Let's get closer. Closer.
Good afternoon, dear investors and friends in the media. Welcome to the mid-term performance conference of China Telecom Co., Ltd. in 2024. First of all, allow me to introduce the board members and management staff of the conference today. They are the Executive Director, Chairman and Chief Executive Officer, Mr. Kerwin, President and Chief Operating Officer, Mr. Liang Baojun,
Mr. Tang Ke, Executive Director and Vice President. Mr. Li Yinghui, Executive Director and Vice President. Mr. Wu Jianing, Independent Non-Executive Director. Mr. Yang Zhiwei, Independent Non-Executive Director.
Today's press conference will be divided into two sections, performance introduction and Q&A. The conference will be held in Mandarin. During the conference, please put your mobile phones in silent mode. Now, let's welcome Mr. Kerwin to introduce the company's mid-term performance in 2024. Chairman, please.
Ladies and gentlemen, good afternoon. Welcome to the company's mid-term performance conference in 2024. Thank you for your long-term concern and support for the company. Today's performance introduction is divided into two parts. First, I will introduce the overall overview of the company's first half year. Then, Mr. Liang Baojun will introduce the company's business and financial performance.
In the past year, the focus of company development has been on the following six aspects. First, steady growth in business performance. High-quality development continues to improve. Second, continuous strengthening of technological innovation. Building up and absorbing manufacturing capacity. Third, promoting AI plus quantum plus.
to accelerate the development of new production capacity. Fourth, to promote the upgrade of infrastructure and accelerate the transformation of smart green technology. Fifth, to fully deepen the reform and opening up, and further enhance the vitality of the enterprise. Sixth, to gradually take on social responsibility and further enhance the return of shareholders. In the past six months, the company has continued to implement the cloud speed transfer strategy in-depth,
to actively expand personal, family, and government-owned information services. Operating performance has grown steadily. Income, EBITDA, net profit, ROE, and other indicators have all achieved good growth. In the first half of the year, the company's income has maintained good growth. Service income has increased by 4.3%, which is higher than the industry. Profitability continues to grow.
Net profit increased by 8.2%, which is higher than income. Net profit increased by 0.4%, which is higher than income. Shareholder income continued to increase by 0.2%, which is higher than ROI. Tianyu Cloud is entering a new development stage of smart cloud. It keeps growing rapidly.
The revenue has reached 55.2 billion yuan, and the service revenue ratio has increased by 22.4%. The position of the leading market is stable. The company has accelerated the improvement of intelligent service capability. The user satisfaction and reputation have continued to improve. The company is surrounded by network, cloud and cloud-network integration, AI,
and quantum safety. We will complete the RDO, Research and Development System, and continue to increase investment in R&D. R&D costs have increased by 12.5%. We will accelerate the construction of research teams. We will have more than 10,000 R&D specialists. We will have 38,000 R&D personnel.
and increased by more than 15% by the end of last year. The company's technological innovation level continues to improve. It was selected as the Central Enterprise Technology Innovation Excellent Enterprise List in 2023. Four major technological breakthroughs have been achieved, and a number of cutting-edge technology and original technology test sites have been approved. In the future, cloud computing, quantum communication, and the next generation of online innovation
The two projects have been awarded the 1st prize in the 2023 National Science and Technology Award. The company has built a leading and integrated smart service system and capabilities, and has built a computing platform, data model, and application-based computing cloud capabilities system. The company has been fully open to eco-cooperation and has provided
It is a well-deserved computing service. Xirang's integrated computing platform has broken through many critical technologies. It has powerful computing network scheduling, high-efficiency e-commerce computing, and one-stop promotion. It provides a wide variety of public intelligence services. Xirang has now joined 39 computing partners.
All kinds of smart computing have reached 2.2 billion blocks. That is, we have joined 39 companies. With the joining of these 39 companies, we have reached 2.2 billion blocks. In public computing, Internet of Things, e-commerce computing, and other areas, we have accumulated a lot of applications. The company continues to promote the improvement of the ability to build new basic models.
