation and upgrading. We released China Telecom’s and social development. "Internet+" Action White Paper and worked with various customers and business partners in an in-depth fashion to vigorously push forward "Internet+" initiative. During the “Thirteenth Five-Year” plan period, China Telecom adheres We earnestly implemented the policy of "faster and more affordable connections" to its strategic goal of being a leading operator of comprehensive intelligent and made a batch of cities fully covered by fiber optic among which Sichuan information service to promote a new round of transformation and upgrading. province was the first of its kind to be built with full coverage of fiber optic. We will further enhance our management on social responsibility by attaching The wired broadband average access rate of the whole Corporation rose from more importance to innovative method of social responsibility fulfillment, fair 11Mbps to 25.4Mbps. The unit bandwidth price fell by 59% and the mobile operation, environment friendliness, harmony and sharing as well as openness phone data tariff decreased by 33%. By virtue of the "village connection" project, and transparency in an effort to play a leading role as a central national 5430 administrative villages have been covered by broadband and 1049 enterprise in fulfilling social responsibilities and make new contributions natural villages have been available to phone services. The service method is to higher quality, efficiency and more sustainable social and economic also innovated and the service capabilities in 4G and fiber-optic broadband are development. improved based on the customers' demand. The requirements of governmental

2015 CSR Report 5 TOP MANAGEMENT

YANG Jie YANG Xiaowei Chairman of the Board, Board Member, President and Vice Secretary of the Party Secretary of the Party Leadership Leadership Group Group

ZHANG Jiping SUN Kangmin Vice President, Member of the Vice President, Member of the Party Leadership Group Party Leadership Group

ZHEN Caiji SHAO Chunbao Vice President, Member of the Party Member of the Party Leadership Group, Leadership Group Leader of the Discipline Inspection Group

KE Ruiwen GAO Tongqing Vice President, Member of the Party Vice President, Member of the Party Leadership Group Leadership Group

CHEN Zhongyue Vice President, Member of the Party Leadership Group

6 China Telecom RESPONSIBILITY HIGHLIGHT: "BUSINESS STARTUPS Highlight Responsibility AND INNOVATIONS" BOOST TRANSFORMATION AND UPGRADING

“Business Startup and Innovations” Boost Transformation and Upgrading

Grassroots Technology Product Innovation Cooperation Startup R&D Innovation Incubation on Startup and Innovation

Under the new normal of economic development, to promote mass startup and crowd innovation, and motivate the whole society’s potential and vitality in innovation is of significant meaning to promoting economic restructuring, building new engine of development, increasing new driver of development and walk on the path of innovation-based development. China Telecom centers around its overall situation of economic transformation and upgrading and its strategy of corporate transformation and upgrading to highlight the establishment of a “four-in-one” and “business startup and innovation” system including grassroots startup platform, technology R&D institution, product innovation bases and innovation incubation platform as vigorous efforts to stimulate the internal vitality of enterprises in innovation and business startup and promote social activities in innovation and business startup.

China Telecom’s System of “Business Startup and Innovation”

Type constitution Tasks

· Smaller contract operation: clear division of responsibilities, well- · The grassroots business units change into relatively independent Grassroots selected responsible person and well-established responsibility management bodies and the system in support of grassroots is Startup system established in coordination with various levels of organizations to Platform · To establish a "vertical triangle" supporting system boost startup development of grassroots employees. Technology R&D · Beijing CT Institute, Shanghai CT Institute, Guangzhou CT Institute · Forward-looking a fundamental technical research Institutions

· Industrial Internet application: industrial application bases in · Professional R&D, operation and service about “Internet+ niche government services, education, Healthcare, finance, agriculture, sectors” application products Product transport, logistics, manufacturing and tourism, etc. Innovation · Public Internet-based application: Providers of products like Yixin, Bases · Professional R&D, operation and service of public Internet application E-surfing Video, E-surfing Space, E-surfing Space, E-surfing products Reading, i-Cartoon, i-Music and i-Game

Innovation · Emerging areas oriented towards Internet-based application to Incubation · Innovation incubators in Shanghai, Beijing and South·China provide program incubation service for business startup talents Platform inside the enterprises and in the society

2015 CSR Report 7 Grassroots Startup

As a super large state-owned communications operator, China Telecom, considering the problems of multiple management levels, low vitality of employees, inefficient allocation of resources and slow response to market, will deepen the integration of corporate reform with “public business startup and innovation” in an all- round way by closely centering on the main line of reform to “motivate people”, will continue to push forward the smaller contracting reform with “responsibility field, responsible person and responsibility system” as the core, and establish the “inverted triangle” support system so as to drive the reform of corporate management and streamlined organization, which will explore a new path of grassroots startup development and vitality increase in the state-owned enterprises.

Development Course of China Telecom in Promoting Grassroots Business Startup

· In 2009,China Telecom branches in Quanzhou and Longyan cities, Work at the Front End of Market, in which the work of making smaller Fujian province carried out trials on the bidding-based contract contract-based operation at the front-end business unit like branch system by starting the practice in smaller accounting units and offices was deployed and promoted. contract operation. · In December, 2014,the Group Company deployed the work of · In July, 2011,the Group Company's then president WANG Xiaochu building an "inverted triangle" support system at the 2015 Annual said at the Semi-annual Forum with President that "we should further Work Meeting, in which the rights would be delegated to the lower free our mind, innovate our system and mechanism by having level and the reverse assessment would be adopted to give more smaller operation accounting units, increasing staff input and output voice to the forefront workers so that they, as being the most close and vigorously promoting the contract-based responsibility system to customers, can decide the internal resource allocation in rural income". · In May, 2015,the Group Company held the awarding and promotion · In December, 2011,the Group Company's then president YANG Jie meeting to commend 550 Group-wide "best small CEOs". The then deployed and promoted the smaller contracting work at the 2012 president YANG Jie called for a new height of work on smaller Work Meeting by requiring the branch offices in the rural area to contract-based system, faster establishment of “inverted triangle” fulfill the operation contract-based responsibility system. service support system and transformation of administrative agencies. · In February, 2014,the Group Company circulated Notice of Promoting Comprehensive and In-depth Reform to push forward · In June, 2015,the Group Company printed and circulated Notice of the reform work with smaller contract-based system as an important Implementation Plan on Comprehensively Building the "Invertible signal. Triangle" Service Support System to push forward the systematic reform of three-level operational management model, i.e. at the · In March, 2014,the Group Company selected and commended Group Company's headquarters, provincial and prefecture level. 100 "best operators” from branch offices , 100 "best operators" from business halls for smaller at branch offices and 30 "best managers" · In July, 2015,the Group Company called for more efforts on of Internet investment. smaller contract-based system, accelerated nurturing a batch of outstanding "small CEOs" and sound solution of response and · In April, 2014,the Group Company printed and circulated Notice of supervision mechanism to "small CEO" related issues at the semi- Implementation Plan on Advancing the Contract-based Operation annual forum with the president.

In the era of mobile Internet, the organizational reform with "small and micro-organizations" and "forefront self-operational bodies" as the core represents the direction and trend of reform for large enterprises. With China Telecom's smaller contract-based system, the grassroots units turn into quite independent self-operational bodies. As the market-based incentive mechanism market-based with the harmonized responsibility, rights and benefits as well as the coordinated growth of staff income and corporate values was established, the employees' passion for business startup was fully motivated as a helpful method to be explored to solve the problems with "large enterprises", stimulate vitality of a large stated-owned central enterprises, liberalize the internal productivity and promote the "public business startup and innovation".

—YANG Jie Chairman of China Telecommunications Corporation On January 20, 2015, the Group Company's then president YANG Jie (second from right) visited the branch office in Gaocheng District, Shijiazhuang City of Hebei Province and listen to the report from "small CEO" ZHANG Mingyou (second from left) about startup development there.

8 China Telecom Framework of China Telecom to Promote Grassroots Startup Development Highlight Responsibility Divide Areas of Responsibility Properly Select Proper Persons in Charge Set up A Proper Responsibility System

· Township Branch Offices · Public Bidding-based Selection · Responsibilities:Contract Fulfillment, · Business Halls · Two-way Selection between Contractors Contracting Indicators, Staff Management · Urban Network(Regional) and Employees and Negative Checklist · Network Building & Maintenance · Knockout Mechanism · Rights:Rights to Staff Use, Resources Use, · VIP Customers Marketing Service Examination and Remuneration allocation · Benefits:Basic Contract Fee, Excess Commission, Prospective Profit Sharing and other rewards

Establish An “Inverted Triangle” System

· Set up a comprehensive service support center to provide one-stop centralized support service for front-line business units and remove the concerns from the startup teams. · The front-line staff can send orders to backend support departments and their superiors anytime and anywhere, which can cover the prefecture and provincial-level branches and even the headquarters · The small CEO carries out evaluation and examination about services provided by the backend support departments and the superior departments.

【Case of Grassroots Startup Development at Provincial Companies】

Gansu Branch Unremitting efforts are made to promote and deepen the operation based on smaller contracting. In 2011, the smaller contracting system was launched in the rural branch offices. The scale expanded to the urban branch offices and outlets in 2013. The grid-based division was introduced in the contracting at the branch office level in 2014 by applying the smaller contracting system in the fields of broadband installation and maintenance as well as customer service. In 2015, the original branch offices turned into more and smaller contracting bodies of branch office and smaller contracting system was also adopted in the VIP customer marketing service team. In order to realize truly market-based operation of contracting body and in combination with the policy of staff's voluntary dissolution of contract with the Branch and business startup afterwards, 1280 employees have voluntarily dissolved the contract with the Branch and began to start up their own self-employed business. By the end of 2015, 867 branch offices in the urban and rural areas have adopted smaller contracting system and set up 210 outlets.216 contracting teams have been engaged in the VIP customer sector. The number of frontline business units have increased to over 4000 from 84 in 2010, involving 4157 employees and driving the recruitment of nearly 10,000 persons, which has registered over 10% annual growth over the past five years in operating revenue.

Anhui Branch The contracting model of joint investment, construction and operation by employees and enterprises is explored. In 2014, the smaller contracting system was launched at the rural and urban branch offices. In 2015, the contract-based responsibility system was pushed forward at the grids and business outlets below the branch offices. In order to bring into full play the internal initiative of frontline employees in startup development and through the revenue distribution contracts including agreement on basic fee package and incremental revenue commission, they were encouraged to start their business development in the way of investing in network building, opening stores, buying equipment and recruiting staff, so that the contracting bodies and the enterprise form a closer community of interests. By the end of 2015, 1269 contracting bodies at the branch office level, 9724 grids or business outlets areas have been set up to drive up over 1000 social operating bodies. The proportion of grassroots and frontline employees involved in investment and startup has exceeded 10%; In the rural business department of Bozhou Branch, after 200 contracting regional managers agreed on the contract, they voluntarily invested over RMB 20 million on contract-based operation, which reflects the good vitality of startup development.

Chengdu Branch The smaller grassroots business units and the management to the frontline for startup were vigorously promoted. In 2013, 20 district and township- level companies turned into 33 ones. In 2014, 106 branch offices turned into 306 ones and 33 regional network operating branch offices at the backend adopted smaller contracting system. In the end of 2015, 807 smaller accounting units were launched at the VIP customers marketing service teams of branch offices, outlets and areas as well as network operating branch offices. After many business units took shape and considering the problems of insufficient grassroots staff and weak influence of “small CEO”, the supporting policies were developed in several ways, like compensation, career development and training, etc. to encourage the staff in the management support department of municipal companies to go to district or county-level branches and branch offices to take the role of “small CEO” or to engage in contracting startup, with the total number of 641 persons. Now, there are 928 “small CEOs” and 1300 staff involved in contracting startup, which leads to much enhanced capability of startup development for the grassroots business units.

Zhengshou Branch The smaller contract-based system expands from the grassroots and frontline contracting bodies towards the superior professional operations. After the trial on smaller contracting bodies was established in 2013, five business departments, 30 proprietary business halls and the teams of VIP and commercial customers were set up at the city in 2014. In 2015, the branch office contracting bodies were established in the rural, community, trading areas and universities. Six professional operation centers were built for contracting bodies in township, communities, trading areas, proprietary business halls, strategic chain channels and open channels. On one hand, the "small CEO" coaches can offer marketing and organization guidance; One the other hand, services can be offered for contracting bodies to support their resource allocation and distribution as respond to demands of "small CEO" anytime and anywhere. There are 57% of the total employees to get into the contracting bodies, 432 "small CEOs" at the front-end market contracting bodies and 45 persons in the professional operation teams for direct support service, which the layout of startup development featuring "contracting bodies + professional support operation teams".

2015 CSR Report 9 The smaller contracting system triggers reform to the faulty traditional pyramid functional administrative structure. Under the structure of traditional pyramid functional administration, the grassroots business units and employees are usually passive to execute the requirement and instruction from the superior, thus the support from the superior institution to the grassroots business units and employees is not in place in a timely way. China Telecom explores the reform by building the grassroots-oriented integrated service support center and building the bottom-up reverse order dispatch and evaluation system with focus on those problems reflected in the smaller contracting system and in combination with the evolution trend of organizations in the mobile Internet era so as to empower the frontline grassroots with evaluation power and turn the superior institutions from target disintegrators and management examiners into rule makers, resource suppliers and service supporters.

Diagram of “Inverted Triangle” Supporting System Established by China Telecom

Pyramid Functional Administration Inverted Triangle Supporting System

Managers Smaller Unit Smaller Unit Smaller Unit Give Orders

Layer- Management by-layer Consolidation Transfer Resource Penetration Service Support

Managers Frontline Passive Execution

In the end of 2015, China Telecom preliminarily set up the “inverted triangle” support system at the prefecture and provincial level and the headquarters. Those provincial companies and prefecture branches set up a comprehensive service support center to offer a package of support services like sales support, order processing, commission settlement and material distribution, etc. At the headquarters, a comprehensive service support system was set up to solve problems with work orders that they cannot solve the problems on the site.

Achievements Made by China Telecom in “Inverted Triangle” Supporting System in 2015

· The monthly average number of orders dispatched by "small CEOs" of grassroots units was 27000. The order response time was averaged at 1.6 days with satisfaction rate of over 90%.

· The investment response and engineering construction periods had cut by about 50% on average, and the centralized processing efficiency of work orders had improved by over 30%.

· The time allocated by "small CEO" of grassroots units to customer marketing service grew from 30% to 70%, and the non-production workload dropped substantially.

【“Yiwen” efficiently resolves the doubts from grassroots and front line】

In the course of setting up the “inverted triangle” support system, Zhejiang Branch developed a mobile Internet tool called “Yi Wen”(easy to ask) targeting at problems like who to turn to when the grassroots staff get problems, slow response of superior professional departments to frontline support, long procedure to solution and inter-agency and inter-layer problem to offer expert service for frontline employees so that their questions can be asked anytime and anywhere and they will have more time to focus on business sales and customer service. In 2015, as it was promoted province-wide, “Yiwen” was very welcomed by the frontline staff.

In the branch of Jiaxing City, the "Yiwen" service platform received 5531 valid questions from September 14 to November 18 at an average response time of 3 minutes, whose 5-minute response time reached 93%. The questions or problems can be solved in one half and 15 minutes on average and the solution can be given to 90% problems in two hours, which greatly improved internal efficiency with regards to "inverted triangle" support and operation. "If you've got a problem, ask "Yiwen"; With Yiwen, no doubts at all. The grassroots and frontline employees give thumbs-up to "Yiwen".

As I feel first-hand, "Yiwen" is easy to use and efficient. For those past problems, like we don't know which authority to turn to for solution when we met difficulties in customer service, but now, what we only need to do is to submit the problem to the system via our mobile device, then the back end will handle the problem by forwarding it to the expert, following up the whole process so that our problems can be solved shortly.

——JIANG Wangyan, Custom Manager of Zhongshan Suboffice with Nanhu Branch Office, Jiaxing Branch

10 China Telecom 【Voice from “Small CEO” of Startups】 Highlight Responsibility In 2014, I dissolved the labor contract with the Branch and competed for the "small-CEO" position of contracting unit at a village of Anyuan Town. I built up my own contracting team and embarked on the path of business startup. Compared to the past, now more workload or good attitude will make a difference. I can work in my own way and really get a sense of achievement, which is to make unremitting efforts to achieve win-win development of both China Telecom and myself.

-- DING Donghong "small CEO"of contracting unit in Anyuan Town of Gangu County Branch, Tianshui City, Gansu Province

In 2013, I competed the position of deputy head of branch office in Daxinzhuang Town, Fengnan District and left my former position as the director of household customer department at the city-level branch. Instead of the work at the former branch office with "waiting for work arrangement, dependence with each other and seeing others take the first step" as the core, I tried my best to ask for more resources from the district branch. After the unit got smaller, the station work mainly focused on customer searching, user data analysis, customer maintenance and resource seeking. Our grassroots and China Telecom are united as a community of shared interests. The employees have changed their views about work, getting more initiative and taking more responsibility, hence the teamwork capability has been improved greately.

—YANG Fei, Head of Daxinzhuang County Station of Feinan District Branch, Tangshan City, Hebei Province

In October, 2014, I competed for the position of "small CEO" at the substation of network operation and the county branch offered cost and charge-related resources down to us as well as the rights to staff use and examination. We make the contracting transparent by applying the "full credit" model to salary distribution and identifying the mark for each work task based on the dimensions of difficulty, time consumed and comprehensive skill requirements. So, those with more work done, more efficiently and better will get more compensation to fully motivate the employees 'initiative. In 2015, 200,000 yuan were saved for energy consumption and the performance income of team under contract grow by 60% than before, which I’m truly proud of.

——HUO Jun, small CEO of Network Operation Branch office under Anzhou Marketing Center in Mianyang City, Sichuan Province

【Comments from Management Level on Grassroots Startup Reform】

Through the smaller contracting reform and "triangle" support system building, the grassroots employees develop motivation to work and the long-lost passion for entrepreneurship comes back.

——QI Fei, General Manager of Weinan Branch, Shaanxi Province

Just as the Chinese saying goes, every trade has its master. State-owned enterprises just put into practice the national initiative "public startup and innovation" by promoting the smaller contracting system, so as to let more people do work freely and make more dreams come true. The key is to adjust measures to local conditions and fully tap the public potential and initiative.

——XIAO Zhentao, General Manager of Zhengzhou Branch, Henan Province

The smaller contracting system aims to fully stimulate the endogenous strength of grassroots units and arouse every frontline individual's initiative by unifying the responsibility and rights together and putting power into the right place so that the grassroots staff can start up freely and the persons in charge can be guided to invest in stores or introduce private capital, treating the contracting just like their own business.

——YIN Yiping, General Manager of Anhui Branch

The smaller contracting system can build a platform for employees at different levels and motivate the employees' initiative to startup and innovation. Employees will take the work and customers'business as their own business; The "inverted triangle" support transforms employees' mindset from being self-centered to market-centered, thus the Branch will gradually embark on the path of sound development.

——QIN Xueshou, General Manager of Gansu Branch

2015 CSR Report 11 Through practice at various enterprises, the grassroots business units of China Telecom gradually turn into relatively independent self operation bodies. By market-based competition and selection, the "small CEOs" are given the rights to people use, examination, remuneration distribution and resource allocation. The remuneration of "small CEO" and staff are closely related to their performance. Thus, the payment can be high or low and employees can work based on their wish. The superior institutions change their identity to provide effective support service for grassroots. China Telecom sets up the new plaform for startup development.

Offer Platforms

· Common staff turn into small CEO · Public employment by competition Offer Resources Offer Mechanism · Supporting cost resources and · Free and two-way team selection and building autonomous distribution · Self operation and allocation · The frontline is given right to investment initiation Offer Support

· Inverted-triangle support to relieve burden for Offer Incentive grassroots Small CEOs and · Connected growth of income between · Reverse examination to give more voices to the Their Teams individuals and enterprises frontline · Personal honors and team building

Startup Development Platform for Grassroots Employees

By the end of 2015, the Group had established 57,000 smaller contract units, involving 160,000 employees to engage in business startup and over 10,000 administrative staff have gone to the frontline for startup and 25,000 innovative talents take the position of "small CEO" for one or more smaller accounting units through position recruitment competition to lead the contracting team for startup development. The grassroots employees are motivated for more passion and they can share the reform dividend with the Company.

Group Photo of Corporation-wide “Best small CEO” Representatives Honored on May 22, 2015

The grassroots startup development reform of China Telecom also effectively drives entrepreneurship in the whole society. According to incomplete statistics, now every branch office of China Telecom can mobilize over three social startup bodies by working together to promote the prosperous development of information service sector.

Technology Research and Development

China Telecom actively answers the call of the central government for overall planning and requirements on technological innovation by basing on three institutes and working with external communications enterprises, higher education institutions and academia to continuously promote research on key technology in key fields like LTE, cloud computing, big data, Internet of Things and Next-generation Internet. In 2015, ten ITU-level international standards were completed by taking the lead and seven ones were developed by working together.

12 China Telecom Main Achievements of China Telecom in Technology R&D in 2015 Highlight Responsibility

· The LTE network technical specification was publicized and a complete LTE network technical standard system of China Telecom was formed.

· The "six-mode (GSM,CDMA, WCDMA, TD-SCDMA, TD-LTE and FDD-LTE)” terminal industrial standard was formulated.

· CT led the completion of the first international technical standard of ITU-T in cloud computing, big data, SaaS, completed its own first ITU-T international technical standard in cloud security and entered the international standards field of ITU-T in smart city and industrial Internet, which filled in the gap as an enterprise.

· CT jointly led the completion of ISO/IEC18880 as the first international standard of its kind in the global energy Internet industry, which was of significance to advancing integrated development between environmental protection and new-generation information technology and improving China's position in green ICT industrial technology.

· CT worked with Tshinghua University to lead and complete IETF RFC7596, listed as one of three international mainstream transitional technologies.

· With Alibaba, Tencent and Baidu, CT jointly released "Scorpion 2.5" technical specification to transform the Chinse server market from "Made in China" to "Designed by China".

The Intellectual property management is enhanced. In 2015, 442 new authorized patents were added, among which 255 were for invention patent authorization. 1268 software copyrights were registered and 136 new trademarks were applied for registration.

R&D Investment by China Telecom over the Past Three Years

R&D Investment（RMB 100 million） Share of R&D Investment in Revenue（％）

64.1 61.0 1.8 1.8 56.5 1.5

2013 2014 2015 2013 2014 2015

Note:The indicator "share of R&D investment in revenue" changed from "R&D investment/Corporation's consolidated revenue" to "R&D investment/Corporation's revenue on main business" starting from 2014.

R&D Achievement by China Telecom over the Past Three Years

Among which 其Among 中 which Total Number Total Number of Year of Standards Prizes Won International National Industrial National Prizes Provincial Prizes Developed Standards Standards Standards

2013 9 1 8 38 22 0 16

2014 11 0 11 62 22 0 40

2015 6 0 6 58 18 0 40

2015 CSR Report 13 Product Innovation

China Telecom actively responds to the requirements of National Guiding Opinions on "Internet+" Action by working closely with customers in various sectors, including industry, agriculture and business through the application product bases of industrial Internet formed by sixteen bodies in nine sectors. We work hand by hand with our partners to carry out the "Internet+" project by boosting the transformation of customers in production and operation pattern, improving product and service quality, enhancing operational efficiency, cutting operational costs and realizing transformative upgrading. Through seven public Internet application enterprises, we continue with R&D to provide Internet YIN Wanhao, the agricultural technical staff of Pingan County in Haidong City, Qinghai Province explained the pepper planting technology to the greenhouse farmer. application products of public consumption type.

Qinghai is broad, but the traffic is not convenient. One of our agricultural 【Boost Industrial Internet with Weichai Power Group】 technician can help a dozen, or even tens of or a hundred of farmers. In the past, they don't have enough time to help, and some problems cannot be solved Weichai Power Group is a large enterprise of automobile and equipment quickly; Now, with "Nongji Bao" and its communication circle, any problem can manufacturing in China. It boasts four service platforms of vehicles & be reflected on that, which really improves our work efficiency and solve actual engines, powertrain, luxury yachts and key components. By working closely problems. together, China Telecom and Weichai Power Group carry out research and solve difficulty problems in terms of smart network of production lines, smart ——YIN Wanhao, technical staff at Agricultural and Pastoral Bureau in products, corporate cloud, industrial big data analysis and application. In Pingan County of Haidong City, Qinghai Province 2015, breakthrough was made in the fields of ubiquitous connection of network, production line and smart product big data application; meanwhile, further 【Boost Rural E-commerce】 efforts were made to innovate the product design model, R&D model and after- market service model with Internet as the medium and channel. Tianhu Cloud Commerce Branch under Sichuan Branch of China Telecom takes active part in the rural project of provincial government for e-commerce by exploring and developing the promotion and sales model of rural "Internet+" and establishing over 6000 rural cooperatives of Tianhu cloud e-commerce.

