China Telecom Corporation Limited31 March 2005

Forward-Looking Statements

Certain statements contained in this document 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”) to be materially different from any future performance, financial condition or results of operations implied by such 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.

2

Management Team

Mr. Wang Xiaochu Chairman & CEO

Mr. Leng Rongquan Executive Director, President & COO

Ms. Wu Andi Executive Director, EVP & CFO

Mr. Li Ping Executive Director & EVP

3

Agenda

Review & Outlook

Business Performance

Financial Results

4

Favorable Results

2003 2004 Growth

Net profit and EPS for 2004 were arrived at after deducting asset revaluation deficit (RMB1,262 million) and related tax impact arising from across-the-board revaluation which is conducted every 3 years

**

Net profit and EPS for 2003 were arrived at after deducting asset revaluation deficit (RMB14,832 million) and related tax impact arising from 10 newly acquired provincial subsidiaries

*

Above financial figures are extracted from our financial statements which are prepared on IFRS basis. All financial and operating data in this presentation assumes the Group had been operating in the current service areas (20 provinces) since the beginning of 2003

Notes:

5

-** 0.36* 0.18EPS (RMB)

-** 28,023* 13,882Net Profit (RMB Mil)

1.6PP54.0%52.4%EBITDA Margin

9.5%87,00079,449EBITDA (RMB Mil)

6.4%161,212151,553Operating Revenue (RMB Mil)

91.4%13.847.23Broadband Subs (Mil)

15.9%186.65160.99Access Lines in Service (Mil)

Favorable Results (Ex-Connection Fees)

Net profit and EPS for 2004 were arrived at after deducting asset revaluation deficit (RMB1,262 million) and related tax impact arising from across-the-board revaluation which is conducted every 3 years

**

Net profit and EPS for 2003 were arrived at after deducting asset revaluation deficit (RMB14,832 million) and related tax impact arising from 10 newly acquired provincial subsidiaries

*

Unless otherwise stated, all financial data used hereinafter excludes connection feesNotes:

Continuous growth in subscribers, revenue and net profit

2003 2004 Growth

EBITDA margin sustained at a relatively high level

6

-** 0.25* 0.05EPS (RMB)

-** 19,565* 4,111Net Profit (RMB Mil)

2.3PP51.4%49.1%EBITDA Margin

12.7%78,54269,678EBITDA (RMB Mil)

7.7%152,754141,782Operating Revenue (RMB Mil)

91.4%13.847.23Broadband Subs (Mil)

15.9%186.65160.99Access Lines in Service (Mil)

Revenue Growth Drivers

141,782

152,754

4,102

4,381

2,489

Local Telephony

VAS and other businesses

Internet service

2003 2004

+5.8%+5.8% +41.0%+41.0% +4.5%+4.5% +7.7%+7.7%RMB Mil Annual Growth Rate

Local Telephony and Internet service are key drivers of revenue growth

7

5,99810,007

14,109

2002 2003 2004

Broadband Boosting Revenue Growth

2.4

7.2

13.8

2002 2003 2004

CAGR: +139.6%CAGR: +139.6%

Mil

% of Operating Revenue

RMB Mil

4.6%

7.1% 9.2%

Broadband subs grew by 6.61 million in 2004 and Internet service accounted for almost 10% of operating revenue

Broadband business is a key catalyst for our sustainable growth.

8

CAGR: +53.4%CAGR: +53.4%

Broadband Subs Internet Service Revenue

PAS Subs

PAS

10.8

25.6

42.2

2002 2003 2004

Mil

% of Total Access Lines in Service

8.1%

15.9%22.7%

Promote VAS like SMS and Color Ringtone to enhance revenue growth

Effectively expand subscriber base by controlling SAC

Increase network utilization

Focus on network quality enhancement to raise customer satisfaction rather than geographical expansion

9

CAGR: +97.7%CAGR: +97.7%

Strategies

CAPEX

CAPEX

61,587 56,307* 55,800

2003 2004 2005E

-8.6%-8.6%

36.9%43.4%

CAPEX/Operating Revenue

RMB Mil

Prepare for next generation networks

Leverage urbanization and maintain leading advantage of access networks

Transform existing networks into intelligent, broadband and IP based networks

10* A saving of RMB493 million from planned CAPEX of 2004

CAPEX Investment Focus

Dividend

Robust operating cash flow well supports funding demandsfor both

Maintain sufficient financial flexibility for continuousbusiness growth and strategic transformation to achievebest return to shareholders

Proper balance between sustainable development needs and shareholders’ demand for favorable cash return

The Board of Directors proposes a dividend of HK$0.065 per share for 2004

11

Perfecting Corporate Governance

• Enhance quality of information disclosures, including progressive enrichment of quarterly KPI disclosure

