CORPORATE CULTURE About China Telecom China Telecom Corporation Limited (“China Telecom” or the “Company”, a joint stock Corporate Mission limited company incorporated in the People’s Republic of China with limited liability, together with its subsidiaries, collectively the “Group”) is a large-scale and leading Let the customers fully enjoy a new information life integrated intelligent information services operator in the world, providing wireline & mobile telecommunications services, Internet access services, information services and other value-added telecommunications services primarily in the PRC. As at the end of 2019, the Strategic Goal Company had mobile subscribers of about 336 million, wireline broadband subscribers of about 153 million and access lines in service of about 111 million. The Company’s H shares Be a leading integrated intelligent information services operator and American Depositary Shares (“ADSs”) are listed on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange” or ”HKSE”) and the New York Stock Exchange respectively. Core Value Comprehensive innovation, pursuing truth and pragmatism, respecting people and creating value all together Operation Philosophy Pursue mutual growth of corporate value and customer value Service Philosophy Customer First Service Foremost Code of Corporate Practice Keep promise and provide excellent service for customers Cooperate honestly and seek win-win result in joint innovation Operate prudently and enhance corporate value continuously Manage precisely and allocate resources scientifically Care the staff and tap their potential to the full Reward the society and be a responsible corporate citizen Corporate Slogan Connecting the World Forward-Looking Statements Certain statements contained in this report may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 (as amended) and Section 21E of the U.S. Securities Exchange Act of 1934 (as amended). Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of China Telecom Corporation Limited (the “Company”, a joint stock limited company incorporated in the People’s Republic of China with limited liability) to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. In addition, we do not intend to update these forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company’s most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) and in the Company’s other filings with the SEC. Contents 001 Contents 092 Environmental, Social and Governance Report 002 2019 Milestones 094 Corporate Social 003 Corporate Information Responsibility Report 004 Financial Highlights 116 Human Resources Development Report 008 Chairman’s Statement 126 Afterword 020 Biographical Details of 129 Table of the ESG Directors, Senior Management Indicators and Supervisors 134 Independent Assurance 032 Management’s Discussion and Report Analysis 135 Appendix – ESG 032 Business Review Reporting Guide Index 041 Financial Review 140 Corporate Governance 052 Report of the Directors Report 086 Report of the Supervisory 176 Independent Auditor’s Report Committee 181 Consolidated Statement of 090 Recognition and Awards Financial Position 183 Consolidated Statement of Comprehensive Income 184 Consolidated Statement of Changes in Equity 185 Consolidated Statement of Cash Flows 187 Notes to the Consolidated Financial Statements 273 Financial Summary 275 Shareholder Information Corporate Culture China Telecom Corporation Limited Annual Report 2019 001 2019 MILESTONES JAN As a pioneer to achieve interoperability of equipment from different vendors based on 5G standalone (“SA”) architecture in the industry Launched the e-Surfing Cloud Industrial Internet Platform, made full use of the secure and reliable, independently controllable e-Surfing Cloud infrastructure advantages, combining 5G and industrial APR Internet to create the industrial edge application and 5G industrial application ecospheres Held the Co-building Double-Gbps Demonstration City and China Telecom Smart Family Ecosystem Collaboration Conference in Shanghai, published the China Telecom’s Smart Family White Paper, MAY announced to build the five-in-one Smart Family product and service portfolio – consisting of Smart Broadband, Smart Family Platform, Smart Application, Smart Security and Smart Service China Telecom has been granted the permit to operate 5G digital JUN cellular mobile service JUL The total number of mobile subscribers exceeded 325 million, leaping to the second place in the industry in the country Entered into a 5G network co-build and co-share framework cooperation agreement with China