China Telecom is the pioneer of domestic operators in such key areas as In October, 2015, Yueming Village of Shuiwei Town in Xuyong County sold over 15 tons of green rice network application research, big data analysis, cloud computing service and in two days through the promotion and sales model of “Internet+” information security services, Moreover, it is a good practitioner of integration between industry and informatization. As for our cooperation with China Our village is located in the mountainous area, where market information Telecom, We have every confidence to jointly build with them the Chinese is lagging behind. Despite bumper harvest in October, it becomes a problem version of "Industry 4.0"! with whom to sell and how to sell. The "Internet+" sales model of Tianhu Cloud Commerce really solves our practical problems. ——WANG Yong, Senior VP and CPC Party Committee Chief of Weichai ——ZHOU Zhongyong, Village Secretary of CPC Party Committee with Power Group Yueming Village, Shuiwei Town of Xuyong County, Luzhou City of Sichuan Province

【Nongji Bao】 Ningxia Branch coordinates the autonomous district government to launch the e-commerce project involving 1000 villages in 2015. Fifteen county-level "Nongji Bao" promoted by China Telecom builds a bridge of rural e-commerce service centers and 1000 village-level e-commerce service communication for agricultural technical personnel, technical experts and stations were established and the e-commerce service and logistic distribution agricultural and pastoral professionals. Qinghai Branch and the provincial system was built covering most of rural areas, which provides farmers with agricultural and pastoral bureau work together to help farmers get informed purchasing and marketing agency services and expand the Internet-based of supporting policies via the platform of "Nongji Bao" so as to turn agricultural sales market of agricultural products so as to cut 15% to 20% of procurement technicians into "versatile" and "self-learning" IT promotion experts to solve prize off farmers on production and life related supplies by 15% to 20%. practical problems of farmers in a timely manner.

14 China Telecom Innovation Incubation 【E-surfing Venture “Garden” incubates 】 Highlight Responsibility

Weiwei (Shenzhen) Network Technology Co., Ltd., as a technology Starting from early 2012, China Telecom launched an innovation incubator company founded in December, 2014, focuses its products on e-name card by gradually establishing three main innovation incubation base in Shanghai, (identification), near-field interaction and sensing (Bluetooth, iBeacon and South and Beijing. From the startup incubation service for internal employees supersonic, etc.) in the fields of e-signature and near-field sensing, including at the beginning, it has developed into incubation investment service for both software service and hardware equipment. Weiwei possesses a series of internal employees and social startup professional. In 2015, the innovation cutting-edge technology in these fields and many proprietary patents. Its and incubation base building was continuously advanced to promote the products are widely used in the sectors of stationery, conference and exhibition, reform of mixed ownership economy with support. Within the year, two batches insurance and sales with a leading shipment within the industry. of 49 "Garden" projects inside the Company were incubated. Meanwhile, the resources of China Telecom in capital, network, technology, talents and Upon establishment, the registered capital amounted to 1.25 million, creativity are combined with social resources via the Internet to provide services among which E-surfing Venture held 20% and the startup team held the other of joint office, industrial matching, resource openness and technical support 80%. In 2015, the employees grew from five to thirty and the annual revenue reached RMB 5.5 million. In December 2015, the A-round financing valued for entrepreneurs and further boost social innovation and startup. By the end of at RMB15 million was completed with its valuation at RMB 100 million after 2015, E-surfing Venture Capital Co., Ltd of China Telecom (simply referred to as investment, which means its capital appreciates by 68 times. “E-surfing Venture”) had incubated a total of 175 “Garden”-related projects in eight batches for four years, invested 18 startup companies, among which five introduced social capital. The startup teams of state-owned enterprises, as long as given an opportunity, will also succeed!

——LI Ziyang, Founder of Weiwei(Shenzhen)Network Technology Co., Ltd.

Cooperation on Startup and Innovation

In the course of promoting “public startup and innovation”, China Telecom attaches importance to cooperation with various enterprises and organizations in different ways so as to jointly promote the innovation and development of equipment, terminals and Internet application.

In 2015, the "Internet+" Action White Paper was released to promote in-depth communication and cooperation with customers in all walks of life. With vigorous efforts to advance cooperation on "Internet+", five new industrial alliances joined in and 21 provincial Internet+ Summits were held. The "Internet+" strategic cooperation agreements were signed between China Telecom with governments of eight provinces (autonomous regions and municipalities) and twelve leading enterprises. Over 60 "Internet+" benchmarking projects were signed with agreement in the industrial, medical, education and logistics fields. The prize of "Best On May 13, 2015, China Telecom Corporation released "Internet+" Action White Paper in Beijing and Internet + Solution Innovation 2015" by CIWEEK and the "China's Internet+ signed cooperation agreements with many key customers and business partners by working together Outstanding Prize” by Xinhuanet.com were awarded. to create the "Internet+" industrial ecosystem and promote application practice in many fields, such as "Internet+ Industrial Manufacturing" and "Internet+ Modern Agriculture".

【Jointly released six-mode and all-network devices】

On December 11, 2015, China Telecom and China Unicom jointly released Six-mode and All-network Device White Paper in Beijing to specify requirements of this kind of devices on frequency band, module, software and hardware and worked together to promote the production of six-mode devices by vendors so that users can buy more convenient all-network device products.

Purpose of Six-mode & All-network Devices? Tips

Six modes refer to six technical systems including GSM, CDMA, WCDMA,T D-SCDMA,T D-LTE and FDD-LTE. The six-mode and all-network devices can support 2G, 3G and 4G networks of China Telecom, China Unicom and China Mobile simultaneously, so users can freely select the network of operator, rather than change their mobile phone because of operator change. Accordingly, the device sales are much more convenient and vendor's production is more efficient and avoid the waste of devices.

2015 CSR Report 15 TO BUILD A NATION WITH POWERFUL NETWORK

As a state-owned key enterprise and major national communications carrier, China Telecom takes to build a nation with powerful network as its most fundamental responsibility to the country and society, endeavoring to develop basic communications network, build new information facilities, protect network information, safeguard emergency communications and actively promote industrial innovation and development.

16 China Telecom To Build a Nation with Powerful Network Powerful Network To Build a Nation with

Develop Basic Build New Maintain Network Safeguard Communications Information Information Emergency Network Facilities Security Communications

Develop Basic Communications Network

For a nation with powerful network, an advanced “information highway” is indispensable. As a major force in developing “Broadband China”, China Telecom accelerates to build “dual-100Mbps” mobile Internet and wired broadband network (both access speeds are above 100Mbps), energetically increases the speed while reduces the charge, promotes the evolution of Internet to next-generation network, tries to provide high-speed, safe and reliable network security, and actively develops the universal service.

Mobile Internet Coverage

In 2015, China Telecom carried out a 4G network action named “Speeding up the construction and increasing the quality”, through which, the 4G base stations reached 510,000 accumulatively and covered all cities and developed towns nationwide. Of them, all towns in eastern provinces (autonomous regions and municipalities directly under the central government) have been covered by the 4G network; and 45 key cities have been deployed with carrier-aggregation (CA) base stations and set up the “4G+” business brand.

4G Network Coverage

4G Network Outdoor Base Stations (Unit: 10,000)

2015 36.6

2014 12.0

4G Network Covered Cities

2015 343

2014 56

2015 CSR Report 17 【Building Fine 4G Network】 In Ningxia Hui Autonomous Region, China Telecom Ningxia Branch regulated the names of wireless network base stations and cells based on its China Telecom Jiangsu Yancheng Sub-branch conducted an innovative practical conditions, made grid-typed treatment towards the regions’s map, project named “User-perception-based 4G Network Fine RF Optimization developed a data analysis template for user complaints, precisely analyzed Study”, which has greatly reduced the network coverage overlap, significantly network quality, and performed close-loop management towards wireless increased the transmission speed of 4G netowrk and improved user perception. network optimization work, realizing intelligent, standard and worksheet- based work, having effectively improved work efficiency and the correctness of problem solving.

In Guangdong Province, Guangzhou Branch successfully achieved the 4G network coverage along Subway Line 1, 3, 5 and 6 at the end of September 2015.

Before, you would not dare to imagine to browse video files online with a mobile phone. But now, with the high-speed 4G network, I can watch movies during the commute.

——Zhang Wenjun, a Guangzhou citizen

In July 2015, the network optimization engineers from the Wireless Center of China Telecom Jiangsu Yancheng Sub-branch were testing 4G signals on a rooftop.

4G+ Tips

“4G+” is a mobile network that uses carrier aggregation (CA) technology to further expand network spectrum, optimize network quality and significantly improve network uplink and downlink speeds. While the maximum download speed of 4G network is 100Mbps, the peak downlink rate of “4G+” network is 300Mbps and peak uplink rate is 50Mbps, enabling it to be much faster to transmit videos, share photos, access to large files at the cloud end and loading complicated webpages. For example, under the best network condition, it needs about 14 minutes to download a 2G file while the “4G+” just 7 minutes.

Wired Broadband Access

In 2015, China Telecom advanced the fiber-oriented transformation of its wired broadband network in an overall way, expanded the construction coverage of all-optical network, completed the fiber reform of 170,000 cable communities and established a batch of all-optical network cities. In particular, Sichuan was the first to be an all-optical network province.

“Broadband China·Optical City” Project Achievements in 2015

Administrative villages accessing to wired broadband in 21 Houses covered by FTTH (Unit: 10,000 households) southern provinces (Unit: 10,000)

2015 27000 2015 27.0

2014 15500 2014 26.5

What new to use after access rate increase of wired broadband network? Tips

Wired BB access rate ≥ 8Mbps ≥ 20Mbps ≥ 100Mbps

Loadable, well-percieved Internet + SD IPTV Internet + HD IPTV Internet + HD IPTV+4K Video business examples

18 China Telecom 【Building All-optical Network】 Universal Service

Sichuan Province has 21 cities (autonomous prefectures) including 183 counties and 3,716 towns, and complicated terrain, which made it quite In 2015, China Telecom continued building communication networks difficult for broadband construction. In recent years, Sichuan Branch has for the rural area and remote villages and towns, through which, 5,430 been continuously investing a large number of resources to develop all-optical administrative villages and 1,049 natural villages now respectively have access network. By September 2015, it became the first all-optical province in China to broadband and telephone. The Company endeavored to improve the with 24 million households covered by optical network and their average information development level in the rural area by developing service outlets broadband access rate reaching 38Mbps. No matter you are an urban citizen there with adjusted measures to local conditions. or a farmer/herdsman living in remote area, now you are able to enjoy the world- Powerful Network To Build a Nation with class optical broadband and 4K HD videos.

administrative villages natural villages accessed accessed to BB to telephone

【Broadband Access in Remote Villages】

For remote villages with bad natural conditions, it not only is difficult to construct communications networks but also costs a lot to maintain the operation of the networks. In order to meet the daily needs of remote villages and the demands for Internet by modern agriculture development, China

Tibetan people Jiangcuo Tashi from Xinduqiao Township, Kangting City, Garze Tibetan Autonomous Telecom continued sharing the broadband construction and operation Prefecture, Sichuan Province was selling Chinese caterpillar fungus online at home via the 100Mbps maintenance tasks for remote villages in several provinces in 2015. optical broadband. In Guangxi Zhuang Autonomous Region, China Telecom completed the In 2015, 88% of communities and 73% of administrative villages in Fujian village connection development work in 107 administrative villages that had realized FTTH and FTTV (fiber to the village), and the broadband access rate not had broadband access before, including 58 extremely poverty-striken in 1 million house were upgraded to 100Mbps. Fengze District is the downtown administrative villages where the tasks were exceptionally difficult, 3 border area of Quanzhou, a hometown of overseas Chinese. After the district administrative villages and 1 village lived by national minorities, ending the government included optical city construction as a part of its people-centered history when there was no broadband there. program, Fengze Branch accelerated the retreat of old broadband equipment and upgrade and transformation of fiber lines. In early October 2015, the In Tibet Autonomous Region, China Telecom completed the special 100mbps optical network was accessed to homes 100%; the penetration rate project for 37 towns in terms of optical network access, realizing that 683 towns of China Telecom optical network reached 90% in the district with an average of Tibet all have 100% optical network or broadband access, and building an access rate of 28Mbps, making it become the first all-optical network district in information bridge for local farmers and herdsmen to get rid of poverty and Fujian. become better off.

With Fengze District becoming the first all-optical district in the Province, citizens can better enjoy HD TV, smart home, information-type products and other applications, and better experience the new “Internet +” life.

——Daily News, Oct. 26, 2015, General Office of Fujian Provincial People’s Government

In 2015, 85% of communities and 65% administrative villages in Shaanxi Province realized FTTH and FTTV, and the broadband access rate of 6.8 million houses were upgraded to 100Mbps. Miaochuan Village is located in the remote area of Xinjie Township, Chencang District, Baoji City, Shaanxi. In 2015, after the optical network transformation of the village, 297 households of villagers On June 25, 2015, China Telecom transported materials for town connection optical project in Gandeng Village, Motuo County, Nyingchi, Tibet Autonomous Region learned about policies, studied technologies and bought and sold products online via the 100Mbps optical network, thus the village becoming the first one In this year, Ngari Branch fully completed the arduous task of optical that every house has optical network connection in the western mountainous network access in 8 towns with extraordinary efforts, recreating new area of Baoji and an information demonstration village. achievements in information-based communication development in the Miaochuan Village abounds in chestnut and walnut. In the past, due to Qinghai-Tibet Plateau, and opening a new information channel for information- lack of information, we couldn’t sell them at good prices even at good harvest based applications such as e-governance, telemedicine, digital education and seasons. Now, we can promote products and negotiate with merchants about science and technology popularization in the farming and stockbreeding area. cooperation via the high-speed network. It’s really very convenient. ——Congratulation message from Ngari Administration of Tibet ——Qiao Changming, Village Committee Director of Miaochuan Village, Autonomous Region to China Telecom Tibet Branch in August 2015 Xinjie Township, Chencang District, Baoji City, Shaanxi Province

2015 CSR Report 19 What is “eNong Information Station”? Tips

“eNong Information Station” refers to the offline vehicle for 12316 village-level information service station, an “information into households and villages” pilot project promoted by the Ministry of Agriculture with the aim to facilitate balanced development between urban and rural areas. It helps farmers to solve specific problems before, during and after agricultural production, as well as satisfies their daily needs, enabling normal farmers and new agricultural operators to enjoy convenient, economic, and efficient information services without going out of their villages or houses, effectively improving farmers’ application level of modern information technology. After pilot application in 22 counties of 10 provinces in 2014, including Beijing, Liaoning, Jilin, Henan and Zhejiang, it was further promoted in 2015.

【Supporting and Serving “eNong Information Station”】

Henan Branch actively implemented the strategic framework agreement In Lishui, Zhejiang, Suichang County Branch set up a special taskforce signed by the Group Company and Henan Provincial Government, and greatly with its General Manager as the main responsible person to energetically supported the pilot application and promotion of “eNong Information Station” by support and serve the pilot work of “eNong Information Station”. giving play to its advantages in network and sales service outlets.

By the end of 2015, over 700 village-level “eNong Information Stations” had been set up in Sanmenxia, Hebi and Luohe, bringing benefits to hundreds of thousands of farmers. · Accelerated the development of relevant networks.

· Developed and promoted the “AgriTech Master” (“Nong Ji Tong”)app.

· Sent training to towns and villages, providing business startup and · Communicated with owners of stores and markets as well as large self-development capabilities to information officers. growers and breeders to develop and promote special information- based agricultural products meeting local needs. · Built a comprehensive rural information service platform integrating governance, business and service into one, which allows villagers · Used special funds to provide WIFI, 12316 direct-dialing, “AgriTech to see notices, village governance matters, recruitment, agricultural Pal” (“Nong Ji Bao”) and other information services to villagers free of and sideline products and other service information through online charge. television.

· Designated staff to provide guidance and training to special and standard stores of “eNong Information Station”.

By the end of 2015, around 16,000 villagers installed “AgriTech Master” app on their mobile phones in the whole county; 250 farmers’ mailboxes village- level contact points and 250 village-level websites for “10,000 connected villages” had been built, covering all the administrative villages of the whole county with over 10,000 registered users of farmers’ mailboxes, which can annually send more than 1 million pieces of service SMSs to those mailboxes. The information points provided services to 470,000 people, paid a total of 5.15 million yuan fees on behalf, saved more than 7.4 million yuan for farmers in terms of shopping by acting as purchasing agents, and achieved a sales volume of 410 million yuan with respect to agricultural products through e-commerce, up by 71% year on year. Some rural cadre praised such service by saying that it “warms the hearts of villagers and wins their applause by sending information down to the farmland and convenient services to their In November 2015, farmers in Sanmenxia City could consult about agricultural regulations and bedsides.” policies with online experts, about planting knowledge, local transaction prices of agricultural products and other information through 12316 free direct-dialing service. The “eNong” service app not only enables villagers to check the weather, In this year, our cooperative has developed more than 10 types of featured read agricultural news, but also learn about agricultural products’ prices in large agricultural products. Through publishing information online, our fresh fruit cities, practically satisfying our actual needs. and vegetables have been sold from locally to cities in the Northeast region, Shandong, Shanxi and Shaanxi, achieving an offline sales revenue of 10 million ——Shi Ruisong, Deputy Secretary of Party Committee of Haochuan Village, yuan and solving the last 1km problem for fruit & vegetables delivery. Sanren She Township, Suichang County, Lishui City, Zhejiang Province

——Bai Chunhua, Director of Chunhua Farmers Special Cooperative and Information officer of Xinqiao Village, Zhangwan Township, Shan County, Sanmenxia City, Henan Province

20 China Telecom Highlight: Speed Increase and Charge Reduction

In 2015, China Telecom seriously put into practice the state requirements of “speed increase and charge reduction” by freely increasing the speed for wired broadband users with access rate below 4Mbps, significantly lowering the tariffs for wired broadband and mobile phone data traffic; launching rollover data services, and cancelling long-distance roaming fees within the region of Beijing-Tianjin-Hebei.

China Telecom’s Main Results of Broadband Speed Increase and Charge Reduction in 2015 Powerful Network To Build a Nation with

2015 2015 2015 25.4Mbps 2.02 yuan/Mbps 0.08 yuan/MB

2014 2014 2014 yuan/Mbps 11Mbps 4.9 0.12 yuan/MB down down 33% 59% 131% year-on-year

Wired broadband average access rate Wired broadband unit bandwidth price/month Mobile phone data tariff

In terms of the problem of high international roaming tariffs in some countries and regions put forward by customers, China Telecom has actively carried out several rounds of negotiations with foreign operators, trying to maximally reduce tariffs. For countries and regions where the reductions after negotiations were not big, China Telecom adopted the method of direct corporate subsidies to reduce data tariffs above 10 yuan/MB or even nearly 90 yuan/MB all down to 10 yuan/MB or below. On July 1, 2015, China Telecom started implementing the adjusted data, voice and SMS roaming tariffs in 245 countries and regions.

Results Achieved by China Telecom in Reducing International, HK, Macau and TW Roaming Tariffs in 2015

% % % Maximum reduction for data tariff Maximum reduction for voice tariff Maximum reduction for SMS with mobile phones surpassed surpassed tariff surpassed

In 2015, China Telecom newly added 560Gbps bandwidth at Internet backbone straight points, further improving its interconnection capability with domestic communication operators; and added 654Gbps international bandwidth, further improving its international connection capability.

China Telecom’s Internet Bandwidth Capability in 2015

Gbps Gbps % Internet backbone bandwidth reached International connection Percentage of China Telecom’s international connection bandwidth reached bandwidth in China’s total international connection bandwidth

Build New Information Facilities

The digitalization of economy and society is increasingly dependent on the development of new information facilities and service capabilities such as that of cloud computing, big data and IoT. In 2015, China Telecom continued constructing relevant facilities at high standards, developed and promoted new products, as well as endeavored to provide leading services.

2015 CSR Report 21 Cloud Computing

Since the release of e-Cloud computing business brand in 2011, China Telecom has gradually formed a cloud-network integrated cloud computing infrastructure layout, upgrading from points to surfaces, covering the whole country in partition by cooperating with its networks and based on the localization choice demands of cloud computing facilities by government and corporate users. It carries public cloud, private cloud, industrial cloud and big data platforms, and enables users to access resources according to the principle of proximity.

China Telecom Cloud Computing Facilities Layout

Heilongjiang

Jilin

Xinjiang Liaoning Beijing Inner Mongolia Tianjin

Ningxia Hebei Shanxi Shandong Qinghai Gansu Henan Jiangsu National cloud computing center Shaanxi Anhui Shanghai Regional cloud computing center Tibet Hubei Sichuan Zhejiang Chongqing Jiangxi Hunan

Guizhou Fujian

Yunnan Guangdong Guangxi Taiwan

Hainan

In 2015, China Telecom accelerated the intensified development of its cloud computing service capability, committed to delivering cloud computing services with lower latency, better experience and higher safety to users.

· Expanded the basic resources like Internet data centers (IDCs) to satisfy the increasing resource demands of users: Guizhou Information Park newly added 4 data center buildings for server rooms, 1 central power building and 1 logistic building, which can provide a carrying capacity of over 5,000 racks and more than 80,000 servers; Inner Mongolia Information Park has built the largest micro-module system in the industry to provide services to Alibaba and other Internet companies in the Park.

· Promoted the construction of a data center interconnection network (DCI bearer network), smoothly enabling the deployment and optimization of user data traffic between different data centers; and the DCI bearer network Phase 1 has connected to 15 large Internet data centers nationwide.

· Drove the building of a content delivery network (CDN), covering cities and all provinces nationwide and providing high-quality content delivery services to customers. During the year, 200 nodes had been built to serve customers such as Xinhuanet, Sohu, ICBC and TCL.

· Improved the safety protection capability for cloud computing resources and services by relying on China Telecom’s “Cloud Dam” safety products to strengthen the anti-DDoS attack capability for cloud computing, realize normalized safe operation, and guarantee no major safety accident occurs. The high safety coefficient of the two parks in Inner Mongolia and Guizhou for their bearer services won high appreciation from customers.

22 China Telecom 【Construction of Regional Cloud Computing Bases】 In Guangdong, China Telecom led the construction of “Guangzhou Yungu Data Center”, the rack scale of which reaches 3,600, and is equipped In April 2015, China Telecom Cloud Computing (Shaanxi) Base started to with 260Gbps Internet bandwidth and 200Gbps private wavelength division operate. Integrating the roles of Internet data center, disaster recovery center, transmission system for Baidu, providing reliable infrastructure guarantee to cloud call center and cloud computing-big data analysis center into one, it is the businesses of Baidu and other Internet companies, and at the same time the largest cloud data information exchange center in the Northwest region, and facilitating developers to make independent innovation and start businesses one of China Telecom’s eight core cloud computing nodes, providing strong with Internet platforms. support to Shaanxi and the Northwest region in innovatively developing cloud platform applications, cloud solutions, cloud hosting, cloud storage, cloud acceleration, cloud desktop, cloud call center, big data analysis and other Powerful Network To Build a Nation with products and services.

Guangzhou Yungu Data Center

China Telecom is an important partner of Baidu and “Guangzhou Yungu Data Center” provides us reliable infrastructure guarantee. China Telecom Cloud Computing (Shaanxi) Base ——Wang Jin, Senior Vice President of Baidu

Big Data

China Telecom proposed to set up China Big Data Union, which gathered hundreds of organizations on the upstream and downstream of the industrial chain, and academic experts from China Academy of Sciences, Tsinghua University, Peking University, Beijing University of Posts and Telecommunications, etc. to launch data exchange standards for the Union, publish an open big data platform, and create a “common growth and shared dividend” big data environment with synergetic development among industry, academia, research and usage. In 2015, the Union brought in more than 20 industrial partners, and rolled out a “4+1” product system (risk prevention & control, precision marketing, consultancy report, regional insight and big data cloud) based on China Telecom’s open platform to jointly develop “big data +” products and solutions oriented towards governments and industries including finance, transport, tourism and e-commerce. Under the premise of strict protection of personal information, it has provided data services to dozens of corporate customers.

【“Golden Week” Tourism Consultancy Report】 Scenic Spot Tourist Flow Tourist Flow Origin Tourist Flow Trajectory Analysis Analysis Analysis During the National Day holiday, a large amount of travellers gather at places like scenic spots, bus/railway stations, airports and hotels. The local tourism authorities are all eager to grasp the dynamic data of passenger flow volumes, learn about the visitor structure and traveling laws to optimize and improve the qualities of relevant services.

In 2015, based on massive data, China Telecom provided consultancy Tourism Traffic Analysis Tourist Behavior Others... reports to several provinces by mining and analyzing visitor volume changes Analysis and their structure characteristics, helping the release of various tourism indexes for the National Day holiday.

Content Examples of the “Golden Week” tourism consultancy report during the National Day holiday provided by China Telecom in 2015

2015 CSR Report 23 IoT

China Telecom vigorously built a national intensive network platform architecture consisting of IoT private network, management platform and application platform, integrating both internal and external resources to provide one-stop, differentiated, safety-controllable and pattern-diversified IoT core platform service capabilities to upstream and downstream enterprises on the industrial chain. In 2015, on the basis of the carrying capacity of the 3G IoT private network reaching 1 million users, the 4G IoT private network construction phase 1 was completed, which could carry 1 million 4G IoT users and is expected to have the ability to carry 100 million in 3 years. During the year, China Telecom also sped up the R&D and cooperative promotion of IoT applications. Among them, based on the wearable platform, some wearable products such as smart localization watch for kids (the users of which reached 200,000), wireless blood-pressure monitor and localization bean were launched. By the end of 2015, the number of China Telecom IoT private network SIM card users had reached 1.01 million, covering 23 provinces (autonomous regions and municipalities directly under the central government).