We have made many breakthroughs in the field of 4-Language Technology Public Relations. We have completed the dual-backup of multi-modal speech-to-voice and multi-modal speech-to-voice models. The speech-to-voice model is the first independent backup in China. The speech-to-voice model with billions, billions, and billions of parameters is the first to be realized in the central enterprise. In terms of big data, our company has launched a chain of
data element capabilities to achieve high-quality data. Xinhai Data Intelligence Center integrates AI capabilities comprehensively and achieves multiple technological breakthroughs. Linze 2.0 Data Solution Platform supports 10-provincial data element competition. The company delves into the development of AI plus and the wide-ranging smart development of rich talent in hundreds of industries.
In the areas of digital governance, digital reputation, and digital economy, we have launched 32 scenario models. We serve more than 7,600 clients. We have integrated AI's capabilities into digital platforms and client solutions. We have promoted commercial model innovation. At the same time, based on the ability to generate basic models, we have created a cloud-based and end-to-end AI application ecosystem.
to launch a series of standardized AI products such as AI cloud disk, AI cloud computer, and AI mobile phone to meet the diversified and intelligent needs of our customers. With the help of digital and intelligent means, the company has fully promoted the digital transformation upgrade of AI-enabled internal systems. For the development and promotion of applications for business operations such as network operations, client management, and research,
10 internal large models. Continuously expand performance, enhance coverage and depth, perfect assessment, and stimulate dual drive. Fully promote the company's down-to-earth system and increase efficiency. In the first half of the year, the company's AI-enabled base station and smart energy efficiency were significantly improved. Smart customer service ratio steadily improved, and resource utilization efficiency continued to improve.
Our company is working to promote quantum home, to build operational security, to actively expand the quantum industry ecosystem, to strengthen the production and use cooperation between research institutions, leading companies, and the industry chain. Based on QQD, PQC, and other technical systems, we are building quantum-secret key distribution, quantum-password resource pool, and quantum-password management platform quantum security infrastructure.
We want to integrate quantum technology into our basic business and innovate our business. We want to launch a quantum home product system. We want to create a security application with differentiated advantages. We want to achieve scale development. We want to grasp the market demand. We want to speed up the transformation of digital information infrastructure. We want to further enhance the ability of computing and the Internet. We want to strengthen the market competitive advantage. We want to complete capital expenditure in the first half of the year.
47.2 billion yuan. In terms of computing power, we have increased our computing power by 1.1 billion FLOPS. 1.1 billion FLOPS. We are pushing the data center to upgrade to AIDC. At Jingjingji and Changshanjiao, we have built the world's leading all-nighter WAN card pool. At the 31 provinces, we are deploying the reasoning pool to continue to optimize the computing power of the Internet.
In terms of network, we have increased the number of 5G sharing base stations to 100,000 stations, and we have fully promoted the 5G-A capability upgrade. We have increased the number of 10G-PoW ports to 9 million, and we have deployed 50G-PoW networks. We support the demand for 10,000G connections in key scenarios. The company will continue to optimize its investment structure and maintain a total annual capital expenditure of less than 20%.
The company uses the 1248 green development model as a guide to create green cloud infrastructure and launch a variety of green product services. In the first half of the year, the company accelerated the upgrade of traditional communication buildings and base stations to green. The company has 12 newly added national green collection centers, which is the largest in the industry.
to reduce the total amount of coal emissions in telecommunications, and maintain a double-digit growth. At the same time, we will focus on clean production, pollution control, and environmental protection, and create a series of green solutions to enable the green low-carbon transformation of the economic society. The company insists on a comprehensive bio-reformation reform, promote high-quality development, and promote the construction of three-tier enterprises. We will focus on technological innovation, innovative business, and human resources development,
market-based business, and other areas, to deepen the system and mechanism of reform. By strengthening full-scale technology public relations, promoting technological transformation, deepening the industry, and revitalizing business and company reform, we will fully promote the optimization of the main process, implement the talent-raising strategy, build new business responsibility and other reforms, and continue to enhance the vitality of the enterprise. The company will actively promote the high-level opening of science, technology, business, talent, capital and other areas,
To strengthen the digital transformation of service platforms, to deeply develop international cooperation, and to fully promote high-level openness. For three consecutive years, Huopin has been the A-Level of the Central Enterprise Reform Key Task Assessment. The company actively takes on social responsibility, provides communication security for all kinds of important activities, technology assistance and disaster prevention,
China.
U.S. shareholdings are 0.1671 yuan, which is 16.7% higher than the previous year. The interest rate is over 70%, which is over 5% higher than the previous year. The company will continue to keep its promise. From 2024 to 2023, the profits allocated in cash will gradually increase to more than 75% of the shareholder's current profit.