United Network Communications Corporation Limited (“China Unicom”). Both parties can fully leverage their mutual complementary advantages over network and spectrum resources, jointly co-build one 5G SEP access network nationwide, rapidly create 5G service capability and effectively reduce network construction and maintenance costs while continuing to operate the business and branding independently to achieve a win-win situation for both parties Officially launched 5G commercial services in 50 cities nationwide offering 5G services to individuals, households, government and OCT enterprise customers and simultaneously rolled out government and enterprise customers-oriented 5G services based on SA architecture in Shenzhen 002 CORPORATE INFORMATION Board of Directors Supervisory Committee Executive Directors Sui Yixun (Chairman) Zhang Jianbin (Employee Representative) Ke Ruiwen (Chairman and Chief Executive Officer) Yang Jianqing (Employee Representative) Chen Zhongyue Xu Shiguang Liu Guiqing Ye Zhong Zhu Min (Chief Financial Officer and Secretary of the Board) Wang Guoquan Legal Representative Ke Ruiwen Non-Executive Director Chen Shengguang Company Secretary Independent Non-Executive Directors Wong Yuk Har Tse Hau Yin, Aloysius Xu Erming International Auditor Wang Hsuehming Deloitte Touche Tohmatsu Yeung Chi Wai, Jason Legal Advisers Audit Committee Haiwen & Partners Tse Hau Yin, Aloysius (Chairman) Freshfields Bruckhaus Deringer Xu Erming Sullivan & Cromwell LLP Wang Hsuehming Yeung Chi Wai, Jason Stock Code Remuneration Committee HKEx: 728 NYSE: CHA Xu Erming (Chairman) Tse Hau Yin, Aloysius Wang Hsuehming Company Website www.chinatelecom-h.com Nomination Committee Wang Hsuehming (Chairlady) Tse Hau Yin, Aloysius Xu Erming China Telecom Corporation Limited Annual Report 2019 003 FINANCIAL HIGHLIGHTS 2017 2018 2019 Operating revenues (RMB millions) 366,229 377,124 375,734 1 EBITDA (RMB millions) 102,171 104,207 117,215 EBITDA margin2 30.9% 29.7% 32.8% 3 Net profit (RMB millions) 18,617 21,210 20,517 Capital expenditure (RMB millions) 88,712 74,940 77,557 Free cash flow4 (RMB millions) 7,267 22,457 21,725 5 Total debt/Equity 32.0% 27.9% 22.4% Earnings per share (RMB) 0.2300 0.2621 0.2535 Dividend per share (HK$) 0.115 0.125 0.125 1 EBITDA is calculated based on operating revenues minus operating expenses plus depreciation and amortisation. 2 EBITDA margin is calculated based on EBITDA divided by service revenues. 3 Net profit represents profit attributable to equity holders of the Company. 4 In order to more objectively reflect the Company’s free cash flow, enable a comparable basis to free cash flow of prior years and avoid incomparability of free cash flow resulting from the application of IFRS 16, the original free cash flow calculation “free cash flow = EBITDA minus capital expenditure and income tax” has been changed to “free cash flow = EBITDA minus capital expenditure, income tax and depreciation charge for right-of-use assets other than land-use-rights”. 5 Total indebtedness refers to interest-bearing debts excluding lease liabilities. Total equity represented equity attributable to equity holders of the Company. For further information, please browse our website at www.chinatelecom-h.com 004 FINANCIAL HIGHLIGHTS Operating Revenues (RMB millions) 2019 375,734 2018 377,124 2017 366,229 EBITDA (RMB millions) 2019 117, 215 2018 104,207 2017 102,171 Net Profit (RMB millions) 2019 20,517 2018 21, 210 2017 18,617 Dividend Per Share (HK$) 2019 0.125 2018 0.125 2017 0 .115 China Telecom Corporation Limited Annual Report 2019 005 SUPERIOR EXECUTION as the Bedrock for Growth CHAIRMAN’S STATEMENT CONNECTING INFINITY EMPOWERING FUTURE The official commercialisation of 5G in China brought new development opportunities to the telecommunications industry. China Telecom has abundant network resources, professional team and good brand reputation which shape our unique edges. We focus on our customers, further promote “Cloudification”, that allows our network to be more agile and flexible to offer personalised, secure and reliable service to our customers. We march forward to promote digital transformation of the economy and society, satisfy the informatisation demand upgrade of our customers, and create new value for the Company and shareholders! Ke Ruiwen Chairman and Chief Executive Officer CHAIRMAN’S STATEMENT Dear shareholders, position. At the same time, the Company expanded proprietary innovation and open In 2019, China Telecom capitalised cooperation, while promoting co-building firmly on the invaluable opportunities