【New Localization Watch for Children】 【Wireless Blood-pressure Monitor】

Previous localization watches for kids are able to locate positions but have Among the hypertension patients, many are the elderly. For them, on short battery lives and the localization information is not accurate enough, often one hand it not costs both time and money to go to hospital for measurement, incurring complaints. At the same time, their radiation effect to children’s health on the other hand, they often forget to measure when busy. Some sons and is another problem concerned by the parents. In January 2015, China Telecom daughters bought Bluetooth blood-pressure monitor for their parents to do IoT Branch launched an IoT edition children localization watch based on its low- self-measurement, but it’s still inconvenient for them learn about the value in radiation mobile communications network, which not only significantly improves time. In June, 2015, China Telecom IoT Branch rolled out first mobile-network- the battery life and localization precision with new technologies and algorithms, based wireless blood-pressure monitor, which is so easy to use that just need but makes the watch green, bringing better user experience. to wear the monitor on your arm and press the “Start” button. The result will be read out through voice and sent to the children’s mobile phones via the mobile communications module. The uploaded data can be stored without a limitation and pre-evaluated by the risk evaluation system provided by Chinese Hypertension League.

Localization watch IoT edition for children makes kids safer and assures parents. The wireless blood-pressure monitor makes it possible for my parents and me to examine the blood pressure at any time anywhere without going out, and ——Tian Qingcheng, Nanjing Rifei Electronic Technology Co., Ltd. take daily care based on the test results, bringing convenience, simplicity and health to us.

——Zhang Tie, a user from Nanjing

24 China Telecom Maintain Network Information Security

Network information security is a guarantee of the building of a nation with powerful network. China Telecom strictly abides by relevant laws and regulations on network information security, and seriously implements the tasks deployed by relevant ministries and authorities, to continuously improve its capability in protecting network information security.

Safeguard Network Security Powerful Network To Build a Nation with

China Telecom builds an integrated safety protection system of “cloud, management and client” based on its cloud computing security system, network protection system and safety product service system, to provide sweet security services to customers and create green, safe ecosystem for the industrial chain. In 2015, China Telecom released three series of products under “E-Surfing Safety”: “Cloud Dam”, safe office, and “E-Surfing U Shield” for payment safety, to respond to domain name server attack, mobile phone virus and other Internet security events in the first time and make fast treatment. Besides, the Company also cooperated with Tencent and launched “Security Center” to provide online virus killing service.

Functions of China Telecom E-Surfing Safety Series Products? Tips

· DDoS protective product “Cloud Dam”, based on China Telecom’s rich backbone bandwidth resources, strict maintenance system and professional safety team, has three core capabilities – attack monitoring, prevention & protection and tracking, offers near-source cleaning, attack tracing and other unique functions, and provides DDoS attack prevention and treatment services for various types of websites. With its leading prevention and protection capabilities, it won the “Best Technological Innovation Award” at the Global Internet Technology Conference 2015.

· Safe Office product, based on China Telecom’s UIM card hardware authentication, VPDN safe data channel and other safety service capabilities, realizes the safe separation between corporate and individual data, and provides mobile office security enhancement services covering the cloud, administrator and client to customers by integrating with safety service capabilities such as mobile device & application management (MDM) and office automation (OA), and combining with encrypted storage and other terminal & application safety management technologies, eliminating safety concerns in mobile office.

· Payment safety product “E-surfing U Shield”provides “chip” level protection to payment safety by loading digital certificates and keys to China Telecom’s UIM cards for mobile phones, and have the characteristics of data confidentiality, authenticity and completeness.

【Safety Products for Customers】 On October 23, 2015, the Economy, Trade and Information Commission of Shenzhen Municipality received a threatening letter from a hacker team, China Telecom Guangdong Zhuhai Branch actively provided safety claiming to stage a 400Gbps-above-scale attack to Shenzhen Public Bidding services to Zhuhai Municipal People’s Government and judicial authorities in Platform for Car Increment Quota on Oct. 26. Learning about that, Guangdong mobile office. By the end of 2015, China Telecom’s safe office products and Branch and Shenzhen Branch rapidly deployed “Cloud Dam” to the platform. “E-Surfing U Shield” had been widely used in governments at district and From 6:00 to 13:00 on Oct. 26, “Cloud Dam” identified and intercepted three municipal levels as well as judicial authorities in Zhuhai. rounds of large-scale hacker attacks. With the protection of “Cloud Dam”, till 15:00 that day, the bidding website ran normally and the bidding activity concluded successfully.

The creative combination of China Telecom’s safe office products and “E-Surfing The success of Oct. 26 safety guarantee work is attributed to the perfect U Shield” for CA, perfectly satisfies our mobile governance office requirements for safety combination of China Telecom’s hard strength in network and soft strength in service, swiftness and convenience. which fully represents CT’s high safety service capability.

——Wu Dongming, Technical Lead of Zhuhai ——Dai Zhi, Technical Director of Shenzhen United Assets and Maritime Safety Administration of PRC Equity Exchange

2015 CSR Report 25 Prevent Communication Information Fraud

In 2015, China Telecom implemented relevant instructions by the Ministry of Industry and Information Technology, the Ministry of Public Security and other authorities in jointly combating new criminal activities via the telecommunication network, and carried out special actions to prevent communication information fraud.

Special Actions Carried Out by China Telecom to Prevent Fraud via Communication Information

Accountability · The Group Company established a work leading team and an office for the special project, and assigned the tasks to mechanism specific units and responsible people. · All provincial companies established work teams for the special project and long-term mechanisms for the combat and governance work.

Joint service halt/ · Established a joint service halt/cancellation mechanism from the Group Company to provincial companies to improve the cancellation service halt/cancellation efficiency to involved numbers or lines. During the year, services to over 7,100 mobile numbers mechanism and more than 280 400-numbers were stopped/canceled.

Technical monitoring of · Strictly regulated the transfer of the calling number, and improved the capabilities of identifying, checking, monitoring, fraud phone numbers locating and intercepting number change behaviors and numbers not in compliance with regulations.

Real-name registration · Improved the identity and credentials verification technologies and strengthened the real-name registration management and control on social and online marketing channels. During the year, over 680 illegal online marketing channels were shut down. · Push forward the registration work of unregistered users in accordance with laws and regulations.

Illegal access · Eliminated illegal leased line resources and call center businesses; and strengthened the regulation and management of elimination 400-business operators. During the year, over 2,100 relay lines were closed and torn down, and illegal phone traffic had been intercepted for more than 600,000 times.

App store management · Conducted full-coverage key-word filtering towards the on-shelf apps in its app store every month to prevent illegal apps from being put on the shelf. During the year, there were 40 apps either didn’t pass the review or were taken off the shelf.

Propaganda · Continuously published warning information through China Telecom’s official WeChat, Yixin and Weibo accounts as well as short messages. During the year, the Company had compiled and sent 44 issues of reports on “Preventing Communication Information Fraud”, which had been read by 10 million people accumulatively.

【Green Internet】

By giving play to China Telecom’s advantages in network and big data, Zhejiang Branch launched an integrated all-dimensional prevention & control product that can protect against phone fraud, intercept malicious numbers and block spam messages, providing cross-terminal, cross-browser and no-client cloud checking and blocking services and having received high appraise from Zhejiang Provincial Public Security Department. By the end of 2015, the product users reached 24,000. In the month December, it intercepted phishing and fraud websites for 19,900 times per day in average.

Deal with Spam Messages Maintain Information Health

China Telecom attaches high attention to the governance of spam China Telecom distributed “Notice on Further Strengthening the messages. Under the leadership of industrial authority as well as guidance Information Security Work” and made some improvements to “China Telecom and cooperation of relevant social organizations, the Company continued Information Security Management Approaches” in 2015. The Company set up to strengthen the implementation of spam message governance rules and a full-time information security management unit with full-time staff to carry out processes, carried out number-level port message management accountability, training on this aspect. It also continued improving its processes in dealing and enhanced development of technical methods to vigorously control spam with illegal and harmful information and black list management; implementing messages. In 2015, the port SMS complaints against China Telecom only website recording work, maintaining the website record rate at 99.8%; and accounted for 3.37% of that of the whole industry, the lowest in the industry. timely identifying and shutting down websites suspected with illegal information.

26 China Telecom Safeguard Emergency Communications

China Telecom faithfully fulfilled tasks in safeguarding safe and smooth communications. In 2015, the Company immediately joined the rescue and relief work after the happening of natural disasters such as the earthquakes in Tibet, Pishan County of Xinjiang, Cangyuan of Yunnan and several floods and typhoons, and restored the communications in the disaster-hit area at the

fastest speed. It also successfully completed the communications guarantee Powerful Network To Build a Nation with tasks for significant events, meetings and games such as the military parade for the celebration of the 70th anniversary of the victory in the war against fascists, and World Figure Skating Championships. In the whole year, the Company dispatched staff for nearly 80,000 person-times, vehicles for over 10,000 unit- times, and generators for almost 10,000 unit-times.

Rescue and Relief Work In the rescue and relief work, China Telecom acted swiftly and efficiently, and its employees fought tenaciously without being afraid of difficulties. Their professional spirit is worth approving. 【4·25 Earthquake Relief in Tibet】

——Deng Haiguang, Vice Governor of Guangdong Provincial People’s On April 25, 2015, an 8.1-magnitude earthquake stroke Nepal, Shigatse Government and other areas in Tibet Autonomous Region were also affected badly. Then Tibet Branch made fast response, and devoted every effort to the relief work. After 29 hours of arduous efforts, the communications service at Zhangmu Safeguard Major Events Township of Nyalam County, which is a traffic hub between China and Nepal, was restored, setting up a life-saving communications line for the “golden 72 hours” rescue after the earthquake happened. 【Communications Guarantee of the Military Parade for the

During the rescue and relief period, China Telecom provided multiple free Celebration of the 70th Anniversary of the Victory in the Chinese services for the convenience of people in the disaster-hit area, such as free People’s War of Resistance Against Japanese Aggression and fixed phone for phoning relatives to report safety, free Internet, phone-number World War II】 non-stop service, free special card replacement, free battery charging, and free packed meals. On the morning of September 3, 2015, the military parade for the celebration of the 70th anniversary of the victory in the Chinese People’s War of Resistance against Japanese Aggression and world fascists was held in Beijing. China Telecom dispatched staff for more than 10,000 person-times and vehicles for 288 unit-times to guarantee safe and smooth communications, and successfully completed the task with the fulfillment of the goal “no network failure, no major accident, no complaint from VIP customers and no safety accident”.

China Telecom emergency communications service staff opened satellite communications in time at the road landslide place 8km away from Zhangmu Township

【Fight against Typhoon Mujigae】

On October 4, 2015, typhoon Mujigae attacked many areas in Guangdong, such as Zhanjiang, Maoming and Shunde, affecting 3.16 million people and badly damaging the communications facilities. More than 2,000 construction and technical staff of Guangdong Branch and China Comservice Guangdong Company ended their National Day Holiday in advance and rushed to the disaster-stricken areas for rescue and relief, winning appraise from the China Telecom’s emergency communications vehicle at Tian’anmen Square for communications provincial and municipal governments as well as customers. guarantee

2015 CSR Report 27 SERVE DIGITAL SOCIETY

With the popularization of Internet and mobile internet, as well as the development of new technologies and businesses such as IoT, cloud computing, big data and social networks, social production and life are entering into a new round of digitalization tide where industries utilize digital technologies to accelerate transformation and people’s life are increasingly digitalized. In such context, China Telecom digs further to understand customers’ needs, and continues innovation to provide digital technology-based products and services to help customers to enjoy digital life.

28 China Telecom Serve Digital Society Serve DigitalServe Society

Protect Customers’ Improve Service Lead a Digital Rights and Interests Capabilities Life

Lead a Digital Life

In 2015, China Telecom cooperated with partners on developing and promoting various smart applications to satisfy the digitalization needs in government, finance, education, healthcare, traffic, home and community.

Traffic Healthcare Finance

Homes & Government Communities Education

Smart E-governance

China Telecom actively supported local governments in building apps such as government clouds, government service hotlines, and online service halls to improve their social management and service levels as well as provide the public with digital, wide-coverage and high-quality smart government services.

2015 CSR Report 29 【E-governance Cloud Platform】 【Yunnan Food Safety Supervision Network】

In 2015, China Telecom built an e-governance cloud platform for The food and drug supervision information is closely related with Guangzhou municipal government, which reaches the provincial departments “safety on the tongue tip”. Yunnan Branch provided active support to Yunnan horizontally and counties vertically, and carries 95 application systems of Provincial Food and Drug Administration in building “Yunnan Food Safety 50 agencies of the government, having improved the information resource Supervision Network”, providing network access, platform applications, system utilization rate by nearly 8 times, saved 66.6% electric charge and 67.1% guarantee and consulting service to the food & drug supervision departments server room space, reduced 90% maintenance costs, and saved more than at different levels of the province and food production enterprises. An Internet- 40% of the information-based total financial expenses. The platform breaks the based information monitoring network covering the whole processes of food information barrier between departments by integrating information publication, production, sale and service in Yunnan has been set up. All process tracing of consulting service, online processing, and e-supervision into one. Now, citizens the production and circulation of food and drugs has been realized via the “Food do not need to go to several departments for information consulting and & Drug e-Connection” application. At present, mobile officing on mobile phones business processing. The efficiency of one-stop handling improves significantly. that have installed the app has been realized, providing services to over 450,000 food and drug manufacturers and operators. It also provides strong guarantee to the building of a food-drug safety system and the protection of consumers’ rights and interests.

E-governance Cloud Platform

China Telecom supports the construction of the e-governance cloud platform, effectively promotes the information-based government affairs processing, energy conservation and emission The usage of the Food Safety Supervision Network not only reduction, and guarantees the safety and stability of Guangzhou makes it easier for us to implement the Food Safety Law, to record 12345 government affairs hotline system. the food purchase and sale information according to laws, but also offers a platform to standardize the whole industry’s production and ——Zhuang Shaobin, Director of Government Affairs Office of operation, protects and facilitates the regulated operation of the Guangzhou Municipal People’s Government market.

【Strict Check for Farmer-Benefiting Funds】 ——Huang Bingliang, from Kang Yun Yuan Hot Pot Restaurant, Zhaotong City, Yunnan Province Both the government and farmers care about the distribution and supervision of farmer-benefiting funds. Responding to national farmer- benefiting policies with technologies, Gansu Branch in 2015 supported the It is of great significance for promoting new development of the local government in building a “Farmer-benefiting Funds Supervision Platform”, food safety supervision cause and putting into practice the corporate which includes the governing bodies of over 30 farmer-benefiting policies and accountability of food safety by working with China Telecom Yunnan projects, financial departments and institutions, involved towns, as well as the Branch to build the “Yunnan Food Safety Supervision Network”, which fund distribution process into its supervision sphere to guarantee the timely employs the Internet platform to improve supervision efficiency, and and full amount allocation and distribution of the subsidies and special funds, uses big data to drive supervision innovation. realizing the real-time dynamic monitoring of the allocation and distribution process. ——Liu Benjun, Deputy Director General of Yunnan Food and Drug Administration Currently, Pingliang City is fully promoting this platform, involving 33,000 farmer households and 1.255 million people. By now, the platform has been used for information query for 480,000 times. It improves the transparency of farmer-benefiting funds management by the government and makes it easier for farmers to rapidly inquire fund distribution and details, not only increasing the public satisfaction but improves government efficiency.

This farmer-benefiting fund supervision platform is simple, practical and easy to use with clear processes and complete functions.

——Xue Lian, from Population and Birth Control Bureau of Huating County, Pingliang City, Gansu Province

30 China Telecom In order to deal with the issues of less financial business outlets and Smart Finance weak Internet awareness in rural areas, China Telecom Orange Finance took proactive measures to make it cover towns and remote areas by popularizing Under the brand of “BestPay”, China Telecom keeps diversifying the BestPay-supported POS devices for offline mobile payment among rural and promoting safe and convenient smart financial services in the forms of merchants to enable convenient financial services for farmers just through “communications + payment” and “payment + financing”. In 2015, the quantity simple operation on phones for consumption and payment. of “BestPay” users surpassed 200 million, ranking among the top 3 of the mobile payment industry with a total transaction volume of over 770 billion yuan In the light of the “short, frequent, fast and urgent” financing demands and year-on-year growth of 119%. Its consumer finance business has covered of small and micro enterprises, China Telecom “Orange Small Loan” product 66 cities and areas in 16 provinces (autonomous regions and municipalities lowers the loan thresholds and simplifies the approval and lending processes, directly under the central government). having helped 300,000 small and medium-scale retailers to solve their financing difficulties. Now, the merchants just need to apply for the loan online via the BestPay app on their phones without to submit loan application paper Smart Financial Products Promoted By China Telecom in 2015 documents. The examination and approval process will be finished in 2 to 3 days. It makes “fast loan at home” into reality. Product Usage During holidays, villagers usually bought a lot of goods, making it tight Transaction · Integrating various payment services into one to provide for stores’ circulating funds. As this area is not within the reach of the Rural DigitalServe Society Fee one-stop convenient service to the neighborhood Commercial Bank, the merchants switched to BestPay and obtained tens of Orange · Providing diversified financing products to investors to thousands yuan as their circulating funds, the interest of which is lower than that Financing maintain and add values to the capitals of borrowing from friends and relatives. It’s very good.

Orange · Providing consumption-oriented credit service to users ——Liu Xiaofei, owner of the BestPay Commercial Alliance Installment Comprehensive Service Station at Xinzhuang Township, Datong County, Xining · Fully opening the individual crediting product- City, Qinghai Province Orange “Orange Point” through which users can enjoy more Credit conveniences in various social living fields with their credits 【4G-NFC Mobile Payment】 Orange · Providing big-data-based financing solutions to small Small Loan and micro companies as well as individual consumers On July 29, 2015, China Telecom and China UnionPay jointly launched a new 4G-NFC mobile payment product, which is safer and more convenient. China Telecom opens a special zone for China UnionPay in its 4G-NFC mobile 【Orange Finance Benefitting Tens of Millions of Homes】 wallet app, through which phone users can easily download their bank cards cooperated with China UnionPay to their SIM cards, enabling their phones to China Telecom has been keeping expanding the application scenarios function as their bank cards that can be used against 5 million POS devices of Orange Finance for the public to enable them to pay the bus fare by waving with the “UnionPay-Quick Pass” identity nationwide. By the end of 2015, China their phones and to shop by tapping the phones. Telecom mobile wallet app had been linked to Bank of China and the other 7 banks directly as well as the Agricultural Bank of China together with the other 14 banks through the China UnionPay special zone.

Out of curiosity, I changed my SIM card to China Telecom 4G-NFC card. You just need to take the phone against the POS machine to finish the payment cities (Unit: 10,000 without the need of using the QR code or scanning. It’s so convenient and I person-times) have good user experience.

——Li Zan, from Beijing UniStrong

How does China Telecom’s banks (Unit: 10,000) supermarkets 4G-NFC mobile payment product Tips and gas stations enhance the security?

China Telecom mobile wallet takes the financial grade Water-electricity-gas charges payment with Orange Financing has NFC-UIM card as its safe payment carrier, uses dual security been realized in 350 cities nationwide, serving 56 million person-times; traffic technologies of chip-hardware and software encryption, and builds penalties payment and TV fees with the app have also been realized in 230 security mechanism such as safe key, safety certificate and real- cities and more than 50 cities respectively. Besides, it cooperated with 17 banks name registration to guarantee safe and reliable user information and over 100,000 supermarkets and gas stations for credit card payment and and payment process, having obvious advantages in security. China mobile payment as well. Telecom mobile wallet opens a special zone for UnionPay, which improves its mobile payment service capability and provides more bank choices and more convenient consumption ways by card swiping to 4G-NFC mobile phone users.

2015 CSR Report 31 Cooperating with local education authorities and schools, Gansu Branch Smart Education built an intensive platform for teachers, students and parents for resource usage and communication by relying on the education cloud, which consists China Telecom tried to learn about the demands of education of three spaces respectively for teachers to teach online, students to study management, teaching & research management, and students’ studies in terms synchronously online, and parents to learn about their kids’ online study status, of informatization by communicating and cooperating with education authorities, to co-educate the students by both the school and parents. By the end of 2015, schools, teachers, students and their parents to facilitate the development of there were 68,000 teachers users and 514,000 parents users in Gansu. smart education.

【Education Cloud】

Cooperating with Beijing Chaoyang Education Committee, Beijing Branch supported over 3,000 teachers to participate in the development of excellent courses by relying on the education cloud, provided could-based app “School Connection” (“Xiao Xiao Tong”) for over 390 schools in the district, and widely applied “E-schoolbags” at classes.

On June 1, 2015, teachers of Jingning County, Pingliang City of Gansu Province were participating in the training of how to use the Education Cloud resource platform.

The education cloud platform has improved my efficiency in looking for quality resources for lessons preparation, and teaching online is easier and more joyful.

—— Pan Yapeng, Teacher of Jingning Wencui High School, Jingning County, Pingliang City, Gansu Province

On May 12, 2015, a student of Beijing Chaoyang Experimental Primary School interacted with her With the education cloud platform, the kids can not only replay the teacher via the E-schoolbag for learning teaching videos to re-learn the missing knowledge but do the synchronized exercises, greatly improving their study efficiency. The “E-schoolbag” interactive classroom records the complete behaviors within the closed loop of teaching and learning, through which we can precisely ——Ma Jianjie, parent of a student of Zhuanglang No. 1 Primary School, learn about students’ study situations and teachers’ teaching status with the Pingliang City, Gansu Province precipitation of data in the teaching-learning process, providing significant references to how to better improve teaching. A good teaching system cannot Zhejiang Wenzhou Branch built a four-level interacting education cloud, do without the support of a powerful education cloud platform, where the enabling the mutual access between the resource platforms at the municipal, massive educational resources can provide abundant materials to teachers and county and school levels and the provincial education cloud resource platform. students for teaching and learning respectively. It carries some smart campus apps such as online education, MOOC (Massive Open Online Courses), Flipped Classroom (referring to re-adjusting the ——Chen Lihua, Principal of Beijing Chaoyang Experimental Primary activities in and out of classroom and switching the decisive rights of learning School from teachers to students) and Sunshine Campus, to promote the whole public to use education resources, prevent information resources from becoming an Fujian Yong’an Branch co-built an education cloud desktop with Yong’an “isolated island”, and avoid waste incurred by repeated construction by schools Education Bureau, and enabled the school networks, education & scientific and education bureaus at the district or county level. research network as well as a total of over 3,000 computers from audio-visual rooms and teachers’ offices of 50 schools to fully access the cloud desktop, realizing a, intensive, convenient, safe and resource-sharing education network, and effectively reducing the total investment of the education sector to informatization.

By integrating the cloud platform, education & scientific research network, Internet and study management into one, the Yong’an education cloud project not only improves the teaching and management level through technological innovation but also reduces the one-time capital investment of the education department, having achieved good results.

——Pan Zili, Deputy Director General of Yong’an Education Bureau

32 China Telecom Smart Healthcare 【Mobile Nurse Station】

By integrating smart terminals and customized professional medical China Telecom has been cooperating with medical companies and units, software, Yunnan Branch provided a “Mobile Nurse Station” solution to by actively supporting the development of the medical and health platforms, as hospitals, creating a new working mode for smart mobile healthcare. As the well as developing and promoting Internet-based medical apps to improve the terminal keeps real-time connection with the hospital’s information system intelligent level of the medical and health sector. via the wireless network, the nurse will complete the processes of patient information inquiry, vital signs entry, doctor advice whole-process tracking, and nursing work-load statistics by using the terminal to scan the bar-code 【Cloud-based Medical Services】 wristband worn by the patient that contains the patient’s admission number.

Yangshan County of Qingyuan City, Guangdong Province is a national- Before, the nurse had to check the doctor’s advices at the nurse station level impoverished county that is located in a mountain area with poor and then went to the ward to examine or treat the patient. Even the nursing transportation. In order to improve the medical services to local villagers, record was written on paper. Now, the patient information can move out of the Guangdong Branch cooperated with Guangdong No. 2 People’s Hospital static nurse station. E-record also reduces down mistakes and improves the by integrating the hospital’s medical resources, storing them on the “Medical reliability of the nursing work. “Paperless, wireless network-based officing” Imaging Cloud Platform”, through which to provide big-data-based medical improves the hospital’s work efficiency and quality and lowers medical errors services. At present, such “cloud-end-based” services had been extended to and accidents. Moreover, the nurse has more energy and time to look after DigitalServe Society health service stations and health centers respectively in 159 administrative the patient, practically putting into practice the quality service requirements villages and 18 towns of the county, providing remote inquiry and diagnosis, of “giving time back to the nurse and the nurse to the patient”. Currently, more health education training and other services to villagers. than 10,000 nurses in part grade-3 and grade-2 hospitals have been equipped with the “Mobile Nurse Station” terminals.

On November 2, 2015, the Dubu Health Center in Yangshan County, Qingyuan City, Guangdong Province was providing training on health to villagers through China Telecom’s “Medical Imaging Cloud Platform”.