Currently, the company is at the critical juncture of high-quality development. Faced with the huge market opportunity of the digital economy and good development model, the company will continue to implement the cloud-based fast-transition strategy with excellent execution, further deepen the reform and promote high-quality development. We strive to achieve full-year income in 2024 and continue to maintain good growth in EBITDA.
The goal of Jingyi Run is higher than the income increase. We strive to improve the value of the enterprise and actively respond to large shareholders. This is the end of my introduction. Next, Mr. Liang Baojun will introduce the business and financial performance of the company. Thank you.
Thank you, Chairman Ke. Now, I will introduce the company's business and financial performance. The company has three major business sectors. In the first half of the year, the revenue has grown and the market is doing well. The operating cost has increased and the control has been effective. Profitability has continued to improve. Next, I will further introduce the development of various businesses. In the first half of the year,
The company's basic business is steadily developing. We are using cloud, network, AI, and applications to speed up the integration of cloud, AI, quantum, satellite, and other new elements into standard products. As a result, the contribution of application services continues to increase, boosting the scale and value of basic business. Mobile communication service revenue has increased by 3.6%,
which increased by 17.1% in mobile payment and application revenue, and increased by 17.2% in mobile communication service revenue. Moving up to 46.3 yuan. In the past, smart home service revenue increased by 3.2%, and smart home business revenue increased by
14.4%, with an increase of 16.7% from the previous smart home service income ratio, and a total of 48.3 yuan. The business of AI cloud, AI video coloring, FTTR, and Internet of Things has maintained a rapid development. In the first half of the year, the number of factories has maintained a good growth,
The revenue of the factory has increased by 30% compared to the revenue of the service. The number of customers has increased by 11.9%. The ability of self-managed digital platforms has continued to improve. More than 110 platforms, services, business, industrial, education, medical, finance, etc. are key industries. Rich solutions effectively promote industry customers,
Digital transformation is a miracle. Tianyi cloud, with its leading computing service capability, continues to grow in terms of customer and income scale. 29.2% increase in 2B customers to 4.55 million customers. 26% increase in public cloud income. The market share has further increased.
The company catches up with the various digital needs of customers, and fully utilizes multi-advantages such as cloud computing services, cloud-network integration, security reliability, and digital services. With a diversified solution, it meets the rich application scenario needs, and builds a batch of benchmark projects to gain widespread recognition in the market. The company's AI plus big data application continues to expand,
In the first half of the year, AI-wide FUNAN, 2G, 2B, 2C, and 2H customers have created many typical industry applications. In terms of big data, Linze 2.0 data element platform serves 22 provincial and municipal public data operations and data infrastructure construction. Xinghai Data Intelligence Center has landed more than 150 projects,
There are more than 50 Ecological Data Cooperation Alliance units. The data product ecology is becoming more and more prosperous. The company's high-quality safety products and services are widely recognized by the market. Among them, the 10-billion-yuan low-emission anti-ground products have increased by 36%. The 100-billion-yuan low-emission Tianyi safe brain and website security expert products
customers increased by 4.1% and 32% respectively. Safety-oriented large models are becoming more and more powerful. AI technology and safety products are further integrated to enhance the efficiency of safety operations and customer experience. Safety products and service standards have been widely replicated and the scale has expanded rapidly.
The company's rapid development of the new generation of telecommunications business, 5G, 2B, and industry applications have accumulated over 3.6 trillion yuan, and the contract amount is about 3.4 billion yuan. Satellite telecommunications income has been achieved. The number of WeChat users connected to mobile phones has increased by 67% by the end of 2023. Low-cost economic projects have landed in Shenzhen, Jiangsu, etc.
Internet of Things revenue has increased by 46.4%, with users exceeding 88 million. The Internet of Things platform has 11-level connectivity and online perception control capability, with users exceeding 600 million. The company's international business continues to grow. In the first half of the year, revenue increased by 10%, while overseas revenue increased by 172%.