Promote transparency

Strengthen internal control to increase operating efficiency andreduce operating risk

• Improve investors’ communications

• Strengthen functions of audit and remuneration committee, study the set up of nomination committee

• More independent directors with increased authority

Improve corporate governance according to OECD standards

12

Opportunities and Challenges

Customers• Demand for diversified and one-stop services

• More choices and increased bargaining power

Increase operating cost of operators

• Rapid emergence of new technologies (like 3G, NGN), new services and new products

•Technology convergence of IT, telecom and media

Dynamic value chain

New Technology

Competition

• Increasing mobile substitution

• New VAS operators entering the market

Increase pressure on operations of fixed-line operators

• Sustained and robust economic growth

• Speeding up of national economic informatization

Strong demand for telecommunications services

Economic Environment

13

Near Term Development Focus

• Wireline：Leverage bundling andpackaging to boost usage

• Broadband：Expand subscriber base and extend value chain

• VAS：SMS, color ringtone

• Enterprise Subs：Provide total solutions and one-stop services

Product Bundling and Tariff Packaging

Targeted marketing, strengthening sales channel management

Brand Segmentation

14

Progressive Strategic Transformation

Wireline Broadband

Network

Fixed Wireless Network

Mobile Network

Consumer Contents and Applications

（Games, VOD, family informatization）

Enterprise Applications and Solutions

（IP VPN、System Integration, IT Outsourcing）

Communication Services (Voice, Data, Media….)

Fixed Telephone

PC

TV Home Appliances

PDA

Mobile Handsets

Extension of value chain

Convergence of multi-networks, multi-terminals & multi-businesses15

Agenda

Review & Outlook

Financial Results

Business Performance

16

Revenue Breakdown

2003（RMB Mil）

2004（RMB Mil） Growth

Share of Operating Revenue

17

100%7.7%152,754141,782Total

6.8%6.8%10,4009,737VAS & Others

7.0%28.1%10,7198,365Interconnections

2.7%-18.6%4,1545,103Leased Line

2.0%-6.1%3,0153,210Managed Data

9.2%41.0%14,10910,007Internet

2.5%-3.9%3,7883,943IDD

17.2%3.0%26,23125,460DLD

52.6%5.8%80,33875,957

31.2%4.0%47,64645,815Local Usage Fees

19.5%8.5%29,82727,499Monthly Fees

1.9%8.4%2,8652,643Installation Fees

Local

Continued Growth in Access Lines

104.8 108.1 112.6 113.1

17.1 17.7 18.4 19.08.0 9.6 11.0 12.417.025.6

36.5 42.2

2003.6 2003.12 2004.6 2004.12

146.9161.0

178.5 186.6

Mil

9.35.0

1.4

1.3

2.5

2.8

14.816.6

2003 2004

Mil

28.025.7

Residential Enterprise Public Telephone PAS

98.1% 97.8% 96.5%95.1%

Market Share

Sources：Ministry of Information Industry, China Telecom 18

Access Lines in Service Net Adds of Access Lines in Service

Local Usage RevenueLocal Voice Usage

429,150

384,496

360,986

2002 2003 2004

+6.5%+6.5%

+11.6%+11.6%47,646

45,815

44,440

2002 2003 2004

RMB Mil

+3.1%+3.1%

+4.0%+4.0%

Growth in Local Voice Usage

Pulses in Mil

Leverage sales channels and customer segmentation to launch targeted marketing

Capitalize on product bundling and tariff packaging

Optimize PAS network quality and functionality to ensure customer satisfaction,and growth in subscribers and usage

19

Robust Broadband Return

6.3%

43.8%

67.2%

81.2%

Korea HK Singapore China TelecomService Areas

Sources：AsiaCom, China Statistical Yearbook, Ministry of Information Industry, China Telecom

14,109

10,007

2003 2004

1,000940

136102

Investment per Sub（RMB）

Broadband ARPU （RMB）

+41.0%+41.0%

RMB Mil

20

Broadband Household Penetration Internet Service Revenue

DLD RevenueDLD Usage

Domestic Long Distance Service

59,492 67,31281,960

2002 2003 2004

+13.1%+13.1%

+21.8%+21.8%

Minutes in Mil

Market Share

45.8%

53.7%49.4%

25,726 25,460 26,231

2002 2003 2004

Unit Price (RMB)