Now, if I need to see a doctor, I just go to the Township Health Center located at the village entrance, where my medical records at the Provincial No. 2 People’s Hospital can be all shown, saving 6-hour round-trip time from/back home to/from Guangzhou. It’s very convenient. On December 10, 2015, a nurse of Xishuangbanna Dai Autonomous Prefecture People’s Hospital was identifying the patient’s information and comparing information of doctor’s advices by using a “Mobile ——Wang Guoqing, from Dubu Village, Dubu Township, Yangshan Nurse Station” handheld terminal. County, Qingyuan City, Guangdong Province

The “Mobile Nurse Station” has covered all clinical nursing units in our Based on a common service philosophy, our hospital and China Telecom hospital, realizing the extension of the hospital information system to wards, find an entry point to build a common platform, with which we believe we’ll find the whole-process tracking of practical implementation of doctors’ advices, solutions to the current medical weakness and bring benefit to people. guaranteeing real-time management of nursing tasks and nursing monitoring, and having received good results at clinics. ——Tian Junzhang, President of Guangdong No. 2 People’s Hospital ——Liu Pili, Vice President of Malipo County Hospital, Wenshan Zhuang & Miao Autonomous Prefecture, Yunnan Province

2015 CSR Report 33 【Smart TCM】

For doctors who use traditional Chinese medicine (TCM) skills in clinical work and major in TCM, TCM and western medicine (WM) as well as rural doctors, Gansu Branch developed a mobile device-based Internet app “Smart TCM”, which can provide TCM prescription knowledge library, TCM diagnosis and treatment methods, and diversified learning resources under the help of smart technologies and has become a carry-on general medical assistant to TCM doctors, having received approval and recognition from Gansu Health and Family Planning Commission, Gansu Provincial Administration of Traditional Chinese Medicine and other competent departments. By now, “Smart TCM” can provide about 41,000 pieces of TCM prescription and 11,000 pieces of WM prescription. The number of cases in it has reached 57,000. The app has been downloaded by over 30,000 users, of which, 20,000 are active users, covering 58 counties/districts of 14 cities/prefectures in Gansu as well as Guangdong, Hubei, Qinghai and Beijing.

TCM prescription

Users having downloaded the app

(Unit: 10,000 pieces)

(Unit: 10,000) WM prescription

(Unit: 10,000 pieces) Active users

Cases

(Unit: 10,000) (Unit: 10,000)

Being convenient and practical, the “Smart TCM” is a good assistant to rural medical staff at the grassroots.

——Mei Xuelong, a doctor from Henan Village Clinic, Chang’an Township Central Health Center, Ganzhou District, Zhangye City, Gansu Province

Smart Home and Community

While bringing Internet into tens of thousands of homes, China Telecom conducts active cooperation with radio, film and television department and commercial partners to provide high quality network TV (IPTV or iTV) and other information-based products for home life. In 2015, the Company rolled out its upgraded product “E-surfing HD”. Based on community service and social management demands, China Telecom developed and promoted an information-based application “Home- based Care for the Aged” for smart community development, enabling both homes and communities to enjoy new digital experience.

【New 4K TV Experience】

On November 22, 2015, the first round game for the championship of the CFA Cup was held between Jiangsu Guoxin Shuntian and Shanghai Lvdi Shenhua teams. Jiangsu Branch became the first in the country to use 4K signals to make cross-region, synchronous live broadcast to Jiangsu and Shanghai iTV users.

On December 31, 2015, China Telecom Smart Home Operation Center cooperated with Jiangsu TV on providing 4K UHD live broadcast of Jiangsu TV cross-year party to its iTV users, which was also the first attempt in this respect in the country. That night, the iTV 4K users in Jiangsu, Sichuan, Guangdong, Shanghai, Hainan, Jiangxi and Chongqing enjoyed the new immersive visual- audio experiences of super fidelity brought by 4K Internet TVs.

34 China Telecom What is 4K TV? Tips

4K TV refers to the TV, the screen physical resolution of which reaches 3840×2160 pixels, that can receive, decode and display video signals with corresponding resolution. Having a 4K TV of such resolution and functions, together with 100 Mbps network access bandwidth, the audience will be able to see clearly every detail and close-up shot, obtaining an immersive watching experience.

【Smart Home-based Old-age Care Service】

After surveying the demands of the aged for staying at home, Sichuan Hui’an Branch of Fujian Quanzhou has been actively building “home- Branch started the building of a “Xiao Xing Tong” information service platform, based old-age service” by integrating online and offline resources such as based on which to develop old-age care record e-management, localization 968962 hotline, real-time location and the terminal of caring the aged, having for the aged, individual health management, service linkage and worksheet provided sweet, convenient and benefitting services to nearly 3,500 elder management and other systems. In 2015, the service covered 21 cities/ people aged above 70 of Luocheng Township. On June 3, 2015, an elder prefectures in the province with 170,000 users. It also provided door-to-door people named Zheng Shang was suddenly attacked by some disease. She services including meal assistance, bathing assistance, cleaning assistance, used the one-button for emergency call function of the service platform and DigitalServe Society emergency assistance and treatment assistance to over 600,000 home-based successfully saved. elders in the province, as well as professional social services such as daily care, housekeeping, rehabilitation nursing, health care, and mental care, and has fostered and supported nearly 5,000 home-based old-age care service companies and social organizations. The platform created information-based intelligent virtual nursing home operation model that takes public welfare as the premise, socialization as the basis and marketization as the supplement, winning the “Gold Medal among the Excellent Results of China Communication and Information Technology Application” by China Information Harbor Forum 2015.

In May 2015, an elder people living at Luocheng, Hui’an was very happy after receiving a China Telecom “Home-based Old-age Care” cellphone.

Without the one-button calling hotline of the “Home-based Old-age Care” platform, and without the emergency help from the platform staff, I might never be able to see my mother.

——Son of Zheng Shang, resident of Luocheng Township, Huian County, Quanzhou City, Fujian Province

In October 2015, the elders were trying a health AIO machine at the “Xiao Xing Tong” platform exhibition booth at the 3rd China (Sichuan) International Aging Industry Expo.

Smart Traffic

China Telecom cooperated with enterprises and public institutions in the traffic industry to promote “smarter” transportation.

【“Love City in Gansu” for Convenient Travel】

With the increasingly serious traffic jam problem in Lanzhou of Gansu, One morning I complained that the road was so congested when arrived Gansu Wanwei Company, a subordinate of Gansu Branch, cooperated with at the company, then one of my colleagues told me there was an app I can use the government on developing smart traffic solutions to integrate relevant to see the road conditions and find one that is not congested. So I downloaded traffic resources including bikes, buses, cars, roads, railways and planes, and the “Love City”. Though I haven’t used it for a long time, I do feel it’s good. released an mobile app “Love City in Gansu”, offering some modules to citizens for traveling references such as “Smart Buses”, “Smart Road Conditions”, ——Zhang Wenbo, a worker of some private company in Lanzhou “Public Bikes”, “Highway Conditions” and “Smart Parking Lots”. Now, with users reaching 2 million, it has brought convenience to citizens and alleviated traffic jams.

2015 CSR Report 35 【Che Yi Xing】 【Theme Activities on “3.15” Consumer Rights Day】

Fujian Branch and South East (Fujian) Motor Corp., Ltd. (SouEast Auto) China Telecom companies at various levels carried out an activity on “3.15” conducted cooperation and developed SEMI-II intelligent vehicle system, Consumer Rights Day themed at “Joint-governance for Smooth Consumption” which relies on the “Che Yi Xing” IoV platform developed by Fujian Branch, to improve consumers’ rights and interests protection awareness. not only provides traditional functions including Bluetooh telephone and multi- media playing, boasts some special services such as emergency call, crash In Jiangxi, the provincial branch and Nanchang Branch participated in alarm, online music, vehicle-mounted WiFi, one-button navigation, and traffic the propaganda and service activity organized by the Provincial Administration peccancy inquiry, but also can receive voice commands for control, enabling of Industry and Commerce and the Association of Consumers on consumers’ the car owner to enjoy new driving experience safely and conveniently in the rights and interests to answer users’ questions on site and handling their information era. At present, the system has been applied to SouEast DX7 and complaints. V5 models. In Anhui, the responsible people at various levels of Wuhu Branch attended the morning meeting of the business outlets, analyzed and processed hot service problems together with outlet staff; received customers, and provided consulting services to them; and went out to the street to conduct service activities under the unified organization of local Association of Consumers.

SouEast Auto DX 7 off the production line in 2015

SEMI-II intelligent vehicle system provides high IQ to DX7.

——Shang Yunpeng, Deputy Manager of Corporate Department of South East (Fujian) Motor Corp., Ltd. On March 15, 2015, General Manager Gu Kaihong (second from right) of Wuhu Branch in Anhui was receiving a customer and answering to his consulted questions at Beijing West Road outlet. Protect Customers’ Rights and Interests 【12315 Consumer Rights Protection Service Station】

China Telecom seriously put into practice new Consumer Rights and Yunnan Branch and the local Administration of Industry and Commerce Interests Law and other laws and regulations related with customers’ rights and jointly established “12315 Consumer Rights Protection Service Stations” to co- build a “co-construction, co-governance and sharing” satisfactory consuming interests, conducted compliance review of ads and publicity in this respect, environment. The 288 stations are distributed in 158 Telecom direct-service strengthened customer information protection and tariff management, took outlets and 130 branch companies, and equipped with over 860 working staff, active measures to deal with spam messages and malware to effectively protect responsible for dealing with complaints dispatched by 12315 hotline and customers’ rights and interests. rights protection cases that cannot be handled by local complaining treatment centers. Publicize and Implement Consumer Rights and Interests Law

In 2015, the Company encouraged Telecom companies at various levels to be close to users by seriously conducting activities such as “GM reception Day”, “Staff Experience Day”, “Listening 10000 Hotline and Learning About Customers’ Opinions”; continued the publicity and implementation of the new Consumer Rights and Interests Law to clear users’ complaining channels and improve services based on users’ suggestions; strengthened tariff management A “12315 Consumer Rights Protection Service Station” in Lijiang and timely responded to and dealt with problems reported by customers and

focused by the media such as unknown value-added service fee, super high The establishment of “12315 Consumer Rights Protection Service 4G data traffic usage, high international roaming fees, etc., and organized Stations” fully shows the determination of China Telecom in actively responding feature analysis and self-examination and rectification to effectively reduce tariff to consumers’ appeals and complaints and trying to protect their rights and disputes. It also enhanced the monitoring and processing of user-concerned interests. problems such as value-added services and new services. With all these actions, the timely worksheet-processing ratio against Group-level e-channel ——Zhang Rongming, Director General of Yunnan Administration of complaints surpassed 95%. Industry & Commerce

36 China Telecom Protect User Information

Chin Telecom keeps improving its user information protection system by earnestly following and implementing “Decision on Strengthening Network Information Protection” by the Standing Committee of the National People’s Congress, and “Personal Information Protection Regulations for Telecom and Internet Users” by the Ministry of Industry and Information Technology, together with relevant feedback. In 2015, the Company developed and completed “China Telecom Information Security Management Methods” to strengthen security control of links including user information, system access, information operation and batch information usage, duly handle various emergencies, so as to protect users’ personal information.

Improve Service Capabilities

Taking customer satisfaction as the guidance, China Telecom continues improving its service capability. In the evaluation conducted by MIIT in 2015, China Telecom still led the industry in terms of mobile network and fixed network using satisfaction.

China Telecom Customer Satisfaction DigitalServe Society

Index Unit 2013 2014 2015 Industrial Rank

Fixed network customer satisfaction Point 70.8 71.9 71.3 1

Mobile network customer satisfaction Point 72.9 76.7 76.9 1

Fixed-line phone customer satisfaction Point 79.2 78.5 78.8 3

Mobile phone customer satisfaction for voice service Point 78.5 77.8 78.1 2

Source: Ministry of Industry and Information Technology

China Telecom Customer Complaints

Index Unit 2013 2014 2015 Industrial Level 2015

Complaint quantity Piece 1628 1307 1632 1632~2760

Person-time/1 million Customer complaint rate 5 3 3.7 3.2~3.7 users

Note: above values are the monthly average data collected by MIIT; the statistical caliber is the quantity collected and counted by MIIT Complaint Center and the quantities of all provincial Communications Administration.

Improve Basic Service Capabilities

In respect of wired broadband service, China Telecom carried out broadband port-to-port speed improvement work in 2015, and promoted self-help broadband troubleshooting service. Broadband “installation before Payment” service was promoted in 14 provinces (autonomous regions, municipalities directly under the central government) including Yunnan and Fujian; some provincial companies like Sichuan Branch and Zhejiang Branch obtained “Internet + Installation & Maintenance” service experiences. In respect of mobile services, it carried out “Experiencing Services to Further Improve Capabilities” activity in terms of 4G services, by focusing on five aspects: network experience, product & business, channel service, terminal service and customer care, and completing service details, trying to provide users with excellent 4G services featuring in good network perception, sweeter businesses, more convenient channels, more featured terminals, and more thoughtful care. In respect of basic services, it carried out credit management innovation, enabled customized service alert in the new media channel, optimized the intensive complaint processing procedures, and improved the handling capability of intensive complaints.

In September 2015, China Telecom won the title of “Best 10 Units for National After-sale Service” at the 7th National After-sale Service Evaluation Conference and Summit Forum on Service Creating New Values, which was organized by China Foundation of Consumer Protection and China General Chamber of Commerce.

2015 CSR Report 37 【Installation before Payment】

In 2015, from the perspective of user perception, Yunnan Branch made an commitment of “Installation before Payment” for broadband service, changing the decision power from the hands of operators to that of users.

Four Specific Commitments of “Installation before Payment” Service

· Upgrade from “time-based” service to “reservation · Installation before payment, able to surf the Internet service”. once installation finished, and market experiences.

· Unconditionally receive and handle customers’ · Make compensation based on 10 yuan/hour/worksheet requirements and conduct other work as necessary. if an appointment was broken.

To install China Telecom broadband, I didn’t need to go out, just sat at home and waited, and did not pay until I was satisfied. It really saves my time and energy, and assures me.

——Peng Wanshun, resident of Baofeng Community, Tianyuan Township, Changning County, Yunnan Province

【Internet + Installation & Maintenance】

During the course of FTTH popularization, customers may face a lot of The average obstacle rate of Sichuan Branch optical network and IPTV new service problems in new installation, usage, and failure declaration. Since was down from 16.9% in January 2012 to 1.58% in December 2015, and the 2012, Sichuan Branch has started pilot “Internet + Optical Maintenance” to corresponding average customer satisfaction rate was up from 83% to 95%. provide timely and thoughtful whole-process services around customers’ core demands. On the basis of continuously summarizing lessons and experiences, 100% it was further promoted in the whole province in 2015. Average obstacle rate 75%

50% · During FTTH construction, intelligent port acceptance is realized to 16.9% guarantee accurate resource information will be provided when the 25% 1.58% customer apply for some businesses. 0% · During new optical network installation, with terminal zero- Jan. 2012 Dec. 2015 configuration, “plug and play” is realized, and quality verification of fiber transmission loss, Internet speed and IPTV are carried out. 95% · During customers’ using of the optical network, the Branch uses 100% 83% big data analysis to perform optical network intelligent diagnosis Average customer and active alarming to reduce the rate of breakdown. satisfaction rate 75%

50% · When the customer reports a failure, customer-self-help pre- treatment, No. 10000 automatic diagnosis and direct dispatch 25% of worksheet to relevant posts for treatment are realized; when 0% technicians are dealing with the failure on site, they can use Jan. 2012 Dec. 2015 a mobile app to make information inquiry, diagnosis and data recovery, effectively improving the solving efficiency.

Now, for most of the failures I can judge and handle them on site and don’t need to repeatedly communicate with the back-end like before, greatly improving service responding speed and maintenance quality.

——Yang Guang, staff of Nanchong Branch

38 China Telecom 【Listening to Users’ Opinions】 【Pilot Credit Service】

In 2015, the Call Center of Beijing Branch carried out an activity themed In 2015, China Telecom launched mobile communication service at “Listening to Users’ Opinions to Build Quality Services” by inviting 22 service users-oriented pilot credit service, to equip with preliminary credit supervisors to the 10000 hotline to listen to users’ opinions and suggestions, management capability and lay a foundation for the whole Group to thus helping to improve services. The business outlets opened a “Problem perform credit services in the next step. Reporting Area”, set up “hotlines and e-mails” for opinion and suggestion providing, and designated staff to handle the problems reported one by one, Through optimizing the grading and rating models as well as credit trying to make every user satisfied. granting solutions, Hunan Branch made risk identification more accurate and reduced the risk exposure by 53.4%. While guaranteeing decreased losses On December 4, 2015, Mr. Hao, a user of China Telecom mobile service, from credit arrearage, the Branch enlarged the credit granting coverage by 3%. called the Zhongguancun South Road Business Outlet of Beijing Branch that he was not in Beijing, his phone had been suspended for services, but it was not Yunnan Branch granted credit to 2.04 million prepaid users. Taking the convenient for him to pay the fees at that moment. Yet, he was in urgency to use data of September 2015 as an example, actually there were 816,000 users his own phone number to contact his family. So he hoped the business outlet used the granted credit quotas amounting to 11.34 million that month, and the could help him to pay the fees and he would return the money when he was times of user service suspension down from 1.01 million to 530,000. back. The staff there quickly paid 20 yuan on his behalf for his convenience to

contact his family. Mr. Hao returned the money and thanked the outlet when he DigitalServe Society was back.

Prepaid users received Used credit quota credit granting

(Unit: 10,000) (Unit: 10,000)

Tips What are the benefit of credit service to users?

Based on big data analysis, China Telecom provides valued credit service to users through accurate evaluation of their credit situations. When the account balance is not insufficient and it’s inconvenient to recharge, users with good credit, can overdraw certain amount of communications fees to prevent their phone services from being suspended. Such service also provides a buffer time for users to pay the fees, avoiding the inconvenience caused by service auto suspension when the charges are owed.

Customers’ Book in Beijing Branch Zhongguancun South Road business outlet

2015 CSR Report 39 Provide Special Services 【Helping the Elders to Use Smart Phones】

Many elder people desire to use smart phones, but they also feel China Telecom has provided special products and services to the elders, the phones are difficult to operate, such as turn on/off the built-in flashlight, the disabled, kids, ethnic minorities and other special groups. magnifier, and voice input. They always remember this step and forget the next one; hesitate a long time before press the button because they worry that they will not know how to restore the previous settings. In 2015, Guangxi Branch 【Serving Visually Disabled Users with Kindness】 required its business staff to help the elders select models, install software, when encountering the elders are buying smart phones, enabling them to The user of phone number 189****1777 in Jilin needed to change his/ use the phones expertly and experience the information smart life like young her package but it was not convenient for him/her to go to the business outlet people. as he/she is a visually disabled person. When Jilin Branch learned about that, it sent staff to the user’s home to help him/her. The user was so moved that he/ she said “I didn’t expect that” for three times in succession.

I just wanted to give a try and consulted. But I didn’t expect that China Telecom put such emphasis on it; I thought it was a petty thing, either doing it or not is both ok but I didn’t expect that China Telecom treated it as a big one; I planned to do it on the phone by my family but I didn’t expect that China Telecom would come to my home to handle the business.

——User of mobile phone number 189****1777

【Mongolian-Chinese Dual Language Smart Phone】

In 2012, Xilingol League Branch in Inner Mongolia Autonomous Region developed and released the first Mongolian-Chinese dual-language smart phone in China—“E-surfing`Jixiang”, which has a menu in Mongolian, can An employee of Guanyang Branch in Guilin was teaching an elder man how to use a smart phone. send and receive Mongolian messages, Mongolian weather forecast and other news and information concerned by the Mongolian siblings. During the My child gave me a smart cellphone, but I didn’t how to use. He/she past three years, it has received wide praise and favorable comments from taught me before but I forgot again. Now you help me write the steps down on the social communities. On January 21, 2015, the Branch won the “Advanced paper, when I forget, I will check it out before using the phone. Thank you! Group in Learning to Use the Mongolian Language in Xilingol League” title from Xilingol League Committee of Communist Party of China and Xilingol League ——Onsite speech from an old-aged user of Xinjie Township, Guanyang Administrative Office. County at a business outlet

New Mongolian-Chinese dual-language smart cellphone sold in 2015

With the Mongolian language-supported cellphone, I can receive the weather forecast written in Mongolian as well as receive and send short messages in Mongolian. It’s my good helper.

——Tubuqin Jirgel, a herdsman from Wenggen Gacha, Gaorihan Township, West Ujimqin Banner, Xilingol League

40 China Telecom Innovate Service Approaches

In combination with customers’ demands of Internet service, China Telecom keeps expanding and completing its online business outlet, mobile business outlet app, as well as Internet new social media (such as Weibo, WeChat, and Yixin)-based services, to make inquiry, payment and business processing easier to customers at any time and any place. By the end o 2015, users of China Telecom new media (Weibo, WeChat and Yixin)-based customer service system was over 200 million, where the monthly service amount surpassed 180 million times, up by more than 50% comparing with that of 2014. 67% of the services can be done online and the online service amount of simple services accounted for over 80% of the total. China Telecom’s new media-based services won several awards such as “The First Prize for Chinese Enterprises New Media Innovation Award 2015” by the SASAC of the State Council, “Top 10 Central Enterprises with the Most Influential New Media Accounts Award” and “China Corporate New Media Brand Innovation Award”.

【Online-Offline Integrated Services】

In 2015, Guangdong Branch energetically promoted the online (online business outlet or mobile business outlet app)-offline (physical business outlet) service integration to provide better service experience to customers. Serve DigitalServe Society Online, it offered broadband whole-process fine services, including broadband resource inquiry, installation and migration reservation, handling process inquiry, self-help troubleshooting, and payment, and served customers reaching 670,000 person-times. Before, after applying for broadband installation, the users had to call 10000 or go to a business outlet to learn about the handling progress; but now, they can conduct real-time inquiry via the online business outlet or the mobile business outlet app, and also book door-to-door service time by themselves.

Offline, in physical outlets, more than 6,000 service evaluating devices had been equipped to provide satisfaction instant evaluation function. Then the evaluation information and customer perception will be collected and analyzed in real time via the “cloud testing and evaluating” system for fast problem handling and service improvement. In 2015, with the help of such system, Guangdong Branch's physical outlet service satisfaction rate improved 5.8% year on year.

An Internet + coffee house co-built by Guangdong Branch and Xiangji Coffee in Fanyu District, Moreover, Guangdong Branch cooperated with Xiangji Coffee and co-built Guangzhou an “Internet +” experimental theme cafe in Fanyu District, Guangzhou, trying to provide a new service environment to customers. Before, I had to wait for phone notice after applying for broadband migration; now I can directly book migration time online, check the handling progress at any time. It’s very convenient.

——He Jianlan, Broadband user in Guangzhou

2015 CSR Report 41 CARE ABOUT EMPLOYEES' GROWTH

China Telecom always follows the principle people first, safeguards the rights and interests of its employees in accordance with the law, cares about its employees, attaches much attention to establish harmonious labor relations and constantly improves its employees’ working conditions. Besides, China Telecom also supports the Labor Union to perform its functions, encourages its employees to participate in enterprise management, actively helps its employees to enhance their abilities and expand their professional career, and strives to achieve the joint growth of the enterprise and its employees.

42 China Telecom Care about Employees’ Growth

Protect Employees’ Promote Employees’ Care about Rights and Employees’ Involvement in Employees’ Life Interests Development Management

Employees’ Growth Care about

Protect Employees’ Rights and Interests

China Telecom always strictly follows the laws and regulations related to labor and social security, implements employees’ labor rights and interests, democratic rights and interests, spiritual and cultural rights and interests in accordance with the law, adheres to the principles of gender equality, ethnic equality, equal pay for equal work and other employment policies, protects employees’ privacies in according to law and carries out the paid-leave system. Moreover, China Telecom also earnestly follows and implements the Labor Contract Law, ensures to sign labor contracts with contract employees, pay the social insurance and safeguard the rights and interests of dispatched employees and temporary workers, and continues to build an enterprise with harmonious labor relations.

Enterprises at all levels always actively support the Labor Union to perform its functions and carry out related work, and support the Labor Union to fully play its role in contacting with the employees, strengthening the democracy at the grassroots level, safeguarding employees’ legitimate rights and interests, promoting enterprise stability and other related aspects. Rules and regulations formulated in 2015, including Labor Union Job Evaluation Methods of China Telecom Group, Star Employee Family Selection Methods of China Telecom Group and Labor Union Funds Examination and Supervision Management (Interim) Measures of China Telecom Group, further strengthen the construction of the Labor Union.

Statistical Table of Labor Union Organization and Employees Joined the Labor Union

Index Unit 2013 2014 2015

Proportion of employees joined the ％ 98 98 98 Labor Union Number of grass-root Labor Union Number 2506 2176 2287 organizations Number of full-time Labor Union Person 1190 1190 1089 leaders

Promote Employees’ Development

China Telecom always continues to perfect the Dual-Channel Career Development System of parallel administrative and professional development, consummate the talent selection and appointment mechanism, strengthen employee training, carry out various forms of competitions and contests, encourage post innovations and help its employees to actively adapt to the transformation of industry and enterprise.