The number of international users has increased significantly, to 136%. We have made breakthroughs in overseas online business. We have successfully launched our mobile-connected WeChat business in Hong Kong. We have strengthened our international communications business, and our global cloud-based infrastructure. Our company is focusing on controlling the strength and direction of resources.
to effectively support high-quality development. The operating cost has increased by 2.4%, and the efficiency of input and output has been further improved. The company is tightening the digital economy development opportunity, increasing the key field of investment, and strengthening core technology public relations. We will continue to promote the smartening and greening of infrastructure, increasing the introduction of technology-oriented and innovative talents,
to promote digital operations and improve resource efficiency. The company's financial strength continues to grow. In the first half of the year, EBITDA grew by 4.7% to 7.7 billion yuan. The shareholder's balance of equity grew by 3% to 4,563 billion yuan at the end of last year.
The asset-to-debt ratio is at 47.1%. The main credit remains at the highest level of 3A. That's all for my presentation. Thank you. Next, let's move on to the Q&A session. Today's performance presentation
Okay.
Ladies and gentlemen, if you have any questions, please press star 1 1 on your phone. If you want to cancel your order, please press star 1 1 as well. The first question is from GongBiYing from Xinhua.com. Your line is open, please ask your question.
Hello, can you hear me? Yes, we can hear you. Hello, Mr. Li, I have a question for the reporter. We have noticed that Mr. Ke has mentioned the reform many times in public. In your report, you also mentioned the reform. Could you please give us a detailed introduction on how you think about the reform, and what remarkable achievements the reform has achieved so far?
Next, what important measures does China Telecom have to take? Thank you. Thank you for your question. You have a very tight grasp on the content, key points, and the company's work. You have a very precise grasp. I have indeed talked about the issue of reform on many occasions. Perhaps we have talked more about it internally.
Over the years, the company has always seen the comprehensive deepening of reform as a strong driving force for the company's development and a key move. Because the company has to fulfill its mission and responsibility, it has to give back to shareholders and society. The company itself has to promote traditional telecommunications operators
such as service-type, technology-type, and security-type companies, must undergo a comprehensive revolution. The achievements we have made over the years are actually the result of a comprehensive revolution. As we all know, China Telecom has returned to the A-share market for more than three years. This is a major reform.
We seized the opportunity of such a major reform, and we promoted the high-quality development of the company with such a major reform. We used Huyai as the main platform, the main catcher, to promote the various reforms of the company and promote various jobs. So we fulfilled the commitment to the capital market that Huyai has been listed for three years.
Therefore, the development of the company has played a huge role in the reform. This is a key move. In the next step, we will continue to use this key move to further deepen the reform. When I was introducing the PPT and performance, I mentioned that the company's development is now at a critical time for high-quality development.
The development of technology and industry is very fast. The potential high-quality demand is still very high. The policy environment is also very good. In particular, the company must have a very rich variety of resource elements. Network, users, data, capital, talent, technology.
There are many factors. We have good policy conditions and environment. At this time, how can we grasp the key time nodes through a comprehensive biochemical reform? How can we make good use of these factors? How can we improve our quality of life? We have to rely on a comprehensive biochemical reform. The general idea is the same. It is to surround the construction of three-star companies.
around the construction of technology-based enterprises, to improve the level of innovation and configuration of all kinds of resources and elements, and to enhance the motivation to configure these resources and achieve high-quality development. We need to configure the resources well.
around the construction of scientific and technological enterprises. I remember in the clip just now, if you could play it, there is a clip from the RDO layout. You can watch it on the spot. I think that clip is good. Oh, this one. I can't see it. Let me... In this clip,
We have transitioned from traditional telecommunications operators to service-type, technology-type, and security-type enterprises. The core is technology. So when we transition to technology-type enterprises, what was our original goal? Our original goal was more about... The level of technology development was more limited to the Internet. And based on the standards of the Internet,
It's not really R&D. Now, we have to arrange our R&D system according to the RDO. We have four major technological directions, this is clear. We have four R research institutes, that is, technology research and application technology research. One is our current China Telecom Research Institute, which is particularly strong on the Internet. In addition, we recently set up several cloud computing research institutes.
Artificial Intelligence Research Institute, quantum research institute. This is a part of R. This needs to be reformed. More importantly, a part that we are relatively lacking is a professional company. That is, platform companies, capability companies, like Yun, AI, security, quantum, these platform companies, capability companies. We have relatively few companies that provide products, services and capabilities.
