China Telecom profit to be hit by Xiaolingtong closure

China Telecom issued a profit over its 2008 earnings due to a write-down of assets for its low-cost wireless network, the Financial Times reported. The company, which is due to report its earnings on March 24, is writing off the value of Xiaolingtong, or "Little Smart," a network that is set to become obsolete with the introduction of third-generation mobile services. Analysts said the write-off, thought to be worth US$4 billion, could drag China Telecom’s profit down by 90% year-on-year. Xiaolingtong, which offers cheap wireless services but within a limited geographical area, was launched in 1998. It peaked in 2006, when China Telecom and China Netcom had more than 90 million users between them, before being marginalized as China Mobile and China Unicom cut their prices. Now China Telecom has its own mobile network, the government ordered the closure of Xiaolingtong.