2015 CSR Report 43 Optimize Talent Selection and Training

Main Actions Taken for Talent Selection and Training in 2015

Domain Main actions

· Replenished reserve cadres for provincial companies. Democratically recommended principal reserve cadres. Adjusted and supplemented deputy reserve cadres. Leader selection · Promoted comprehensive evaluation of the leading group and leading personnel of provincial companies · Selected high-level IP talents. Implemented project training for open source software talents. Selected and cultivated talents in the using process. Expert selection · Perfected B-level talent management. Continued to recruit and select professional B-level talents in IP, IT, marketing, wireless and mobile services. Grass-roots employee · Continued to promote competitive selection of business hall manager, branch secretary and other "small CEO". selection

Carry out Employee Training

Main Actions Taken for Employee Training in 2015

Domain Main actions

· Carried out training programs for reserve cadres. Held 2 entrepreneur training camps and more than 130 reserve cadres Leader Training participated in this training

Operating and · Used online study and mobile study platform to organize and carry out online study activities for general managers of regional management personnel (city) branch offices, and promote the exchange and sharing of experience. training Grass-roots employee · Divided into small business accounting units and contract management reform based on grass-roots employees. Strengthened training “small CEO” training for grass-roots employees. The total number of online study employees was more than 12,000.

· 480,000 people of 12,220,000 person-times participated in China Telecom Online University Study and the total study duration Online study was up to 5,400,000 hours

【“Small CEO” Training】

After implementing the reform of dividing basic business units into small contracts, the enterprise has been given more responsibilities and management and administrative rights and put forward higher requirements for the ability of responsible persons (“small CEO”). Enterprises at all levels have strengthened “small CEO” training for grass-roots employees through various ways in 2015, organized and implemented various trainings including "small CEO" elite training camp and backbone cadre training camp, organized and carried out activities, including “Top 100 small CEOs on the platform” and "small CEO" online study, to help enhance the ability of "small CEO".

During April 16 to April 18,2015, the branches at Jiangxi and Anhui provinces jointly organized the On June 5, 2015, the branches at Suzhou City in Jiangsu Province held the signing ceremony of first phase of "small CEO" training in Jiujiang City. 60 "small CEOs" from the companies at these two "Small CEO Instructors" Helping Study Agreement and 40 instructors signed “Pairing” contracts with provinces received the training of building high performance team with coaching technology and 80"Small CEOs”. The instructors would give their students guidance and teach them tacit knowledge exchanged their work experience. in personnel management and team coordination as well as the methods of interaction with others, and help their students to enhance the comprehensive management and coordination ability.

44 China Telecom Encourage Post Innovations

In 2015, the activity of selecting “100 cases of top post innovations” was carried out to let employees share, comment and reproduce the post innovations with the aid of “two 100” Platform (the platform of "Caring About Employees’ 100 Practical Things" and "100 Cases of Post Innovations"). As a result, 4889 cases of post innovations were received in this activity. The person-time of participants was over 13,200,000 and the employees’ monthly active rate was up to 48%.

Enterprises at all levels further played the leading roles of labor models and experts in post innovations, and vigorously promoted the construction of scientific and technological innovation organization with labor models and experts as the core to lead employees to study all kinds of knowledge and carry out post innovations. By the end of 2015, the whole group established more than 50 “Labor Model Innovation Studios”, of which two studios were named by the All-China Federation of Trade Unions and 16 ones were named by Provincial Federation of Trade Unions. These “Labor Model Innovation Studios” played increasingly important role in promoting enterprise innovation.

【The Most Beautiful Communication Men】

On September 24, 2015, the first session of Awards Ceremony for “10 Most Beautiful Communication Men”, specifically presented by People’s Post and Telecommunication News under the guidance of the Ministry of Industry and Information Technology and the organization of China Association of Communications Enterprises, was held. At the Awards Ceremony, Xu Jun, Yang Chunze and Wang Xiaofeng from China Telecom and Sichuan Mobile Communication Bureau were awarded with the title of “10 Most Beautiful Communication Men”. They not only were the advanced models of promoting

socialist core values and the core values of communication industry, but also Employees’ Growth Care about the advanced models of post innovation.

Overseas communication market is very promising. I will make active dedication for the development of overseas business with full enthusiasm.

——Wang Xiaofeng, Deputy General Manager of Zhejiang Provincial Telecommunications Engineering Construction Co., Ltd. (in Saudi Arabia) of China Communication Service

【Guan Jianzhong Feiyang Labor Model Studio】

Zhejiang Branch established Guan Jianzhong Feiyang Labor Model Studio named after the Labor Model of central enterprise and this studio is composed of a group of young employees (the generation after 80s and My partners and I will continue to focus on the front line of installation and 90s) active in the front line of Internet product operation. They strive to be the maintenance to be good communication craftsmen. operation team with the most fighting capacity, most appealing power and most innovative consciousness, and have successively innovated and launched ——Xu Jun, Integrated Maintenance Engineer, Network Operation and traffic housekeeper, wan-ku, vschuang, big data finance and other series of Maintenance Center of Jing’an Branch in the west district of Shanghai Branch products, tutored and assisted 27 project teams to enter the “nursery garden” of CT-Venture to carry out the project incubation, of which 2 projects have incubated into enterprises. After several years of efforts, this innovation studio has constructed an integrated traffic management system, big data product system, Internet service product system and iTV product system in Zhejiang Branch, and was rated as “Provincial Innovation Studio” by Zhejiang Provincial Federation of Trade Unions.

My partners and I struggle forward and grow together at our work positions and the Innovation Studio.

——Yang Chunze, Deputy Director of Government and Enterprise Client On November 15, 2015, the members of "Guan Jianzhong Feiyang Labor Model Studio" were Support Center of Nanjing Branch in Jiangsu Province conducting the "brainstorming".

2015 CSR Report 45 【Song Hui Network Optimization Innovation Studio】

The mobile network often emerges the phenomenon of uneven free/busy status. If the network resources are reasonably arranged by “dismantling the free status to supply the busy status”, user services will be guaranteed under the circumstances of increasing no investment or less investment to improve the use efficiency of existing network resources. Xinjiang Branch has established “Song Hui Network Optimization Innovation Studio” named after the B-level expert of the Group with a view to explore the establishment of a mobile network early warning platform so as to support big data analysis and realize the normalization of data analysis of “dismantling the free status to supply the busy status”. Meanwhile, several mechanisms, including free/busy resources assessment and multi-dimensional network performance evaluation, were established to gradually form the working procedure of normalized arrangement for “dismantling the free status to supply the busy status” and realize the objective of revitalizing free network resources and accurately "supplying the busy status". In December 2015, its innovation result, Enhancing

the Operational Efficiency of Assets Depending on the Mobile Network Early Warning Platform, was On March 24, 2015, the team of "Song Hui Network awarded with the Third Prize for Scientific and Technological Progress by the Communications Institute of Optimization Innovation Studio" was carrying out technical Xinjiang Uygur Autonomous Region. discussion activities.

Carry out Labor and Skill Competitions

In 2015, more than 60 labor and skill competitions were carried out and over 1,000,000 employees participated in these activities. Labor and skill competition activities combined employees’ business learning and skill training to promote the improvement of employees’ overall quality and technical level, meanwhile identified and trained technological and innovative talents.

employees won the collectives were awarded the honorary titles employees won the honorary titles of National honorary title of National of National May Day Female Model Posts and May Day Female Models and National Female Labor Models National Female Civilization Posts Achievement Models

collectives won the employees won the title employees won the title of title of National Worker of National Technical Central Enterprise Technical Vanguards Experts Experts

employees won employees won the titles of Group Female Style - Excellent the title of Group Channel Managers and Store Managers Technical Experts

On November 16, 2015, China Telecommunications Corporation, together with National Defense On November 6, 2015, the Group Company held the second session of China Telecom “i Create” Posts and Telecommunications Trade Union, jointly organized 4G Network Maintenance Employee Dark Horse Contest Final. Nearly 160 Internet application projects recommended by 23 units Skill Competition. A total of 5035 employees of the Group participate in this activity and 6 competitors participated in the contest, and 30 employees won the title of "Excellent Product Managers". were awarded the title of “Technical Experts of China Telecom Group”.

46 China Telecom Employees’ Involvement in Management

Enterprises at all levels always carry out communication and exchange activities between employees and enterprise leaders, implement the Workers’ Congress, transparent factory affairs and democratic management system, and actively encourage employees to participate in enterprise management.

Statistical Table of Employees Participated in Management

Index Unit 2013 2014 2015

The workers’ Congress (Provincial) Number 58 58 58

Proposals received from employees’ representatives Number 1521 1266 1450

Inspection visit of employees’ representatives Time 550 420 456

Dialogue and communication between employees’ Time 98 71 82 representatives and leaders

Training for employees’ representatives Time 50 42 41

Smooth Expression of Demands

China Telecom always attaches great importance to understand its employees’ ideological, working and living conditions through various approaches, Employees’ Growth Care about channels and directions. In 2015, China Telecom formulated and issued the Notice on Perfecting Employees’ Demands Closed-Loop Management System; continued to construct the “Two 100” platform of "Caring About Employees’ 100 Practical Things" and "100 Cases of Post Innovations" (more than 550,000 employees participated in this platform and released more than 200,000 topics of 2,680,000 pieces of comments on the Internet, which has become “Employees’ Online Home”); and carried out the survey activity of “2015, Speak Out Your Wishes”. Enterprises at all levels always make deep understanding of the needs of employees and give timely responses and disposals to employees’ demands.

China Telecom Employees’ Demands Expression Mechanism

Channel Form

Democratic management · The Workers’ Congress, Democratic Appraisal Meeting, Transparent Factory Affairs, Reasonable Suggestions, etc.

· Communication Meeting, General Manger Reception Day, General Manger Mailbox, General Manger Hotline, Contact at Fixed Dialog Point, Employees’ Forum, Internet Microblog, etc.

Survey · The “Two 100” Platform, special survey of employees’ opinions, etc.

Letters and visits · Employees’ letters, emails, faxes, calls, visits, etc.

【Employees’ Communication Platform】

In 2015, Hainan Branch established the system of Employees’ Communication Platform. City (county) branch companies released post requirement information in the platform and employees put forward post demand information. The enterprise and its employees made "two-way interactions" and established the communication bridge for post flow, which provided new opportunities and channels for employees to display their talents. The platform released more than 60 jobs in this year, including 36posts for Department Manager, Branch Secretary and other management positions, and 30 employees achieved post flow through the platform.

I didn't know which positions were in demand of talents and which posts I could apply before. Now, Employees’ Communication Platform not only allows employees and the demand units choose what they need, but also let them know their disparities and striving directions through the job description.

——Dong Zhimin, employee of the Enterprise Informatization Department of Hainan Branch

Demands information from the Employees’ Communication Platform of Hainan Branch

2015 CSR Report 47 Perfect the Labor Union and Workers’ Congress System

In 2015, China Telecom continued to promote the specification to carry out democratic management of the Workers’ Congress of enterprises at all levels.

Workers’ Congress of provincial Special Committee (Group) Conferences companies of provincial Workers’ Congress

times times

Joint Conference of Team Provincial employee representative Leaders of provincial Employees’ inspection visit Delegation

times times

No. 10000 Innovation Achievement Exhibition Field of Beijing Company

of provincial companies successively established and % perfected the “five-system” management of employee Transparent Enterprise representative Management

Enterprises at all levels always make use of the electronic public column, Reasonable Suggestion text message, mail, forum, microblog and other forms of channels to make timely disclosure of relevant information and implement the employees’ rights to Enterprises at all levels mobilize employees to contribute ideas and know, participate and supervise. exert efforts for the difficulties and problems encountered in production and management, and actively promote reasonable suggestions. 【Normalization of Transparent Enterprise Management】

The branch in Jiangmen City of Guangdong Province has strengthened 【"Suggestions for Post Micro-Innovation" Activity】 the leadership on enterprise management in recent years. It constantly improved its work system and made strict control of the management system In 2015, to further enhance its customer service capability, No. 10000 to stride intoinstitutionalization and normalization. Transparent enterprise customer service staff of Beijing Branch carried out "Suggestions for Post management was implemented in place, which effectively promoted enterprise Micro-Innovation" activity and established “The Best ideas for Micro-Innovation” development. In August 2015, the Implementing Standards for transparent information collection system platform for all staff to collect good ideas in enterprise management and democratic management of the branch in improving customer perception, one-time settlement rate, operational efficiency, Jiangmen City passed the A-level certification with a score of 95, and became creation of happy team and other aspects. The manager of No. 10000 led the the first unit in Jiangmen City that passed the certification for transparent factory management team to make monthly concentrated discussion of these ideas one affairs and democratic management of Guangdong province. by one and designated the responsible person on site to make related replies one by one, work out related measures, post public announcements and put implementation in place. During the whole year, 376 pieces of good ideas were collected and 258 were adopted, which effectively promoted the improvement of service level.

In order to make better service for more and more users going abroad, I put forward several suggestions for consolidating the knowledge points of “Rules and System Operation to Switch International Long Distance Roaming Function”. In that month, the "business experts" clearly displayed the knowledge points in conducting channels, turn-on conditions, turn-on ways and specific rules in tabular form. Our knowledgebase is getting better and better. On August 27, 2015, Jiangmen Branch received the Certificate for Guangdong Provincial Transparent ——Yang Jinhong, No. 10000 customer service representative of Beijing Factory Affairs and Democratic Management Certification Body issued by Jiangmen Municipal Federation of Trade Unions. Branch

48 China Telecom Transparent enterprise management enhanced our employees’ sense Safety and Health Management of masters, promoted enterprise’s democratic management and created harmonious and stable soft environment for driving the enterprise enter into the In 2015, the safety production management system was further fast traffic lane of operation and development. consummated and "Safety Production Management Measures of China

——Lin Jinhua, Manager of Baishi Marketing Center of the Branch in Telecom Group" was formulated to make further implementation of enterprise’s Pengjiang District of Jiangmen City main responsibility for safety production and strengthen the enterprise’s safety production long-term mechanism. Enterprises at all levels carried out safety education in teams and groups, implemented the responsibilities for Care about Employees’ Life grassroots positions and strengthened responsibility assessment. Besides, enterprises at all levels continued to carry out safety production supervision Enterprises at all levels always actively improve the working and living and inspection and selectively inspected 20 provincial companies as well as conditions of grass-roots employees, carry out mental health assistance and the China Communication Service Company to rectify the hidden troubles in support project, give financial help to disadvantaged employees and the a timely manner. Moreover, emergency plan for accidents was perfected and special groups, animate employees’ spiritual and cultural life, and care about emergency plan drill was strengthened. The employees’ thousand-person retired people. responsibility death rate was 0.004 and employees’ thousand-person serious injury rate was 0.008. Improve the Working and Living The Company always faithfully implements the occupational health Conditions of Grass-roots Employees management system, regularly organizes physical examination for employees, exerts great efforts to improve employees’ operating environment and operating Enterprises at all levels always exert great efforts to solve the conditions and effectively eliminates the occurrence of occupational diseases. practical difficulties in the working life of grass-roots employees. In 2015, In addition, the Company also actively carries out EAP and other counseling enterprises at all levels continued to deepen the "4 small" (small canteen, activities and assistance related to mental health to help employees reduce small bathroom, small toilet and small activity room) construction, and pressure, and more than 110,000 person-times online and offline services were Employees’ Growth Care about 1900 grass-roots units completed the new construction of "4 small" task. provided within the year. By the end of the year, nearly 20,000 grass-roots units solved the front-line employees’ practical difficulties and problems in dining, activity and rest through the construction of small canteen, being equipped with microwave ovens, eating together, meal deliver service and other methods, and the resolution rate of solving the front-line employees’ dining needs reached up to 90%.

【Improve the Facilities of Business Department through "4 Small" Construction】

In 2015, the branch in Anqing City of Anhui Province actively raised the construction funds to solve the problems including the lackof"4 small" facilities in grassroots business offices and employees’ poor production and living conditions. By the end of the year, 6 city business departments and 33 rural business departments completed the "4 small" construction. On September 24, 2015, Fujian Fujitsu Communication Software Co., Ltd. in Fujian province held “Accompanying Health Series Lectures” and invited Dr. Luo Qinglu, from Fujian University of Traditional Chinese Medicine to give lectures on the knowledge to prevent cervical spine and lumbar diseases.

A corner of the kitchen of Fan Gang Business Department (in Tongcheng City) of Anqing Branch

The environment of the business department has received all-round improvement. Employees can wash with hot water and eat hot food after work at ordinary times. Every corner is permeated with happy home atmosphere, which promotes the home companion of the business department as a team. The superior and subordinate relationship between employees has been diluted, The branch in Qinzhou City, Guangxi Zhuang Autonomous Region, established the spiritual de- which increased the space for exchange and learning. pressure room equipped with massage chairs, fitness equipment, electronic sphygmomanometer and other equipment for its employees to help them release pressure and maintain physical and mental ——Huang Jian, "Small CEO" of Fan Gang Business Department in health. Tongcheng City of Anqing

2015 CSR Report 49 Give Employees Heartfelt Condolences and Aids

The Company has established the normalization mechanism to give employees heartfelt condolences and help the employees suffered serious disasters through special poverty relief funds. During the year, Group leaders and Labor Union Department went deep into the grass-roots frontlines in 26 provinces (autonomous regions and municipalities directly under the central government) and made more than 2600 person-times of heartfelt condolences to disadvantaged employees and excellent employees. Provincial companies (in autonomous regions and municipalities directly under the central government) made more than 210,000 person- times of heartfelt condolences to front-line employees and helped needy employees for more than 13,000 person-times.

Statistical table of giving employees heartfelt condolences and aids

Index Unit 2013 2014 2015

Person-times received condolences from Heart- Person- 162700 141000 212000 warming activities time 10,000 Investment in condolence funds 6118 6700 7084 yuan Number of provincial companies established special Number 31 31 31 funds to help disadvantaged employees

【Deliver Warmth to Employees】

Du Yanling, the Customer Manager of Wuda Marketing Center of the branch in Wuhai I must overcome the disease and get recovered City in Inner Mongolia Autonomous Region, suffered from uremia and the surgery cost was soon so that I can return to work and make due very expensive. Her family had spent all their savings and even borrowed much money for her contribution to the Branch. treatment. The whole family was in extreme difficulty. In March 2015, the branch in Wuhai City sent out a proposal to all employees and called on them to give a helping hand. Employees of ——Du Yanling, Customer Manager of Wuda the Branch and social caring people made active contributions and more than 60,000 yuan was Marketing Center of the branch in Wuhai City raised to help Du Yanling with her treatment.

Balance Employees’ Work and Life

Enterprises at all levels always carry out various cultural and sports activities that employees love to hear and see to enrich their life, relieve their pressure, motivate the team’s morale and enhance the team’s cohesive force.

In January 2015, the employee team of Hainan Branch participated in “Fuli Haikou Marathon Contest” In January 2015, Hunan Branch held the Appraisal and Selection Activity for “E-surfing Spring Festival” – Employees’ Spring Festival Couplet Calligraphy Contest

During May to July 2015, Jilin Branch held Balloon Volleyball League Match In October 2015, the branch in Nanning City, Guangxi Zhuang Autonomous Region, held an "E-surfing Kitchen God" competition

50 China Telecom Highlight: Care about Female Employees

China Telecom has 133,000 female employees, accounting for 32% of the total number of employees. "China Telecom Group Labor Protection Measures for Female Employees" was enacted in 2005. In order to implement national labor protection provisions for female employees in recent years meanwhile taking price adjustments, new business development and the changes of positions and work types into consideration, the Group Company amended Labor Protection Measures for Female Employees in 2015 to strengthen the safety and health protection for female employees.

Main New Measures Amended in China Telecom Group Labor Protection Measures for Female Employees

Standardize and protect female employees’ maternity leave Improve health fee standard Establish “Mommy Room” in units with more female employees

【Warm Mommy Room】 Employees’ Growth Care about

According to the special needs of female employees, many branch companies have successively set the Warm Mommy Room equipped with microwave oven, refrigerator, storage cabinet for breast suckling bag and other facilities. Warm Mommy Room not only became private place for breast-feeding mothers to prepare milk, but also the rest place for menstrual and pregnant employees, which improved female employees’ sense of happiness. By the end of 2015, the whole group has been built more than 280 Warm Mommy Rooms.

The Mommy Room of Ao-Feng Flagship Store of the branch in Xuancheng City, Anhui Province The Mommy Room of No. 10000 Customer Service Center of Qinghai Branch

Walking into the "Warm Mommy Room", the warm and simple indoor The first working day after delivery, I walked into the warm room. Warm arrangement, various kinds of available household items and the relaxing and sunshine stayed on my face and gently touched my cheek like my mother's comfortable environment, all of them let us feel the feeling of home in spare hand, which brought me endless happiness. time. ——Yan Chengying, an employee of Customer Service Center —— Wang Jun, an employee of Sales Service

2015 CSR Report 51 FULFILL GREEN DEVELOPMENT

China Telecom always takes the task of protecting the environment and building beautiful China as an important responsibility. It thoroughly boosts green management, green procurement, green operation and management and green office, carries out various green public welfare activities, exerts great efforts to realize its green development and contributes to economic and social green development.

52 China Telecom Fulfill Green Development

Green Green Green Green Green Management Procurement Operation Office Activities

Green Management

China Telecom always implements the green management of interconnected "planning - budget - assessment”. Under the circumstance of rapidly growing total business volume, the comprehensive energy consumption in 2015 was only increased by 3.3% than the last year. The excessive growth of total energy consumption was effectively controlled. The comprehensive energy consumption per unit information flow was decreased by 25.1% compared with that of the

previous year and the annual electricity saved was up to about 780 million kilowatt hours. Development Fulfill Green

Measures Taken to Promote Green Management in 2015

Domain Green management measures

· Compiled the rolling planning for energy saving and emission reduction; Untangled the current status of energy consumption; Carried out industrial benchmarking; Tap the potential of energy saving; Put forward the following work Planning arrangements, including small division of energy consumption plan, energy consumption monitoring, old equipment retreat, contract energy management, optimization for infrastructure configuration, green data center construction, etc. · About 260 million yuan was arranged for the direct investment in ancillary infrastructure, energy saving and technical Budget renovation.

· Developed annual control objective for total comprehensive energy consumption; Broke the indicators down into Assessment enterprises at all levels and incorporated them into the business performance assessment of responsible persons at all levels.

· Continued to promote small division of energy consumption plan and promoted precise management of energy consumption;

· Made comprehensive promotion of contract energy management. Made use of external funds of 250 million yuan. Saved the electricity of 110 million kilowatt hours; Management innovation · Promoted the improvement of air condition temperature setting in machine rooms of mobile base stations. About 340 thousand base stations realized the temperature increase to 28-centigrade degrees or 30-centigrade degrees, accounting for 62.5% of the total number of the whole network base station. Annually saved the electricity of 120 million kilowatt hours. · Actively participated in the exchanges with the industry association. The companies in 10 provinces, including Beijing and Anhui (autonomous regions and municipalities directly under the central government), were commended by China Training and exchange Communication Industry Association with the title of “2014-2015 Annual Advanced Units for Energy Saving Technology Innovation of Communication Industry”.

2015 CSR Report 53 Highlight: Promote Precise Management of Energy Consumption

Precise management of energy consumption is the basis for energy saving and emission reduction. In 2015, combined with the reform of dividing basic business units into small accounting units, China Telecom made further integration and optimization of the energy consumption monitoring system, perfected energy consumption monitoring measures, strengthened energy consumption monitoring and measurement, improved the precision of actual energy consumption data, eliminated the blind area in energy consumption supervision, completely eradicated the “leakage” in energy consumption and laid better foundation for carrying out targeted energy saving and consumption reduction in key energy consumption units.

Examples of Measures Taken by Provincial Companies to Promote Precise Management of Energy Consumption

Provincial company Concrete measures Effect

· Developed the energy consumption operating · Realized 1% of annual energy saving under the same condition and the system based on large data analysis (Power emission reduction was equivalent to over 2700 tons of standard coal. Operation Architecture, hereinafter referred to as Guangdong “POA platform”), equipped with the comprehensive · Saved the costs for energy consumption data acquisition and system management capabilities of data acquisition, data investment. It’s expected to save 20% of the comprehensive construction cost processing, energy consumption model, energy of each acquisition point and the investment of about 18 million yuan was consumption prediction and assessment control. saved in the whole province. · Simplified the difficulty of intelligent measuring and monitoring project to · Researched and developed the next generation of achieve the “plug and play” of ammeter. Simplified the configuration to greatly energy consumption monitoring and management enhance the working efficiency of ammeter configuration. system and made use of the Internet of things · Improved the availability of basic data. Effectively supported and promoted and big data technology to efficiently master the Zhejiang the management ability of energy saving plans and energy saving technology information of energy consumption monitoring points, improvement project evaluations. Greatly enhanced the working efficiency of realize energy consumption behavior analysis and energy saving reimbursements, reports and statistics. fully support energy consumption budget and other control functions. · Reduced40% of the costs for the single point engineering of monitoring points. · Facilitated the Internet data center machine rooms in the whole province to save the annual electricity consumption of about 14 million kilowatt hours and the emission reduction was equivalent to more than 1700 tons of standard coals. · Set up provincial centralized small division of energy consumption accounting management platform. · Facilitated 19,000 D-class bureau stations in the whole province to save the Jiangsu Promoted the data exchanges of the small division annual electricity consumption of about 13 million kilowatt hours and the accounting platform with the financial system, human emission reduction was equivalent to about 1600 tons of standard coals. resources system and procurement system. · Supported A, B and C-class bureau stations to implement small division energy consumption. More than 12 million kilowatt hours of annual electricity consumption were saved and the emission reduction was equivalent to over 1200 tons of standard coals.