In the past, we were the strongest in the local network, in the provincial and municipal companies. But in the provincial and municipal companies, this kind of organization, this kind of process, is mainly used to sell and serve standardized products, basic telecommunications products. It does not fully adapt to the development of comprehensive IT services, cloud, artificial intelligence, quantum, and other strategic new business.
So our reform mission is still very important. So we have been promoting these reforms over the years. For example, the development of our cloud companies, the development of our AI companies, the development of our security companies, the development of our quantum companies, and the development of these PaaS platforms. At the same time, we are in SAAS, professional SAAS, like our medical companies, medical companies, medical, health, education, finance, these kinds of professional BG are also very fast.
Especially in recent years, we have been promoting our main resource location, which is the provincial and county-level companies. The main reform process in this place, the construction of the second team in this place, this is the key, the most important. These are some of the advantages we have gained. So how can we configure this well? This is our ability to manage.
So I think, to put it simply, it is a very important task to deepen the reform. After years of hard work, we are confident in promoting this reform. This year, we have a clear goal. For example, the main process of provincial, municipal, and county companies must be in place. All teams must be in place. After four or five years of development, we have the conditions, and we have the conditions.
As soon as the reform is in place, high-quality development and high-value service level will rise. We have several provincial companies that are doing very well. Their annual output keeps growing by more than 30%, and their profits are very good. So if a provincial company is selling 2B, 2C as a standard product is selling 2B. So we have to look at these issues in depth.
At the same time, we want to improve the ability of technology personnel and managers to stimulate their firepower. This is actually the ability of resource configuration. We have done a lot of work in this area, especially technology personnel. In the past few years, we have already had our foundation. The technology personnel is in the pattern of 10,000 people. The enterprise strategic technology, top talents, engineers and second-generation teams, this system is more complete.
The investment in R&D and the investment in manufacturing costs is also relatively large. Now all aspects of the conditions are already in place to make them fully active. Our requirements for technology managers are also relatively strict. The principle of the market, and the collective constraints and constraints, such as these things, we will continue to grasp in depth. At the same time, we must not limit to the internal of the enterprise. We say further deepening, reforming and opening up.
For China Electronics, openness is the effective configuration of achieving resources on a larger scale. It is necessary to integrate good resources from outside into the enterprise through openness, and integrate them into the mainstream process to provide services to customers. At the same time, it is necessary to be brave enough to integrate your own high-quality resources outside to provide some services to customers. These are some of the important contents of China Electronics' openness.
This year, our reform will take a new step. I believe that through the reform, China Telecom's high-quality development will also take a new step. Okay, that's all I have to say. Thank you.
Hi, I'm Li Jieyi from the Ministry of Public Relations. As the Chairman mentioned, telecommunications industry is opening up. I'd like to know if the Ministry of Public Relations has been thinking about expanding the opening up of telecommunications industry. For example, it's interesting to promote the entry of satellite Internet business.
I would like to congratulate you on your good performance in the first half of the year. However, I would like to know, in the midst of the global economic downturn,
I would like to know how big the impact will be on ZTE in the second half of the year or the year after next. Do you need to make any adjustments to your capital in the coming year? Thank you. Thank you. Thank you for your continuous attention and help over the years. I just talked about opening up. We have been insisting on reform and opening up for the past few years. I just talked about opening up.
It must be in an open environment for companies to develop healthily. Now, all kinds of networks and businesses in the telecommunications industry have been fully opened. In fact, we are already in a very open environment, competing, cooperating, providing services, and improving the value. You see, many of our businesses are completely open. You see, Yun's business is open.
Liang Zi didn't say that people should quit. Right? Political business is open. Artificial intelligence is even more like this. So we welcome it. We think that such a country's policy of opening up to the outside world is a very good policy environment and a duty for the communication industry and China's telecommunications development. We actively integrate and seek our own development in it, some development of this enterprise. You just talked about the issue of macroeconomics. As an enterprise,
When we think about work, we have to look at the present and the future. China's economy is stable and has a good attitude from the data released by the National Bureau of Statistics in January to July. In terms of the development of our company, in the first half of this year, our service income and profit growth
So, from our perspective, we can see that we are very confident in the future development of our company. However, in terms of market conditions, the company should be good at finding new opportunities in the market. The development of the market cannot be balanced.
There are opportunities and challenges. There are good growths and there are bad growths. In our business, there are good growths, there are fast growths, and there are also relatively slow growths. It's the same in production. In the first half of this year, the overall growth of our production was as expected. At the same time, we can see that there is a real need for potential.