-1.0%-1.0% +3.0%+3.0%

0.320.43

0.38

Public telephone and IP Supermarket to absorb moving population usage

Products bundling and tariff packaging to stimulate usage and revenue growth

RMB Mil

21

Leased Line Service RevenueManaged Data Service Revenue

Managed Data & Leased Line

3,0153,210

2003 2004

RMB Mil

-6.1%-6.1%

4,154

5,103

2003 2004

-18.6%-18.6%

RMB Mil

To promote one-stop total solutions to corporate customers

To provide economical and quality services to other operators

22

1,743

2,419

2003 2004

VAS

51.6

82.5109.0

2002 2003 2004

% of Total Access Lines in Service

58.4%

38.8%

51.2%Mil Minutes in Mil

+38.8%+38.8%

23

CAGR: +45.4%CAGR: +45.4%

Caller ID Subs Telephone Information Service Usage

VAS Initiatives

Develop a wide variety of innovative services and products

Improve network intelligence and new business platform

Enhance value chain by win-win cooperation24

Agenda

Financial Results

Business Performance

Review & Outlook

25

Key Financial Information

Change

26

7.7%152,754141,782Operating Revenue

12.7%78,54269,678EBITDA

-19,5654,111Net Profit-1,26214,832Deficit on Asset Revaluation

35.9%31,37223,081Operating Profit

2.3%121,382118,70130.3%4,1393,176Other Operating Expenses

14.6%19,22916,778SG&A

11.6%23,23320,812Personnel

-11.9%27,61131,338Network Operations & Support

1.2%47,17046,597Depreciation & Amortization

Operating Expenses

2003（RMB Mil）

2004（RMB Mil）

Sustained Revenue Growth

141,782152,754

2003 2004

+7.7%+7.7%

RMB Mil

118,211111,082

2003 2004

+6.4%+6.4%

RMB Mil

Voice Revenue includes Monthly Fees, Local Usage Fees, DLD/IDD and Interconnection Revenue

6357

Voice ARPU (RMB)

27

Voice RevenueOperating Revenue

Operating ProfitEBITDA

Profit Growth

60,354

69,67878,542

2002 2003 2004

23,081

31,372

14,544

2002 2003 2004

RMB Mil RMB Mil

EBITDA Margin

49.1%

51.4%

46.3%

28

CAGR: +14.1%CAGR: +14.1%

CAGR: +46.9%CAGR: +46.9%

Optimized Cost Structure

32.9% 30.9%

22.1%18.1%

11.8%12.6%

14.7%15.2%

2.2%2.7%

2003 2004

83.7% 79.5%Other Operating

Expenses

SG&A

Personnel

Network Operations &

Support

Depreciation & Amortization

Operating Expenses

29

Expenses as % of Operating Revenue

Solid Financial Strength

43.4%45.0%41.3%

2003.12 2004.6 2004.12

Total Debt/Total Capitalization

1.74x1.81x

2003 2004

Net Debt/EBITDA Free Cash Flow *

17,048

7,622

2003 2004

Solid financial strength and favorable cash flow well support our sustainable development

RMB Mil

Note: * Free Cash Flow = EBITDA (Ex-connection fees) – Income Tax - CAPEX

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Financial Management

Persist to improve internal control to reduce risk

Apply precision management to control costs and CAPEX effectively

Strengthen treasury management to reduce cost of capital

Improve comprehensive budget management to effectively allocate resources and to realize strategic transformation

31

Strengthen Internal Control

Reduce operating risk Ensure shareholder interests

Enhance operating efficiency

Internal control on financial management (COSO)

Internal control on financial management (COSO)

Internal control on business operating system

Internal control on business operating system

Internal control on corporate governance

Internal control on corporate governance

Board of Directors

Audit Committee

CEO & CFO

Internal Audit

32

THANK YOU

China Telecom Corporation Limited

w w w . c h i n a t e l e c o m - h . c o m33

Appendix 1：Extracted from audited statement of income for the year ended 31 Dec 2004 (incl. upfront connection fees)

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28,02313,882Net Profit(53)(56)Minority Interests

(5,187)(469)Taxation35(7)

Share of (Loss)/Profit from Associates

(5,340)(3,606)Net Finance Costs(1,262)(14,832)

Revaluation Deficit on Property, Plant and Equipment

(121,382)(118,701)Operating Expenses8,4589,771including: Upfront Connection Fees

161,212151,553Operating Revenue

2004(RMB Mil)

2003(RMB Mil)

Appendix 2：Extracted from audited balance sheet as at 31 Dec 2004 (incl. upfront connection fees)

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159,206150,794Shareholders’ Equity1,4131,269Minority Interests

251,951251,879Total Liabilities100,007102,744Non-Current Liabilities

151,944149,135Current Liabilities

412,570403,942Total Assets379,038370,849Non-Current Assets

33,53233,093Current Assets

2004(RMB Mil)

2003(RMB Mil)