Previously, the energy consumption data was mainly extracted from the original energy management system and the financial cost management system. The granularity of energy consumption data was very big, and the working efficiency of energy consumption data analysis and prediction was pretty low. Now, the energy consumption data of Internet data center is directly drawn from the energy consumption operating system (POA) platform and the information is clear at a glance. POA platform can make automatic analysis of the data collected and generate various energy consumption reports. We can intuitively understand the consumption structure of the Internet data center, predict the energy consumption trend, find the “leakage” problem in advance, apply energy consumption management to each energy-using node and enhance the energy-using quality.

——Mei Yunbo, Energy Saving and Emission Reduction Director of Network Development The management interface of the energy consumption operating Department of Guangdong Branch system platform of Guangdong Branch

54 China Telecom Green Procurement

In 2015, China Telecom continued to deepen green procurement, expanded the scope of investigation on quality inspection and suppliers and made evaluation inspection of more than 640 suppliers, AOG inspection of more than 460 suppliers and on-site inspection of 70 suppliers. Moreover, China Telecom expanded the scope of post evaluation and evaluated more than 620 suppliers, an increase of 21.2% on year-on-year basis. In addition, China Telecom promoted suppliers to improve quality and reduce energy consumption through closed-loop management of procurement. During the year, the capacity and energy consumption of six major professional units such as mobile communication equipment and air conditioner in machine room was decreased by 7.1% and the decline degree was increased by 0.5% on year-on-year basis.

【Promote the Application of Energy Saving Products】 Boost Green Reverse Logistics

Air conditioning energy consumption accounts for a large proportion of the energy consumption of communication stations. In various types of facilities The Group Company continued to promote the recycle, refurbishment, in communication stations, storage battery is very sensitive to the temperature. replacement and sales of wasted copper cable, storage battery, fixed network If the upper temperature limit of storage battery is elevated, the requirements terminal, network retreat equipment and other supplies, and passed the gains of communication stations for environmental temperature would be reduced, of 1.51 billion yuan from the disposal of reverse logistics within the year. which would reduce the operating time of air conditioners and correspondingly reduce the energy consumption. Combined with the development of battery technology market, China Telecom completed the whole group's first centralized 【Terminal Recycle and Reuse】 procurement of high temperature lead-acid storage battery in November China Telecom continued to strengthen the recycle and reuse of 2015. After the use of this product, the air conditioning energy consumption of terminal equipment, perfect the financial incentive mechanism, encourage communication stations was reduced by 50% to the maximum extent. the companies in different provinces (autonomous regions and municipalities directly under the central government) to allocate and reuse old terminals. 【Green Procurement of Air Conditioners in Communication During the whole year, more than 2,200,000 terminals were recycled and Machine Rooms】 reused, which effectively saved the material input and created the benefits of about 200 million yuan. In 2015, China Telecom enlarged the investigation on green environmental protection, and energy saving and emission reduction during the centralized procurement of air conditioners for communication machine rooms, and 【Old for New Service】 promoted the mainstream manufacturers to make an average decrease of more than 15% of their unit capacity energy consumption. Zhejiang Branch actively played the role of store, signed contracts

with store to provide free evaluation for old mobile phones and “Old for New Development Fulfill Green Service”. The recycled old mobile phones were uniformly processed by the · Before the evaluation, links for on-site investigation and inspection units specialized in the environmental protection decomposition of electronic evaluation of suppliers were increased to make on-site inspection products so as to reduce the waste and pollution caused by discarded old of suppliers’ environmental protection management system mobile phones. In 2015, Zhejiang Branch signed contracts with a total of more certification, green environmental protection facilities in the than 3100 stores and recycled 78,000 old mobile phones. production process and the recycling and processing measures for waste materials and substandard goods so as to promote the suppliers’ green development.

· During the evaluation stage, suppliers’ investigation and inspection conditions were included in the evaluation system. Energy consumption ratio, sensible heat ratio and other indexes of energy saving and emission reduction were given detailed appraisal through comparison to promote the shortlisted products’ energy saving and emission reduction level.

In October 2015, China Telecom made an investigation trip to Shenzhen Andaxin Communication Equipment Co., Ltd.

2015 CSR Report 55 Green Operation

China Telecom always promotes the construction of new greener generation of optical network, and implements network retreat or transformation to the old equipment of high energy consumption and low efficiency. Besides, China Telecom vigorously boosts the construction and application of electronic channels and steadily elevates the amount of electronic channel services. By the end of December 2015,electronic channel loading service transaction projects accounted for 66.5% of the Company’s total service projects. The transaction amount of electronic channel loading services in December reached up to 1,550 million times, accounting for 83.2% of the total channel services and becoming the main service channel.

Green Operation Indexes of China Telecom

Index Unit 2013 2014 2015 Notes

Base stations’ power consumption Kwh/carrier The total internal power consumption of base stations/the number of 1534 1375 1137 per carrier frequency frequency carrier frequency

Coverage rate of energy saving Number of base stations applied the energy saving technology/the total % 52.3 58.4 61.7 technology in base stations number of communication base stations

Coverage rate of energy saving Number of communication machine rooms applied the energy saving technology in communication % 35.9 40.2 56.6 technology/the total number of communication machine rooms machine rooms

Attach much Attention to Environmental Protection in Network Construction

China Telecom’s Environmental Protection Actions in Network Construction

Subjects concerned by Our actions the public

· Site selection for base stations shall give priority to original building and wasteland without new occupation of arable Farmland protection land.

· Equipment selection shall give priority to noiseless, electromagnetic-radiation-free and pollutant-free optical fibers and Equipment pollution cables and transmission system equipment.

· Field communication routing survey shall manage to avoid these areas including mineral reserves, forests, grasslands, wildlife, natural relics, cultural relics, nature reserves and scenic spots. Construction impact · Generally, laying optical cable shall use directional drilling technology and the optical cable can directly pass through from the bottom of obstacles without changing the surrounding environment.

· Carry out electromagnetic environment monitoring and assessment around base stations and accept the supervision of the public.

· Strengthen communications with communities and respect their opinions. Electromagnetic radiation · Strictly control the quality of network-accessing equipment and impose strict control from source. · Actively adopt advanced technology and elaborate the layout of base station so that the electromagnetic radiation indicators are lower than national standards.

56 China Telecom 【Green Engineering Management】

Hunan Provincial Communications Construction Co., Ltd., subordinate to China Communication Service Co., Ltd., integrated the concept of green environmental protection into the whole process of engineering design, construction, operation, handover and maintenance and applied new technologies, new equipment and scientific methods to make continuous exploration and practice of green project management.

Concept leading · Propagate and implement the construction idea of "safety, quality, efficiency and environmental protection”. Earnestly make Overall planning excellent engineering progress target decomposition and good arrangement of resources at all links to reduce the waste of and coordination resources.

Dynamic control · Rely on the integrated business management system and other information technologies to implement dynamic control of Fine management the whole engineering process. Strengthen the entity construction and team management of the construction team and other operation levels in accordance with the engineering project standardization management system.

Implement · Attach equal emphasis on “safety, quality, progress and environmental protection”. Strengthen the implementation of responsibilities engineering project management and procedures from all directions and multiple angles. Organize related construction in strict Strict rewards and accordance with approved construction design and implement environmental protection measures into the whole process of punishment construction production. Enhance the management of the construction site with strict rewards and responsibility investigation.

Active · For public concerns on electromagnetic radiation, noise and other issues, actively popularize the electromagnetic protection communications shielding standards for communication equipment and other health knowledge to masses around the site, select construction Response to machinery with low noise, reasonably arrange the construction time and prohibit night construction, which not only perfects the concerns network coverage, but also protects the environment and the public.

Currently, the concept of environmental protection has been gradually internalized into the conscious behaviors of employees. Project managers are striving to achieve scientific and effective management. Construction workers know how to protect the environment, save energy and reduce consumption. The company exerts great efforts to achieve good effects on engineering safety, quality assurance, resource saving and friendly environment. Development Fulfill Green

On March 20, 2015, the construction site of 4G supporting cable pipe-jacking engineering of the branch company (in Zhuzhou city) subordinate to Hunan Provincial Communication Construction Co., Ltd.

Infrastructure Co-construction and Sharing

In 2015, China Telecom continued to carry out communication China Telecom’s Infrastructure Co-construction and Sharing in 2015 infrastructure co-construction and sharing with communication operators, promote the communication infrastructure co- Co- Sharing construction and sharing in transportation, scenic spots and Category Unit construction Provided parks, large buildings and other places so as to reduce repeated construction, protect the natural environment and landscape Pole line Route kilometer 3955 19828 and save the consumption of land, energy and raw materials. Besides, China Telecom also exerted great efforts to promote Pipe line Route kilometer 7256 1943 the co-construction and sharing of base stations and complete Indoor the work to inject iron tower assets into China Tower. Moreover, Set 5341 459 distribution China Telecom successful completed the evaluation indicators for the Company’s co-construction and sharing of communication infrastructure by the Department of Industry and Informatization the State Council and SASAC. During the whole year, co- construction and sharing saved the investment of about 2 billion yuan (the data excluded corresponding investment saved by the contract-to-construct station sites of China Tower).

2015 CSR Report 57 Energy Saving and Emission Reduction in Network Operation

In 2015, China Telecom continued to eliminate inefficient backward production capacity of high energy consumption and vigorously promoted the network retreat of old traditional fixed-network long-distance switching equipment, local end office and transmission equipment. During the whole year, the eliminated backward production capacity saved about 400 million kilowatt hours of electricity.

Achievements Created by Promoting the Network Quitting of Old Equipment in 2015

Traditional fixed network (TDM), including 66 31 provinces (autonomous regions and First-class main lines’ 69 sets Revitalized196,000 square long-distance toll offices, 1,598 end offices, municipalities directly under central of old wavelength division and meters of communication 35.12 million line ports’ network quitting. 100 government) and 299 prefectural cities SDH transmission system quit local network realized “zero end office” completed the quitting of old data the network machine rooms communication network (DCN)

10,000 lines prefectural cities sets 10,000 sqm2

During the year, China Telecom continued to promote the technological transformation of energy-saving and emission reduction. Resource integration and cloudization were carried out for the business platform. As a result, independent platform was decreased by 19% and the cloudization rate was increased to 55%. Effective resource pool was established and the total amount of platforms newly incorporated into the cloud resource pool within the year was increased by 18% compared with the previous year.

Achievements Created by Network Operation Technology Transformation in 2015

240 sets of independent platforms More than 2,600 sets of More than 2,700 sets of switching More than 580 sets About 70 sets of high- were reduced; 336 sets of new offline intelligent ventilations power supply hibernation of voltage DC equipment platforms; 187 sets of platforms were technologies intelligent heat incorporated into the cloud resource pool exchange

sets sets sets sets sets

【Reduce Energy Consumption with Heat Pipe Backboard Refrigeration Technology】

Over the years, precise air conditioners have been used as the main heat dissipation equipment for the machine rooms of Internet Data Center (IDC). But, there were the problems of dense machine rooms, local overheating and high air-conditioning energy consumption, etc. In order to reduce the electric energy consumption for the refrigeration of machine rooms, Jiangsu Branch explored the heat pipe backboard refrigeration technology and applied it into the machine rooms of Internet Data Center, which effectively reduced the energy consumption. Machine rooms No. 406 and No. 407 of Nanjing Taishan New Village Data Center saved 980, 000kwh electric energy after the application of heat pipe backboard system in 2015. Compared with the electricity-saving rate of 63.8% by using precise air conditioners, the value of Power Usage Effectiveness (PUE) was reduced to 1.22 after transformation from 1.66 before transformation.

How to reduce energy consumption with heat pipe backboard refrigeration technology? Tips

Heat pipe is a kind of heat transfer element that can realize heat transfer by relying on its internal working liquid phase transition. Common heat pipe consists of three parts and its main body is a closed metal pipe (pipe shell). There is a small amount of working medium (working liquid) and capillary structure (pipe core) in its internal cavity. The air and other clutters within the pipe must be excluded. Heat pipe can be divided into three sections, including the evaporation section, the adiabatic section and the condensation section. When the sub-cooled liquid attached on the pipe wall of the evaporation section is absorbing external heat, the liquid will be heated and vaporized, producing a kind of higher pressure, called vapor pressure. This vapor pressure is the motive power that makes the vapor flow to the condensation section (lower pressure). When the vapor flowing to the condensation section, latent heat will be released and condensed into liquid. Finally, this liquid will return to the evaporation section and form a cycle by using the capillary force supplied (the gravity for gravity-assisted heat pipe) by the heat pipe’s capillary structure.

The refrigerating cycle of traditional compressor usually uses the evaporator to absorb heat, the condenser to discharge heat and the compressor’s input power to realize the refrigerating cycle. So the energy consumption is very high. The refrigerating cycle of heat pipe uses the evaporation section to absorb heat, the adiabatic section to discharge heat and performs the refrigerating cycle through the gravity action of refrigerant’s capillary. Basically, heat transfer and refrigeration is realized with no energy-consuming element and low energy consumption.

58 China Telecom Green Office Green Activities

Enterprises at all levels always actively promote green office scheme and 【Riding around the City to Advocate "Low-Carbon Environmental advocate employees to consciously save electricity, water, oil, paper and pen. Protection"】

【Energy-saving Office】

Anhui Branch always enhances its employees’ energy-saving consciousness and has made several measures to save energy and reduce consumption by promoting the rational use of office air conditioners.

· Reasonably set the office air conditioning temperature and the indoor air conditioning temperature in summer shall be set to no less than 26℃ .

· Don’t use air conditioner in winter and when no one is in the room. Prohibit the use of air conditioner with open window.

On May 14, 2015, the branch in Baoding City (Hebei Province) formed a riding team of more than 40 · Advocate to not use the air conditioner for one hour every working people and rode about 30 kilometers in the urban streets to advocate "Low-Carbon Environmental day. Post warm tips like “Please close the door when the air Protection". conditioner is working” and “Please turn off the air conditioner half an hour in advance before you going off from work” on the office 【Spread Civilization In Scenic Spot】 door and the air conditioner switch to cultivate employees’ habits of green office.

· Strengthen the monitoring and inspection of temperature and humidity. Development Fulfill Green

On May 9, 2015, the Customer Service Department of the branch in Anqing City of Hebei Province, cooperating with Anqing Radio Station hotline 1584, invited 53 customers to pick up garbage in Energy saving tips of Lu'an Branch in Anhui Province Lingshan Stone Tree Scenic Spot and carry out the activity of "Spread Civilization In Scenic Spot".

Beijing Branch posted slogans at conspicuous spot of the office building to advocate more use of stairs and less use of the elevators.

Less use of the elevator and more exercise Climb the stairs 10 minutes a day and lose 5 bring fitness and energy saving kilograms of weight a year

Through various energy saving propaganda and proposals, energy saving and emission reduction has gone deeply into the hearts of employees and green office has become the habits and conscious action of employees.

——Wang Ying, Network Development Department of Anhui Branch

2015 CSR Report 59 AVIDLY IMPROVE SOCIAL WELFARE

China Telecom is always enthusiastic in participating in the undertakings for social welfare. The Company has established special donation management system and always follows the principles of “donate voluntarily, clear rights and responsibilities, do what your strength allows as well as be honest and faithful" to help the poor, aid Tibet and Xinjiang, give financial help to needy, disabled and disadvantaged people, support science, education, culture and health care, and spread civilized practices through the donations of money and materials, providing free services and other helpful forms. Besides, China Telecom always encourages its employees to carry forward the volunteer spirit and participate in various forms of volunteer service activities.

60 China Telecom Avidly Improve Social Welfare

Poverty Alleviation Help for Those Support Science, Extension of Encourage and Assistance for in Distress Education, Culture Civilization Volunteer Tibet and Xinjiang and Feeble and Health Care Services Conditions

2015 China Telecom’s Social Donations

4,506 million yuan

2,183 million yuan Social Welfare Avidly Improve

966 million yuan 873 million yuan 460 million yuan 24 million yuan

To fixed- To fixed-point To education To cultural Other Total social point poverty assistance career (assist the and sports donations donations alleviation areas impoverished undertakings areas students) Poverty Alleviation and Assistance for Tibet and Xinjiang

In 2015, China Telecom newly increased the counterpart assistance to Tianlin County in Guangxi Zhuang Autonomous Region on the basis of the counterpart assistance to Bianbar County in Tibet Autonomous Region, Yanyuan County and Muli County in Sichuan Province and Shufu County in Xinjiang Uygur Autonomous Region. During the whole year, the fund of 23.2 million yuan was implemented for poverty relief assistance and 3 poverty relief cadres were dispatched to assist 5 counties to carry out the aid projects of infrastructure, informatization, education and training, agriculture, health care, and science and technology, for improving local production and living conditions, helping local people increase their incomes and promoting local economic and social development.

2015 CSR Report 61 China Telecom’s Actions for Helping the Poor and Aiding Tibet and there were still more than 70 million poor rural people by the end of 2014. These Xinjiang in 2015 poor people are mainly gathered in the regions with harsh natural conditions. Specific to each of the poor families, their causes for poverty are various, including diseases, disability, lack of funds, knowledge and technical ability, etc.

· Invested the aid funds of 16.5 million yuan and implemented 14 Helping poor rural people to shake off poverty is an arduous task in completing projects for Bianbar County in Tibet Autonomous Region; the construction of a comprehensive well-off society. In view of the status quo of poor population, it’s necessary to use scientific and effective procedures · Invested the aid funds of 2.6 million yuan and implemented 7 to implement precise identification, precise assistance and precise poverty- projects for Yanyuan County in Sichuan Province; eradication management for targeted poor population in accordance with the surroundings of different poor areas and the conditions of different poor farmers, · Invested the aid funds of 2.6 million yuan and implemented 7 projects for Yanyuan County in Sichuan Province; that is, implementing targeted poverty relief to achieve better results.

· Invested the aid funds of 1.5 million yuan and implemented 3 In 2015, China Telecom’ enterprises at all levels actively played the projects for Shufu County in Xinjiang Uygur Autonomous Region; advantages of communication network, big data, cloud computation and information application to assist local governments to implement targeted poverty · Dispatched titular cadres to make preliminary connection with Tianlin county in Guangxi Zhuang Autonomous Region; relief.

· Implemented public poverty relief funds of 1.2 million yuan and In Gansu Province, China Telecom assisted the provincial government to financially aided 400 impoverished students. build the big data management platform for targeted poverty relief so as to make dynamic management of the province's poor villages, poor families and poor population, and guarantee the implementation of poverty-relief measures related 【Safeguard the Interests of Farmers in Hail Suppression to the policy of different aids for different households. Meanwhile, China Telecom made positive response to Gansu Provincial Party committee’s call for the Operation Points】 action of “combining villages and households to make collective prosperity”, by

Yanyuan County in Sichuan Province is a large agricultural county. contacting with 66 poor villages and 693impoverished households, dispatching Located in plateau basin, it’s vulnerable to hail disasters. Due to financial 391 cadres to combine villages and households and investing 15.8 million yuan to difficulties, many hail suppression operation points in Yanyuan County are help the contacted poor villages and impoverished households through funding poorly constructed and in long neglected disrepair, and have become basic ewes, building bridges and roads, drawing water and constructing culture dilapidated houses. In recent years, with the rapid development of flue-cured square, etc. tobacco, apple, pepper and other industries, the existing hail suppression operation points can’t meet the needs of agricultural production. In 2015, China In Jiangxi Province, China Telecom researched and developed Telecom used the special poverty relief funds of 300, 000 yuan to make aided informatization product for “targeted poverty relief” and realized precise construction of Dongguan Village Shot Point in Weicheng Town of Yanyuan identification of poor households, precise management of establishing archives County. This Shot Point covers about 10 thousand mu of apple and pepper and cards, and precise control of pairing assistance. This product was also producing areas, thus can protect these areas from hail disasters, ensuring replicated and spread in Jiujiang, Yichun, Ji'an, Fuzhou and other places. In local farmers’ agricultural income of tens of millions of yuan for every year. Guangchang County of Fuzhou City, this product facilitated to realize the unified management of poverty relief work for more than 9, 500 poor households and more than 30, 000 poor people.

【Built the First Big Data Management Platform for Targeted Poverty Relief】

There are more than 5 million poor people in Gansu Province and they are distributed throughout the province; more than 60 poor counties in this area have received Gansu government’s powerful implementation of poverty relief. In 2015, Gansu Wanwei Information Technology Co., Ltd., a subsidiary of China Telecom, organized the construction of a professional team consisting of 70 people to help Gansu provincial government build the first big data Dongguan Village Hail Suppression Operation Point in Yanyuan County of Sichuan rovince, management platform for targeted poverty relief. This platform grasped the constructed under the aid of China Telecom in 2015. basic information of 6,220 poor villages, 1.01 million poor households, 4.17 million people living in poverty and 6.88 million pieces of industry measures in Gansu province, facilitated the realization of dynamic management of the whole Highlight: Support Targeted province's poor villages, poor households and poor population, and guaranteed the implementation of poverty-relief measures related to the policy of different Poverty Relief aids for different households. On September 10, 2015, Gansu Province was listed as the pilot province for national big data platform construction of the China has continued to carry out the poverty relief work for over 30 years National Poverty Relief Office, and became the province taking the lead in since the reform and opening up, and the poverty incidence has dropped to exploring the construction of big data management platform for targeted 7.2% in 2014 from the previous poverty incidence of more than 70%. However, poverty relief in the country.

62 China Telecom I hope that targeted poverty-relief work can be further enhanced through the management of large data platform.

——Liu Yongfu, Director of Poverty Relief Office of the State Council

The relief and assistance work team, sent by the government, has recorded our family's economic condition in a file and will apply for related poverty relief and assistance policy in accordance with this file to help my family develop the breeding industry.

——Zhang Zhiqiang, Dianzi Village, Erlang Town, Cheng County, Longnan On April 8, 2015, the then Governor of Gansu Province, Liu Weiping, watched the demonstration of City, Gansu Province Wanwei Targeted Poverty Relief Information System. Help for Those in Distress and Feeble Conditions

China Telecom always consciously gives financial aids to disabled people, disadvantaged children, disaster-afflicted victims and other related social groups to help them overcome their difficulties through various forms of assistance, including service and care, employment assistance, support goods, mobilizing employees to make donations and contributions. Besides, China Telecom actively meets the needs of disabled people for communication information services, continues to construct and perfect accessibility facilities to safeguard the services for disabled people, and carries out public welfare activities for disabled people.

【Tenacious Leader of Team No. 10000】 【Hearing Sunshine】

Yunnan Branch actively creates conditions to hire disabled people as In 2015, the Customer Service Department of Beijing Branch carried out the customer service representatives of customer service enter, encourages the "Hearing Sunshine" series of public welfare activities to care about disabled disabled people who are disadvantaged in body but firm in spirit and make people. continuous self-improvement to participate in the contracting and management of grass-roots management team, and supports the entrepreneurial Organized 18 volunteers to participate in the charity sale development of disabled people. Apr activity held in Longtan Lake Park by Beijing Sunshine Art Troupe Liu Dinglin, the leader of Team No. 10000, born in 1977, is one of the of Relatives and Friends of Mentally Disabled People to help raise representatives. Due to a fortuitous accident, Liu Dinglin was completely money and accompany mentally disabled patients. paralyzed and lost the ability to take care of himself. With indomitable will, Organized 11 volunteers to assist the Cultural Festival Show he adhered to treatment and rehabilitation training, and managed to walk July Rehearsal of Beijing Sunshine Art Troupe of Relatives and Friends and act with one hand. In 2011, Yunnan Branch provided the chance for his of Mentally Disabled People in the Activity Room of China Braille employment. Through hard training, he was able to use one hand to operate Library. the keyboard and was officially hired as telephone operator No. 10000. He worked hard and made outstanding performance. Under the encouragement Organized 8 volunteers to go to the office of One-Plus- and support of the unit, he became the leader of Team No. 10000 of Customer Aug. One (Beijing) Disabled People Cultural Development Center in Service Center in February 2015. Xiluoyuan Neighborhood in Fengtai District of Beijing City to assist Social Welfare Avidly Improve disabled people move their houses. He pursued and realized his dream step by step and overcame physical disability with his actions to be a useful person for the society and Organized 4 volunteers to serve as on-site volunteers the enterprise. As the leader of the team, he led his team to make positive, Oct. responsible for on-site guidance, escalator escort and referee for progressive, proactive and courageous performance to provide personalized National Braille Contest. services for customers and was awarded with title of “Advanced Individual for Disabled Grass-roots Employees” for 5 consecutive years. In 2015, he won the first prize in the selective tryout for large and medium-sized enterprises in the 10th session of Yunnan Provincial “Songs of Red Land” Speech Contest, and was also recommended as one of the first “Top 10 Figures Inspiring Yunnan Branch”.

In July 2015, the group photo of volunteers from the Customer Service Department of Beijing Branch were participating in the Cultural Festival Show of Art Troupe of Relatives and Friends of Mentally Disabled People in China Braille Library.

The picture of Liu Dinglin operating the keyboard with one hand

2015 CSR Report 63 【Tianyi Loving and Caring Bookroom】 【13 Consecutive Years of Voluntary Blood Donation】

Sandu Shui Autonomous County is located in the southeast of Qiannan Li Rongjun, an employee of the branch in Wenshan Zhuang and Miao Buyi and Miao Autonomous Prefecture in Guizhou Province with more than Autonomous Prefecture of Yunnan province, adhered to donate blood from 80% of left-behind children. On August 28, 2015, China Telecom Guizhou 2002 to 2015 and had donated 38, 200 ml of blood in 13 years, approximate to Branch office, together with the Information Integration Department of Provincial 10 times of the normal blood volume of an adult. He has won the Gold Award Party Committee General Office, contacted with Guangdong caring people for National Voluntary Blood Donation, jointly granted by China Red Cross to jointly participate in Tianyi Loving and Caring Bookroom program, sending Association and the Health Division of PLA General Logistics Department, school supplies and uniforms (worth over 120, 000 yuan) to more than 400 for three times, and was also recommended as one of the first “Kindest local minority children. This was the sixth Tianyi Loving and Caring Bookroom Communication Worker” in Yunnan Branch in 2015. established for poor mountainous areas in Guizhou province by China Telecom Guizhou Branch office, united with the love forces from all sectors of the community. In recent years, the bookroom program has delivered social warmth and care for nearly 10, 000 remote left-behind children through donations of books, computers, stationeries, sports facilities, school uniforms and other loving and caring supplies.

I participate in blood donation because there is a dream in my heart. I hope that one day, people will all be honest and helpful; parents will be amiable, children filial and the spouse relationship harmonious; the income will be increased steadily, the work will be happily done and I will be in good health; thus we can together make the society a place full of love.

On August 28, 2015, Tianyi Loving and Caring Bookroom was sending love and care to the left- ——Li Rongjun, an employee of the branch in Wenshan Zhuang and Miao behind children in Sandu Shui Autonomous County. Autonomous Prefecture of Yunnan province Support Science, Education, Extension of Civilization Culture and Health Care 【Children Walking into the Informatization Experience Hall】 【Support Rural Education in Tibetan Region】 On August 26, 2015, the branch in Jieyang city of Guangdong Province, Qinghai Branch has continued to care about and support the together with the Communist Youth League, Jieyang Municipal Committee and development of rural education in Tibetan region for years. In 2015, the branch Jieyang Municipal Television Station and other units, jointly held the activity of in Datong County of Xining city, hand in hand with the Xianghua Tibetan Town "My Chinese Dream, Colorful Youth Dream”, the sixth Jieyang Provincial Welfare Central School, jointly built the Rural School Children's Palace though various Lottery Summer Camp for Left-Behind Children in Guangdong Province, at supports of materials, talents and technologies. The branch in Datong County the “Smart Jieyang” Informatization Experience Hall of China Telecom. More regularly dispatched technical staff to school to teach the knowledge of Internet than 40 left-behind children visited and experienced Internet communication application, optimize school’s optical fiber circuit and make rural students have application technology. The employees of China Telecom made enthusiastic better Internet experience. and easy-to-understand explanation to stimulate the left-behind children's thirst for knowledge and opened a door to the new world for left-behind children.

On February 11, 2015, the branch in Huangnan Tibetan Autonomous Prefecture of Qinghai Province organized employees to hold “Loving and Caring Materials Donation for Winter" activity to raise money and clothes, and purchase loving and caring materials for the poor children of Resa Village of Left-behind children were carefully listening to the work staff introducing the knowledge of Huangnaihai Town of Tongren County. communication information.

64 China Telecom 【Loving and Caring Rest Stop】

In July 2015, Shanghai was in midsummer and the temperature continued to hit new highs. During that period, many sanitation workers, traffic police, traffic management assistants, city inspectors, couriers, postmen and utilities repair workers were still working in the open air. The Business Hall of Shanghai Branch initiatively placed hand-painted poster reading “Welcome traffic police, sanitation workers, city inspectors and other outdoor workers to come into the shop for rest and we supply free drinking water” at the door so as to provide cool and refreshing Loving and Caring Rest Stop for outdoor workers to take a rest.

Encourage Volunteer Services

In 2015, China Telecom continued to enrich and strengthen the volunteer team, issued and distributed the Notice on Strengthening the Construction of Voluntary Service Activities, to actively encourage and support volunteers to participate in social welfare activities.

【Pass on True Love and Warmth】 【Volunteers Made Splash-ink Painting to Send Blessings】

The loving and caring volunteers’ team from the substation of aluminum On January 18, 2015, the volunteers from the branch in Wujiang District plant of the branch in Qingtongxia City of Ningxia Hui Autonomous Region has of Suzhou City of Jiangsu Province, came to the New Century Cultural Square looked after an 83-year-old Hui woman from Tongxing Migrant Village named in Pingwang Town, a Rural Cultural Activity Center to make splash-ink paintings Lu Jinhua in all weathers for four consecutive years. The employees of the and send new year blessings to local farmers. substation have gone through several changes, but loving and caring volunteer services never stop.

The peasants of our village are the migrants from Tongxin County and all of us are Hui people. The employees of China Telecom have helped Grandma Lu Jinhua, who has physical disability and difficult family life, in all weathers for many years. They make us feel that the Han and Hui people are families.

——Neighbor of Grandma Lu Jinhua, Grandma Ma, from Tongxing Migrant Village in Qingtongxia Town of Qingtongxia City

China Telecom’s volunteers’ behavior not only made the Tongxing migrants Social Welfare Avidly Improve get along with others, but also guided them to learn new agricultural knowledge and look for jobs from the Internet, which enhanced their life confidence after migration.

——Ma Wen (Hui Nationality), the Secretary of Tongxing Migrant Village in Qingtongxia Town of Qingtongxia City

2015 CSR Report 65 CHINA TELECOM IN THE OVERSEAS MARKET

China Telecom serves its overseas customers through two subsidiaries - China Telecom Global Limited (China Telecom Global) and China Communications Services Corporation Limited (China Communications Services), which are dedicated to quality, efficient, comprehensive communications solutions and integrated information services for overseas customers.

For international operators, MNEs and such public customers as overseas Chinese, China Telecom Global Limited provides Internet access and transit, broadband, unified communications, cloud computing, ICT, fixed and mobile voice and value-added services, professional and industrial solutions, telecom operation consulting and service outsourcing. By the end of 2015, China Telecom Global has operations in 28 countries (and regions), 63 overseas PoPs, 9,000Gbps outgoing international Internet bandwidth and inter-continental capacity, assets in 33 submarine cables (of which more than 10 are jointly built by CTG with partners) and direct on-land connectivity with over 10 neighbors, forming a global layout of service outlets and network capacities.

China Communications Services Limited has three product and service lines - "Telecommunications Infrastructure Service (TIS)", "Business Process Outsourcing (BPO)" and "Application, Content and Others (ACO)" - which encompass ten disciplines including design, engineering, supervision, network maintenance, channel service, equipment management, IT applications, value-added voice and value-added Internet services. By the end of 2015, China Communications Services (Hong Kong) International Limited and China International Telecommunications Construction Corporation (CITCC), two wholly-owned subsidiaries of China Communications Services Limited, have established operations in 41 countries (and regions) and 6 countries (and regions) respectively to target customers in Asia-Pacific, Middle East, Africa and Latin America with professional, integrated and differentiated communications construction services.

Highlight: Engagement in the “Belt and Road” Initiative

Milestones in China Telecom Engagement in the “Belt and Road” 2015

· Jan 2015, System testing completed for China-Russia cross-border · Nov 2015, China Overseas Infrastructure Development and transfer section in Manzhouli together with its extended section, Investment Corporation inaugurated, with China Telecom Global opening another grand Asia-Europe information channel. as one of the founding shareholders to leverage its global network resources and operation expertise in incubating mature Feb 2015, After system engineering at the beginning of the year, · infrastructure projects that can be invested, financed and system testing also completed for extended section and Zhangmu performed through EPC for the “Belt and Road” initiative. port in China Telecom's China-Nepal project and ready for use, marking the fulfillment of bilateral business needs through "China- · Dec 2015, The 428-kilometer Malawi National Backbone completed, Nepal" direct transfer channel. which, after commercialization, will greatly raise broadband penetration in Malawi with reduced tariff and form a communication May 2015, China Telecom (Africa and Middle East) Limited · hub for neighboring regions. established in Mauritius to expand businesses and services in Africa and the Middle East. · Dec 2015, China-Africa Information and Communication Cooperation Forum held by China Communications Services, June 2015, MOU signed between China Telecom and Viettel of · MOU on Partnership Program for East Africa Communications Vietnam to launch high speed cross-border transfer and connectivity Infrastructure signed and "China-Africa Partnership Program for between Pingxiang in China and Langson in Vietnam for improved Africa Info-Highway" project launched with pilots in East Africa. service capacity in the Mekong Region.

The “Belt and Road” (Silk Road Economic Belt and 21st Century Maritime Silk Road) to better connect East Asia, Southeast Asia, Middle Asia, South Asia, West Asia and even Eurasia are helpful to improve economic and commercial environment in the region, facilitate orderly, free flow of elements with optimized allocation, speed up the development of inland countries and remote areas in countries concerned and forward socio-economic growth in the region.

66 China Telecom Under the principle of negotiation, partnership and sharing, China 【China-Africa Information and Communication Cooperation Telecom has conducted extensive cooperation, continued to deploy global Forum】 assets based on broadband networks and operation, lent active support to countries (and regions) along the “Belt and Road” in their ICT infrastructure On December 3rd, 2015, China-Africa Information and Communication projects, promoted network interconnectivity and bridged the "digital divide"; at Cooperation Forum, led by International Telecommunications Union (ITU), the same time, besides its comprehensive ICT portfolio ranging from consulting, organized by the Ministry of Industry and Information Technology of China and planning, construction to operation, it also provides industrial ICT solutions and sponsored by China Communications Services, was held in Johannesburg, assist in human resource development to serve local business and production South Arica. Around 150 representatives from governments, businesses and demands. research institutes attended the forum. China together with Tanzania, Burundi, Uganda, Rwanda and Kenya signed an MOU on Partnership Program for East Africa Information Infrastructure to official launch "China-Africa Partnership In 2015, China Telecom finished the China-Russia channel in Manzhouli, Program for Africa Info-Highway" with trials in East Africa. China-Nepal direct transfer channel, China-Vietnam cross-border transfer system and national fiber-optic backbone in Malawi and continued national backbone transfer network in (DR) Congo, Tanzania national ICT backbone and ICT projects in Saudi Arabia, Pakistan, UAE, Indonesia, Brunei and Gabon. China Telecom now has 40 international submarine/land cables that connect to 72 countries (and regions) as well as 10 IDCs and 5 industry parks in key regions that connect Chinese Internet to global Internet through five global traffic hubs and two information loops in south and north Africa; it also helped train more than 10,000 professionals for many countries (and regions).

Enhanced ICT cooperation between China and Africa is beneficial to Africa's transformation and well-being and we sincerely welcome China to engage in local development. ——Minister of Telecommunications and Postal Services of the Republic of South Africa H.E. Siyabonga Cwele

Serve Overseas Customers

In 2015, China Telecom Global launched a special campaign to improve service quality for better customer experience.

· Optimize time needed and capacity to activate on-sale businesses · Enhance customer visit and communication, develop "Service to better satisfy demands from global customers. Awareness List and Customer Interaction Template", raise front-end service efficiency.

· Enhance guarantee for inter-department Service-Level Agreement · Further integrate global customer hotline for global sharing of (SLA). services.

China Telecom Global has been awarded "World's Best Support Service (Communications)", "Best Comprehensive Support Team (Communications)" and ten Overseas Market China Telecom in the individual prizes for four years in a row.

Key Customer Service Indicators of China Telecom Global

Indicator Unit 2013 2014 2015

Timeliness to handle trouble tickets of global % 98.8 98.1 97.4 customers

Global Customer Satisfaction % 91.0 91.9 90.0

2015 CSR Report 67 In 2015, China Communications Services formulated Management of Overseas Business Units (Platforms) (Trial), Management of Overseas Business Subcontracting System, Management of Collaborative Overseas Business Subcontracting, Management of Overseas Production Safety and other policies in order to standardize overseas project management, enhance production safety, improve efficiency in using overseas resources during implementation and raise overseas customer satisfaction.

【Solve difficulties of overseas Chinese in online payment】 【Cross-border private line for better communication efficiency】

Due to differences of domestic credit card payment platform from foreign Yunnan Provincial Energy Investment Group Co., Ltd. (hereinafter shorted ones and difficulties for outgoing Chinese to get credibility verification from as “YEIG”) is an enterprise enaged in energy investment and management. local banks in a short period of time, it’s very inconvenient for overseas Chinese After setting up a branch in Hong Kong, there’s been lack of communication students, visitors, businessmen and immigrants to use online payment when between Yunan HQ and Hong Kong office due to the lack of cross-border abroad. network, thus creating management difficulties. Upon knowing that, China Telecom (Yunnan) offered “video conference + cross-border private line” In March 2015, China Telecom Global integrated “Paypal” payment into solution which built a prive dideo conference network for the HQ and its overseas mobile service platform, solving difficulties of overseas Chinese in subsidiary and created the “Kunming-Hong Kong” private line with low latency online payment. From March 7th, China Telecom CTExcelbiz users roaming in and high quality to guarantee smooth streaming. Now, YEIG HQ can notify its UK, France and Europe could top up mobile phone account with Paypal after Hong Kong office major decisions at the earliest time possible. log in on www.ctexcel.com while non-CTExcelbiz users could buy CTExcelbiz China Telecom cross-border private network has enabled us to SIM card with Paypal; overseas users could even use CTExcelbiz “Loyalty communicate and report major decisions face to face, which greatly improved Solution” to buy food, entertainment services and concert tickets and take part efficiency. in limited-time bulk purchase or special discount through Paypal.

——Xiao Xingquan, YEIG This innovative overseas payment service has proved to be effective for customers who “could not”, “felt it difficult to” or “dare not” pay online and improved payment experience overseas. Promote Sustainable

I never thought that I could use Paypal so easily and assured to shop Development online when I’m abroad. It’s been a great help for me when first came to a strange country and I’d like to thank China Telecom for such nice service. China Telecom prioritizes rights and interests of overseas staff with great attention paid to their development. In 2015, staff care was ——Miss Wang, just moved to London standardized as a policy to improve employee satisfaction and happiness at work. Considering global security landscape, China Telecom Global 【CTExcelTM in USA】 designed Management on Safety Protection of Overseas Operations and Staff of China Telecom Global (2015 revision) as further policy guarantee On May 8th, 2015, China Telecom (Americas) officially launched and guideline during emergencies; China Communications Services CTExcelTM mobile virtual network operation in USA, becoming the first Chinese improved its contingency plan and measures for overseas incidents with operator to provide mobile communications services in USA under its own Contingency Plan for Overseas Emergencies of China Communications brand. Chinese people who visit or live in USA can access 4G LTE and other Services and established mechanisms for the HQ and its operations stable networks for daily communications, information inquiry and entertainment to jointly cope with emergencies in order to better protect its overseas with more convenience, which facilitates China-USA communication. staff. Overseas operations of China Telecom all stick to the policy of employment localization and the number of non-mainland Chinese It’s a pleasure to see long-term stable business development of China employees totaled 2,800 in 2015. Telecom in North America and this mobile service will facilitate communication between China and the US. China Telecom enhanced communication with local people with active engagement to contribute to local socio-economic growth. ——Stephen Cheung, special representative of L.A. Major & President of World Trade Center L.A.

68 China Telecom 【Nurture Talents】 【Full Participation in Nepal Earthquake Rescue】

In 2015, China Telecom Global expanded its “Internship Program” On April 25th, 2015, Nepal was hit by an 8.1-magnitude earthquake. Staff to Hong Kong HQ, Europe and Americas operations for both local and of CCS Nepal, who were having lunch as usual, adopted self-rescue measures international students, which enabled interns to gain experience as talent pool immediately, evacuated outside and activated overseas contingency plan. and also raised its employer image and reputation in local labor market. Those staff did all they could to protect their own safety while at the same time took active part in rescue efforts against constant aftershock. The Africa and Middle East office of China Telecom Global has been active in recruiting local talents based on applicable labor laws and market demands. In 2015, 3 local staff were recruited in South Africa and Kenya, who ·help contact airlines to were offered online training, on-site instruction and HQ study opportunities so sendback home the injured they could improve service capacity and be better engaged at work. Chinese, including women mountain-climbing team · Coordinate to recover network communication for Chinese Embassy in Nepal to guarantee orderly commanding for efficient rescue work by China ·Leverage CT resources to inspect and restore base stations, rescue people and recover materials,do best to offer communications services Interns of China Telecom (Americas) 2015

My internship with China Telecom Global at the Network and Product Development Department equipped me with industry-leading product technologies and ideas and was very helpful in understanding how operators 【Support to Education】 do businesses. In Jan 2015, CITCC Nigeria under CCS donated stationery and sports —— Duan Junyuan, student of University of Hong Kong facilities to Falamo High School in Lagos, Nigeria.

In March 2015, China Telecom Global worked with IVE Hong Kong in 【Donate Saplings of Love】 the “China Telecom Global Scholarship” to fund two IVE selected students to continue study. On January 31st, 2015, Urban Environment Management Office of Bekasi, West Java Province, Indonesia and CCS (Indonesia) launched the “Earth, Our In July 2015, China Telecom South Africa took part in a volunteer activity Common Home” campaign with donation of saplings. CCS (Indonesia) donated to help Atteridgeville Primary School in Tshwane paint classroom walls, 346 saplings as part of its endeavor to protect the environment, which also clean the campus, plant trees and deliver food for a better study and living raised staff awareness of eco-friendliness and social responsibility. environment.

I’d like to thank China Telecom volunteers for their dedication and warmth brought to the kids. I hope such spirit can be passed on.

——Cllr Kgosientso Ramokgopa, Major of Tshwane Overseas Market China Telecom in the

2015 CSR Report 69 PROMOTE RESPONSIBILITY MANAGEMENT

China Telecom takes sustainability as its direction in constant improvement of social responsibility management and active fulfillment of its obligations toward stakeholders to keep on the track of responsible development.

70 China Telecom Promote Responsibility Management

Responsibility Responsibility Responsibility Responsibility Responsibility Law Observation Strategy Governance Performance Capacity Communication and Compliance

Responsibility Strategy

China Telecom makes active efforts to echo the government’s call to build a moderately prosperous society and adapt to such major trends as economic transformation and upgrading, supply-side reform and digitalized information services. Centering on “creating strong network power, leading digital ecosystem, serving the society and people’s wellbeing” and other core responsibilities, China Telecom has deepened its transformation and reform, promoted smart network, green business and intelligent operation and expedited capacity sharing and open cooperation to grow into a leading operator of integrated smart information services with leap-frog progress in comprehensive strength, breakthroughs in core capacity and new SOE responsibilities.

Responsibility management

Continue improving

value Build a nation with powerful network al Re ent sp m to on a ility sh si nd sib are bi u n h lity F po ol s d

e e r society digital Serve r s

R t o y y e t t i i A leading operator l c s i

n u p b i

u s o

s

t

n

o

m n of integrated

s

m

o

i

m

b

p

e

o

i

s welfare l

i

r

t

C y s

e smart information

r

serrvices

Avidly improve social E nv ir ility re o ib

n Management Promote Responsibility s m ns s po e po e n nta es ye si l R lo bilit mp Fulfill green developmenty to e

growth Care about employees’

Sustainable development

2015 CSR Report 71 Basic · As a national operator, China Telecom has natural responsibilities in basic networks, new communications facilities, responsibility universal service, cyber security, emergency communication, technology innovation and industry development. It acts as a backbone in building network power and contributes to socio-economic development.

Responsibility to · Shareholders are investors of the Company. China Telecom maintains sound operation to fulfill its comments to shareholders shareholders with good business performance and constantly growing business value.

Responsibility to · Customers are the foundation for businesses to grow. China Telecom treats its customers with care, protects their rights customers and interests, understands their demands and innovates products and services for customers to fully enjoy their digital life.

Responsibility to · Staff is valuable resource to businesses. China Telecom safeguards staff rights and interests by law, promote staff staff development, encourage staff to participate in management of the Company and pay attention to their daily life so they can grow together with the Company.

Responsibility to · Green development is a common mission of all humans. Through green management, procurement, operation, office the environment and social activities, China Telecom promotes green growth of itself which in turn contributes to green society and economy.

Social welfare · A loving heart makes better society. China Telecom repays the society with many undertakings for social welfare. responsibility

Responsibility Governance

China Telecom Group and its provincial/specialized companies form a two-tier hierarchy in social responsibility. Under the leadership of China Telecom Group management team, Corporate Strategy Department acts as social responsibity office with governance power while departments of the Group designate coordinators for social responsibilities. Beijing Research Institute provides support in studies. Provincial/Specialized companies identify leading departments to manage social responsibility with working teams. Corporate Strategy Information Network of the Group builds IT platform to collect and share relevant working information.

China Telecom Social Responsibility Management Hierarchy

CT Group Dept. CSR coordinator Specialized company coordinators CT Group CT Group Provincial management CSR office company coordination teams BRI Overseas research coordinators team

72 China Telecom China Telecom incorporates social responsibility management into its strategy management, annual work plan and performance evaluation and assessment, forming a close-loop management framework. In 2015, special tasks were carried out including “two innovations”, Broadbank China, Speed Upgrade and Tariff Reduction, “Internet +”, cyber security and joint construction and sharing of communications infrastructure.

China Telecom CSR management framework

1 Socio-economic development Corporate Work deployment Policies, laws strategy CSR deployment 2 CSR plan

Stakeholder appeals 3 Performance Implementation evaluation & CSR practices assessment

Communications with stakeholders

Responsibility Performance

China Telecom CSR indicators management system has KPIs in 6 aspects (see KPI Chart) and those indicators are applied in annual performance assessment of provincial companies.

China Telecom CSR indicator system

Basic responsibility Responsibility to customer Responsibility to environment

network coverage customer base. green procurement. network quality service quality Energy saving & emission reduction

maintain & grow asset staff protection. donation. Management Promote Responsibility value..profit staff development volunteering Responsibility to Responsibility to staff Social welfare shareholder responsibility

2015 CSR Report 73 In 2015, China Telecom was active in responding to the activity of China Association of Communications Enterprises (CACE) to summon practical CSR cases. China Telecom also carried out its own appraisal of CSR cases and individuals including 33 “China Telecom Group Best CSR Cases of the Year” (Internet + Water Management, etc.) and 5 “China Telecom Group Best CSR Management Personnel of the Year” (Qiu tao, etc.).

2015 China Telecom Group Best CSR Cases (partial list)

Area Case Name Submitter

Internet + Water Management Zhejiang Branch

Responsibility theme Tianyi Health Shaanxi Branch

“Green Account” for trash classification Shanghai Branch

Responsibility management Anti-Pirating Alliance for audio books E-surfing Reading Culture Communication Co.,Ltd.

Telephone access in Kalaunger village Xinjiang Branch Basic responsibility Earthquake rescue in Ludian Yunnan Branch

“Discipline Supervisors” invited to guide service Fujian Branch

Responsibility to customers Service card that speaks for itself Beijing Branch

Phones with ethinic characteristics Hainan Branch

Responsibility to staff “Warm House” project Jilin Branch

Responsibility to environment Green account book Guangdong Branch

Social welfare responsibility “Care on the Way” program E-surfing Mobile Terminals Co.,Ltd.

CT overseas (DR) Congo connected to the world CCS

2015 China Telecom Group Best CSR Management Personnel

Qiu Tao Zhang Honghua Xiao Junjie Zhang Jinhua Huang Dandan

from Guangdong Branch from Yunan Branch from Shanghai Branch from Beijing Branch from Guangxi Branch

Responsibility Capacity

In 2015, China Telecom, as member of drafting group for CSR standards in ICT sector, participated in studies and drafting of China CSR Management System for ICT Sector organized by CACE and in discussion with ICT organizations and businesses. Its Beijing Research Institute carried out studies and analysis on reader questionnaires on China Telecom CSR Report. CT Group sent backbone personnel to the Responsibility Sharing – China CSR Lecture training by CSR Research Center of Academic Division of Economics of China Academy of Social Sciences.

74 China Telecom Responsibility Communication

In 2015, China Telecom continued communication with key stakeholders including investors, customers, staff, regulators, governments, eco-system, industry peers and communities based on their interest and influence.

Stakeholder expectation and CT’s response

Stakeholder Communication method Expectation CT’s response

· regular/irregular report · maintain/grow asset value · improve governance and internal control · statements, visits · standard governance · stable operation, better profitability and Investor · BU’s daily communication · risk prevention shareholders’ rights and interests · investor meeting

·hotline · diverse ICT services · innovate products & services ·survey in service outlets · better service quality · transparent consumption ·visits by account · lower tariff · resonable discount Customer manager · prevention against unwanted · standard management on VAS partnership ·satisfaction survey info · protect customer info by law · privacy protection

· staff rep. congress · protected rights · better income distribution and welfare · F2F comm. with mgmt · career development · standard labor rules Staff · training · engage in mgmt · enhanced training · consultation · staff care · better work condition

· meetings · respect rules & laws · compliance Regulator · special reports · industry development · rational competition, protect market order · statements, visits · policy advice · active in advising

· meetings · abide by laws · manage by law with honesty · special reports · execute gov requirements · pay tax and create jobs Government · participate in gov programs · improve ICT level · ICT for new growth patterns · statements, visits · grow to create jobs

· business communication · mutual respect, equal · honesty for win-win operation Eco-system · business training cooperation · promote eco-sys development · workshops, forum · create value, expand areas

· forum, meetings · focus on trends and · active exchange of experience · dispute settlement opportunities · interconnectivity Peer · themed WGs · fair, legitimate competion · co-build and share · visits · cooperation

· community · protect environment · save energy, reduce emission and protect Management Promote Responsibility communication · universal service environment Community · joint activities · guarantee emergency · universal services, smooth communications · social communication · poverty reduction in Tibet and Xinjiang, welfare programs · assist those in need assistance provided to the fragile

2015 CSR Report 75 【Publish CSR Report】 【Industry Integrity and Rectification Instruction】

In 2015, CT published its CSR report for the 5th year in a row as an active On Nov 5th, 2015, CT received inspection by MIIT Industry Integrity and response to stakeholder expectations. The report disclosed details of CT’s CSR Rectification Supervision Team. The then President Yang Jie and Vice President ideas and measures as well as performance in 2014. It was rated “Five-Star Yang Xiaowei made reports on industry integrity and rectification work and Level” by Corporate CSR Research Center of Academic Division of Economics listened to instructions given by the Supervision Team. of CASS and awarded “Golden Bee CSR Report 2015 Leadership” by WTO Guide magazine.

MIIT Industry Integrity and Rectification Supervision Team listening to CT reports

CT adopts close-loop management for its CSR report. In 2015, 399 CSR reader questionnaires were collected and analyzed to understand readers’ view on the report and CT’s CSR fulfillment as well as their expectations and advices, providing reference for compiling 2015 report and deploying CSR work in 2016.

Abstract of analysis on reader feedbacks on China Telecom Group CSR Report 2014

Reporting by CT Group in 2015 concerning industry integrity and malbehavior rectification

· 98% acknowledged the report as a detailed, comprehensive, objective representation of CT’s fulfillment of its social responsibilities. We’ll set up rigorous standards, enhance accountability and further our efforts in rectifying industry behaviors. · Approved CSR fulfillment:

(1) Guarantee communication and promote industry development ——Yang Jie, Then President of CT Group (86%);

(2) Honest operation and compliance (76%);

(3) Protect consumer rights and create value for customers (58%).

· Room for improvement:

(1) Protect consumer rights and create value for customers (41%)

(2) Protect rights and interests of employees and promote their development (36%);

(3) Engage in social welfare undertakings (32%).

76 China Telecom Law Observation and Compliance

China Telecom manages itself by law. It adheres to honest operation by law, abides by applicable laws and regulations as well as commercial credibility rules and has established a compliance system across the entire operation regarding internal control, audit supervision, anti-corruption and full risk management. It has set up long-term communication mechanisms, standardized information disclosure and accepted government and public supervision. In 2015, based on laws and regulatory requirements as well as operation changes, CT continued to improve its own rules and policies; it performed investigation on enforcement and implementation and rectified identified problems in a timely manner.

Compliance Training

· Number of trainings 2,773 2,660 2,411

2013 2014 2015

· Personnel trained 287,110 233,332 239,258

2013 2014 2015

As a sales person, the legal cases learned in the training taught me to enhance legal awareness. When communicating with customers, promoting services and signing contracts, you shouldn’t make unreasonable commitments even if you want the order badly. Otherwise, you’ll not only lose customer trust but also bring default risk to the Company. This is what I and my fellows should remind each other of ten.

——Cheng Yang, Zhonglou BU of CT Hefei, Anhui Province Management Promote Responsibility

2015 CSR Report 77 Abide by Industry Regulations

In 2015, CT made proactive efforts to echo with requirements by the State Council and the Ministry of Industry and Information Technology (MIIT) to “upgrate speed and reduce tariff” through raising the speed and quality of 4G and broadband networks while lowering tariff for broadband and mobile traffic. CT implemented MIIT policies regarding open broadband access networks and mobile resale, facilitated cooperation with private businesses, improved interconnectivity architectures between direct nodes on the national Internet backbone and raised inter-operator Internet communication quality. As required by regulations, CT standardized market competitions of its subordinate operations to protect telecom market order.

Audit Supervision

In 2015, CT furthered “intensive, ICT-based and standard” auditing. With the aim to “prevent risks and grow values”, CT strengthened audit supervision in scope and depth, enhanced application of audit results and improved its risk control capacity.

· Strengthened centralized business management and resource Explored possible management audit with focus · scheduling for better results of intensive auditing. on Group strategy, implementation, corporate reform, emerging businesses and other strategic areas

· Further improved auditing risk system; based on economic · Enhanced auditing of key risk areas,carried out responsibility auditing and independent internal control over 400,000 auditing programs throughout the evalution, realized full audit coverage through financial income year, established mechainisms to rectify audit auditing; leveraged big data for risk scanning and audit ticketing to perform routine supervision of and early warning to key audit problems and cancel accounts,and operations, divisions and areas. enhanced accountability to ensure intended rectification

78 China Telecom Anti-Corruption

In 2015, anti-corruption efforts were furthered and proved to be effective.

· Collaborated with 12th CCPCC investigation team on China Telecom program with active rectification as required. Based on feedbacks of the investigation team, CT faced problems directly, facilitated all rectification tasks comprehensively and made particular efforts to treat and rectify key issues in recruitment, promotion and covert capital. Such inspection and rectification promoted CT’s anti-corruption understandings and raised awareness all across the Group.

· Disciplines were prioritized, reviews enhanced and enforcement seriously performed. CT carefully reviewed clues in letters and calls given by the investigation team and fought against violations such as interest transfer, improper promotion, covert capital and questionable decision. Such cases were used to enhance anti-corruption education and improve awareness of both executives and staff.

· Organize internal investigation for enhanced supervision. In 2015, CT Hunan, CT Jiangxi and CT Jilin were investigated to identify and rectify problems.

· Reform discipline review mechanisms and capacity building to improve supervision capability. Management Promote Responsibility

2015 CSR Report 79 AFTERWORD

About Us

China Telecommunications Corporation is an ultra-large communications operator in China. It has been ranked as a Fortune Global 500 company for many years in a row. It specializes in integrated information service including mobile telecom, Internet access & application, landline, satellite communication, ICT integration, etc. The conglomerate has total assets of 772.7 billion yuan and 630,000 employees in 2015.

Corporate Structure

China Telecommunications Corporation is owned by the central government and funded by the state. The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) fulfils responsibility as an investor on behalf of the state and dispatch a Board of Supervisors to the conglomerate.

The Conglomerate has set up Board of Directors as required by the SASAC. The Board of Directors is the highest decision-making agency within the conglomerate, having a Nomination Committee, an Auditing and Risk Management Committee as well as a Remuneration and Appraisal Committee under its umbrella.

China Telecommunications Corporation has operating organizations in 31 provinces (autonomous prefectures, municipalities directly under the Central Government), America, Europe, Hong Kong and Macao. The conglomerate controls 3 listed companies including China Telecom Corporation Limited, China’s Communication Service Co., Ltd. (China Communications Service) and Besttone Holding Co., Ltd.

80 China Telecom China Telecommunications Corporation

Headquarters’Departments (Office of the Board) General AffairsOffice (Legal Department) Corporate Strategy Department Marketing Department Human Resources Department Finance Department DevelopmentNetwork Department Capital Operation Department Department Customer Service Auditing Department Department) (Interconnecting and Interworking Regulatory AffairsDepartment Technology Department Department Management Sideline Industry Department Supervision Discipline Inspection and Department Party-masses Work China Telecom Labor Union Customer Department Governmental&Corporate Department Sales and Channel Expansion Department) (Information Security Innovative Business Department Maintenance Department Operation and Network Corporate IT Department Procurement Department

China Telecommunications Services China Telecom Corporation Ltd. Corporation Limited(China Branches in 31 provinces(autonomous regions Comservice) and municipallties) Best Tone Holding Co.,Ltd. Companies in 20 provinces (autonomous Best tone Information Services Co.,Ltd. regions and municipalities) China Telecom Satellite E-sur ng Mobile Terminals Co.,Ltd. China International Telecommunication Communications Co.,Ltd. Construction Corporation Xinyuan Public Information China Telecommunications Services Development Co.,Ltd. E-sur ng E-commerce Co.,Ltd. (Hong Kong)International Limited

E-sur ng Technology Venture Capital China Telecommunications Corporation China Telecommunications Services Co.,Ltd. System Integration Co.,Ltd. Application and Solution Technology Co.,Ltd.

China Telecom Global Limited E-sur ng Video&Media Co.,Ltd. China Data Com Corporation Limited China Telecom Corporation Limited Cloud Colorful Interactive Network Technology Computing Branch Co.,Ltd. E-sur ng IMusic Culture & Technology Co.,Ltd. E-sur ng Reading Culture Communication Co.,Ltd. China Telecom Corporation Limited Electronic Channel Operation Center E-sur ng Animation Culture & Media Co.,Ltd. Beijing/Shanghai/Guangzhou Research Institute

China Telecom College Brand Overview

China Telecom has set up a brand structure dominated by the corporate brand with a focus on E-Surfing.

2015 CSR Report 81 Table of Key Indicators

Essential Responsibilities 2013 2014 2015

Call drop rate of mobile communication (%) 0.29 0.28 0.26

Call completing rate of mobile communication 98.13 97.90 97.56 network (%)

Cities covered by 4GNetwork —— 56 343

Call completing rate for landline phones (%) 98.11 93.86 99.50

Packet loss rate of backbone network of broadband 0.28 0.12 0.09 Internet ChinaNet (%)

Broadband coverage rate in administrative villages in 84 85 87 21 southern provinces as main business areas (%)

Number of rural channel outlets (0,000) 26.7 25.4 28.8

R&D input as a percentage of income (%) 1.5 1.8 1.8

Number of R&D staff 1 5184 4426 23024

Number of new patent licensing 332 295 442

Total Tax Paid (hundred million yuan) 196.3 237.5 206.3

Number of people employed (10,000 yuan) 4.3 3.3 3.6

Labor productivity of employees (10,000 yuan/person 86.0 96.1 98.3 · year)

Responsibilities to Shareholders 2013 2014 2015

Total assets (hundred million yuan) 6739 7003 7727

Main business income (hundred million yuan) 3420 3486 3504

Ranking in Fortune Global 500 182 154 160

Total profit (hundred million yuan) 215 245 245

Asset-liability ratio (%) 32.1 32.4 38.0

Value-maintained and value-added rate of state- 103.0 104.9 106.0 owned assets (%)

Responsibilities to Customers 2013 2014 2015

Number of mobile phone users (million) 185.6 185.6 197.9

Of which: 3G/4G users ( million) 103.1 118.6 143.1

Number of users of landline phones ( million) 161.6 149.3 139.5

Number of cable broadband (million) 112. 9 121.4 132.1

Customer complaint rate ( per million users) 5.0 3.0 3.7

Degree of satisfaction of mobileInternet users(marks) 72.9 76.7 76.9

Degree of satisfaction of mobile voice users (marks) 78.5 77.8 78.1

Degree of satisfaction of fixed Internet access 70.8 71.9 71.3 (marks)

Degree of satisfaction of landline users (marks) 79.2 78.5 78.8

Note 1: “Number of R&D staff” for 2013 and 2014 include personnel for scientific research and development, while personnel from research institutes, design institutes, innovative units and industrial application bases are newly added for the 2015 data.

82 China Telecom Responsibilities to Employees 2013 2014 2015

Percentage of employees who are also members of 98 98 98 the trade union (%)

Ratio of male to female employees (male : female) 2.2:1 2.2:1 2.2:1

Percentage of ethnic minority employees (%) 5.0 6.0 5.0

Percentage of female managers (%) 14.8 14.8 19.0

Coverage of health and safety training (%) 87 88 90

Work-related injury and death 2 0 1

Per capita training time (hour/person) 43.0 50.7 42.8

Employee turnover rate (%) 6.4 5.1 5.3

Solatium investment (10,000 yuan) 6118 6700 7084

Environmental Responsibility 2013 2014 2015

Consumption of electric energy during operation 134.9 144.7 152.8 (hundred million kilowatt hour)

Electric energy saved (hundred million kilowatt hour) 10.8 8.0 7.8

Consumption of gasoline (10,000 tons) 14.3 13.3 12.2

Consumption of diesel (10,000 tons) 3.8 3.4 3.0

Consumption of natural gas (10,000 cubic meters 2417 2235 1779

Greenhouse gas emission during operation (10,000 536.9 560.8 579.1 tons) 2 Energy consumption per unit information flow(kg 19.0 15.0 11.2 standard coal/TB) Energy consumption per business volume( kg 61.3 52.3 43.5 standard coal/10,000 yuan) Investment in Energy Saving and Emission 4.0 2.8 2.6 Reduction (hundred million yuan) Number of person-timein training on energy saving 2041 2057 2103 and emission reduction

Percentage of green procurement(%) 73 76 78

Power consumption per carrier frequency at base 1534 1375 1137 station (kilowatt hour/carrier frequency) Coverage rate of energy-saving technologies at 52.3 58.4 61.7 base station (%) Coverage rate of energy-saving technologies at 35.9 40.2 56.6 communication equipment room (%) Public Responsibility 2013 2014 2015

Total social donation (10,000 yuan) 8334 7620 4506

Number of registered volunteers 9300 33265 35324

Number of person-time of volunteer activities 177665 58788 63650

Note 2: The conversion method of indicators for 2014 was adjusted, and comprehensive energy consumption was converted into greenhouse gas emission on the basis of greenhouse emission factor of comprehensive energy consumption.

2015 CSR Report 83 Main Honors

Award-Winning Body Honor Award-Granting Body

Level A Enterprise in Business Performance Evaluation of State-owned Asset Supervision and China Telecom Heads of Central Government Enterprises in 2014 Administration Commission of the State Council

The Best Corporate Social Responsibility, Best CEO, Best Corporate Governance Asia CFO, Best Investor Relations

Platinum Award of All-Round Prominent Enterprise The Asset

Best All-Round Management Company in Asia, No.1 Best Finance Asia CEO, No. 1 Best CFO China Telecom Corporation Limited Most Respected Enterprise in Asia, No.1 Best CEO of Telecom Industry in Asia, No.1 Best Investor Relation of Institutional Investors Telecom Industry in Asia

Best Large Management Company in China Asiamoney

Best Management Company in Asia, No.1 Best Management Euromoney Company in Asia’sTelecom Industry

Best Paragon of Corporate Governance in Asia Corporate Governance Asia

Best Corporate Governance of a Listed Company, China Ta Kung Pao in Hong Kong Securities Golden Bauhinia Award China’s Communication Best Company for Risk Control and Management Fortune (Chinese version) Service Co., Ltd. China International Telecommunication Construction China Africa Industrial Forum, China WTO Africa Corporation was shortlisted as“the 4thsession 100 Chinese Affairs Committee enterprises most worthy of recommending to Africa”

84 China Telecom Outlook

In 2016, China Telecom will carry out the following work to fulfill social Responsibilities to Employees:strengthen selection, cultivation and use of responsibility: various talent teams, improve career development mechanism for employees, strengthen training on new technologies, businesses and skills. Deepen reform Responsibility Management:The Company will continue promoting and of reduced size contracting and “inverted triangle” support systems. Continue implementing social responsibility, enhance awareness of social responsibility carrying out “Little CEO” capacity building project to facilitate entrepreneurial of management personnel and staff at all levels. It will carry out team training development of grassroots employees. Show concern to grassroots employees, on social responsibility and improve corporate management level of social especially frontline employees in remote and hardscrabble areas. Deepen responsibility. It will further improve system of social responsibility management democratic management of the Company and strengthen safe production and bringing the role of communication between CSR report and stakeholders management. into play and boost communication with stakeholders. It will continue appraising and selecting CSR cases, promote enterprises at all levels to exchange and Environmental Responsibility:Improve standards and methods for draw lessons from good CSR cases and innovate fulfillment practices. calculating “reduced energy consumption”, strengthen management and control of energy consumption, ensure constant reduction of comprehensive Essential Responsibility:Complete 4G network coverage and improve its energy consumption of unit information flow to make energy consumption quality. Enlarge construction of carrier aggregation base stations as required level closer to advanced levels at home and abroad. Strictly implement by customers to extend service coverage of “E-Surfing 4G+”. Promote fiber new construction standards of telecom infrastructures. Make full use of the optic reform of cable broadband network. Enlarge construction and coverage opportunity of network upgrade, strive to build green network of high energy of all optical network, newly build a batch of cities with all optical network while efficiency, continue promoting upgrade, transformation and withdrawals of continue improving access rate of cable broadband. Build new information old equipment with high energy consumption. Expand scales and areas facilities such as cloud computing, big data and Internet of Things according of application of energy performance contracting (EPC). Deepen green to a high standard, strive to provide leading products and services. Strengthen procurement to promote application of green evaluation index. Continue R&D in technological innovation and industrial cooperation to promote growth and products conducive to energy saving and emission reduction. prosperity of communication and information service industries. Strengthen support capacity of emergency communication and ensure communication Public Responsibility:Continue efforts in poverty alleviation, aiding security and support. Continue to implement rural communication project in Tibet and Xinjiang. Use information technology to facilitate targeted poverty natural villages, which have not been connected to improve rural informatization alleviation. Help the needy, the disabled and the weak. Support development of level. social causes in technology, education, culture, sanitation, etc.

Responsibilities to Customers:Provide premium 4G services to customers, promote convenient and feature applications based on 4Gsuch as Bestpay, enrich terminals with unique features. Continue improving quality of cable broadband services, provide high quality video applications such as “TV189” based on all optical network to expand smart family service. Continue promoting initiatives including “Mass Entrepreneurship and Innovation”, “Internet+ Government Affairs”, “Internet + Medical Care”, “Internet + Education”, “Internet+ Modern Agriculture”, “Internet + Industrial Manufacturing” to facilitate transformation and upgrade of traditional industries. Coordinate to improve service capabilities of various channels, overcome shortcomings according to customer feedbacks and improve service quality.

2015 CSR Report 85 Rating Report

Rating Report of 2015 China Telecom CSR Report

Commissioned by China Telecom, experts were selected by Chinese Expert Committee on CSR Report Rating to form a rating team and give a rating to 2015China Telecom CSR Report (hereafter “the report”).

I. Basis of Rating Comparability（★★★★★） The report discloses negative data and information including customer Guidelines for Preparation of CSR Reports in China (CASS-CSR 3.0) - complaint rate per million users, work-related injury and death, employee Telecom Industry and Rating Standard of CSR Reports in China (2014). turnover rate, responsibility death rate per thousand employees, call drop rate II. Process of Rating of mobile communication, etc. It has a leading balance performance. Readability 1. The process evaluation team interviewed key members of the report （★★★★★） preparation team and examined relevant materials for compilation on site. Themed “creating and enjoy smart future together”, the report describes 2. The rating team evaluated management of the compilation process 7 aspects including responsibility management, growth of employees, and contents disclosed, and drafted a rating report. green development, etc. It has a lucid structure, a clear logics and concise 3. The rating report was submitted to vice chairman of Chinese Expert expressions. Its cover and spread are designed with cartoons by incorporating Committee on CSR Report Rating and leader of the rating team to be signed. main businesses and responsibility practices and shows originality. “General Knowledge” columns are scattered in the report to explain terminologies, which III. Conclusion of Rating enhances readability of the report. Therefore, it has a good readability. Procedural Performance（★★★★☆） Originality（★★★★★） The Company’s Strategy Department set up a report preparation team, The report has several features including transformation and upgrade and the president and general managers were responsible for controlling key boosted by mass innovation and entrepreneurship, speed acceleration and points and reviewing the report. The compilation team identified stakeholders cost reduction, caring about female employees, etc. It expounds on bright and collected their opinions by opinion solicitation meetings, questionnaires spots of the Company in fulfilling its essential responsibilities and caring about and interviews. It identified substantial discussion topics according to major employees. It also colors and highlights quantitative data to facilitate reader’s events, relevant national policies, and investigation into stakeholders. It plans to understanding of the Company’s actual achievements of fulfilling CSRs. publish the report on the Company’s official website and will present the report Stakeholder’s comments are inserted at various places to enhance credibility of in electronic and printing formats in both Chinese and English. Therefore, it has the report. Therefore, it has an outstanding performance in originality. a leading procedural performance. Overall Rating（★★★★★） Substantive Performance（★★★★★） As evaluated by the rating team, 2015China Telecom CSR Report is rated The report systematically discloses key topics in the telecom service five-star and is an outstanding CSR report. industry, such as ensuring communication quality, innovation of products IV. Suggestions for Improvement and services, tariff transparency, dealing with customer complaint, protecting Increase disclosures of negative data and shortcomings of fulfilling customer information, creating a healthy Internet environment, safeguarding responsibilities to improve balance of the report. emergency communication, closing the digital gap and managing electromagnetic radiation, etc. The narrative is detailed and sufficient with Rating Team outstanding substantive performance. Leader: Director of CSR Research Center, Economics Division, Chinese Completeness（★★★★☆） Academy of Social Sciences ZHONG Hongwu The report systematically discloses 86.5% of the key indicators of Members: Deputy Director of Employer Work Division, China Enterprise the telecom service industry from such aspects as promoting responsibility Confederation and Executive Secretary-General of Global management, building an Internet powerhouse, serving the digital society, Compact Network China HAN Bin showing concern to growth of employees, practicing green development, Procedural Rating Team: WANG Zhimin JIA Jing caring about public welfare, China Telecom in Overseas Markets. It has a leading performance in completeness. Balance（★★★★☆） The report discloses negative data and information including customer complaint rate per million users, work-related injury and death, employee turnover rate, responsibility death rate per thousand employees, call drop rate of mobile communication, etc. It has a leading balance performance.

Chinese Expert Vice Chairman of Leader of Rating Team Committee on CSR Report Rating

86 China Telecom Report Specification

● Time Frame ● Guarantee of Reliability

This is China Telecommunications Corporation 2015 CSR Report. The Information disclosed in this report is true, aiming to reflect the Company’s report covers the whole 2015 with some contents extending this frame. market performance, social performance and environmental performance in an objective and comprehensive manner. ● Scope of Organization ● Ways of Obtaining This Report and Extended

Data and cases of this report refer to China Telecommunications Reading Corporation, its subsidiary company and holding subsidiaries. In this report, China Telecommunications Corporation is also referred to as “China The Company’s CSR report is available in Chinese and English, in paper Telecom(CT)”,the “CT Group”, the “ Group Company”, the “Company”, “we” and on line. The online version can be downloaded from China Telecom’s and “us” etc. website (http://www.chinatelecom.com.cn).

● Release Cycle China Telecom has been publishing CSR reports for 6 years consecutively. For more information on the Company’s fulfillment of CSRs, please visit its website for inquiry or download and consult previous CSR reports. This is an annual report and is released every year. ● Contact ● Content Description

Address: Department of Corporate Strategy, China Data and cases of this report are mainly collected internally and some Telecom, No.31, Financial Street, Xicheng cases are cited from publicly reported information. Amounts of money involved District, Beijing, 100033 in this report are all in RMB unless otherwise stated.

Fax:86-10-58501484 ● Reference Standards E-mail:[email protected]

This report was compiled by taking references from Guidelines for Central Government Enterprises to Fulfill Corporate Social Responsibilities issued by State-owned Assets Supervision and Administration Commission of the State Council, Guidelines for Preparation of CSR Reports in China (GB/T 36001- 2015) issued by General Administration of Quality Supervision, Inspection and Quarantine of the PRC and Standardization Administration of the PRC, Guidelines for Preparation of CSR Reports in China (CASS-CSR 3.0) published by Chinese Academy of Social Sciences, and Guidelines for Preparation of Sustainability Reports (G4) by Global Reporting Initiative.

2015 CSR Report 87 Reader Feedback Form

Dear Readers,

Thank you for taking time to read China Telecom 2015 CSR Report.

If you have any advice or suggestions for this report and for China Telecom in fulfilling CSRs, you are welcome to fill in the following form and send it to us by post, fax or email.

Thank you for your concern and support of China Telecom.

CSR Office

China Telecom

June 2016

1. Do you think this report can inform you of China Telecom’s fulfillment of CSRs?

□ Excellent □ Good □ Not Bad □ Bad □ Not Informed

2. In your opinion, which aspects did China Telecom do well in fulfilling CSRs?

□ Honest operation with legal compliance □ Secure communication to promote industrial development □ Safeguard consumers’ rights and interests and create values for customers □ Safeguard employees’ rights and interests and facilitate their development □ Protect environment to foster green development □ Participate in public welfare causes

3. In your opinion, which areas should China Telecom improve with emphasis in fulfilling CSRs?

□ Honest operation with legal compliance □ Secure communication to promote industrial development □ Safeguard consumers’ rights and interests and create values for customers □ Safeguard employees’ rights and interests and facilitate their development □ Protect environment to foster green development □ Participate in public welfare causes

4. Please leave your other advice or suggestions:

Please tell us about yourself if you like:

Name: Contact:

Occupation: Work Unit:

88 China Telecom China Telecommunications Corporation

Address: No. 31, Jinrong Street, Xicheng District,Beijing, China Zip code: 100033 Website: http://www.chinatelecom.com.cn