There are still some projects that have financial security. It depends on how you capture these projects. For example, the digitalization and intelligent transformation of enterprises is undoubtedly a direction. So, whether you can provide these enterprises to meet some of their needs and enhance their value, I believe this is a good project. So, we are confident about this.
Recently, there have been a few good projects. For example, our emergency communication products, our small and medium-sized micro-enterprises' smart products and services, and those AI products and services. The market is good in this area. Over the past few years, even on the traditional business infrastructure, we have added some of the A.I.'s flagship products, such as A.I.'s cloud computers, A.I.'s video coloring,
AI's mid-range. They sell very well and grow very fast. This is a sample. It's the same in our company. We have a consensus in China Telecom. If you want to give something to someone, you should use it yourself first. If you don't use it yourself, how can you convince people? In our company, we have 10 AI models in our company. They play an important role in system reduction, efficiency and efficiency.
These are all very good products and services. Now that enterprises are developing at this critical time, I think we should be even more confident. In March this year, our guidance for the whole year is unchanged. In terms of income and capital expenditure, I will talk about our view on capital expenditure. In terms of the whole figure, you notice that capital expenditure has increased by 13.5%.
This number is not very compatible with other numbers. But why should we invest in the management layer? It depends on the structure. In the first half of this year, we added 11 FLOPS. In the first half of this year, we added 11 FLOPS. We invested in this area. There won't be too many big models in the short term. This is a direct commercial deviation.
But large-model technologies, like artificial intelligence, which is a leading enterprise, without large-model research and development, without its own WAN card, without large-model research and development, will be very passive in the future. In addition, we can see that when we look down at large-model technologies, everyone pays more attention to GPU. Where does GPU go? It must be put in the DC, the Defense Bureau.
This machine room is different from the original IDC machine room. It is an AIDC machine room. It has requirements for energy saving, power supply, weight, and management. Who is going to do this? We saw this trap. We set it up early. So we are the first typical AIDC in Ninggang, Shanghai. And after the AIDC was built, it has a very strong programming ability. Its high machine price, high power machine price, and utility,
So in this case, we should be bold. But don't worry, as I said in the presentation, the total investment of 9.6 billion yuan in the whole year, and the value of capital-based investment accounts for 20% of the total revenue, is unchanged. We mainly adjust the structure.
and for the future development and storage of our energy. Thank you. Next, let's invite Assistant Hui Rui to join another online media friend for questions. Thank you. Okay, the next question is from Liu Canbang from Zhengquan Times. Your line is open, please ask.
Hello, host. Can you hear me? Yes, we can hear you. Please go ahead. Okay. Mr. Ke, hello to all the managers of China Telecom. First of all, congratulations to China Telecom for achieving a very good operating performance in the first half of the year. My question is about artificial intelligence, especially the current importance of artificial intelligence as a driving force for a new round of technological revolution and industrial change.
Okay, thank you.
It has been more than two years since the launch of AI in Shenzhen. People have been paying a lot of attention to it. It is indeed a direction and an important driving force. But when it comes to a particular enterprise, such as China Telecom, how do we grasp the development opportunities of AI? How do we combine our own resources? How do we actually promote the development of AI?
And in the process of the development of artificial intelligence, it can gain the growth and value of the enterprise. In March this year, when I published my annual performance, and when I was communicating with the media and investors, I said that everyone is very concerned about Tianyu Cloud. Just now, I also focused on PTT, because everyone is concerned.
Again, it lists the political parties and the war. At the same time, in March, I also shared a view with you. That is, Tianyi Cloud has passed the turning point towards intelligent cloud development. So, what is standardization? Standardization is the establishment of the technology and platform of computing transfer platform, which we represent as Xirang.
As you mentioned just now, the integrated computing, service system and capability. This is a more general statement. To put it more simply, the integrated computing, service system and capability is the smart cloud, the smart cloud of China Telecom.
It is the smart cloud that has developed to this stage. It is the smart cloud. It is the smart cloud. The integrated smart service system and capabilities are the smart cloud of China Telecom. It is the smart cloud of China Telecom now. The text is more accurate, isn't it? Since it is a system, what is the system of the smart cloud of China Telecom in the era of artificial intelligence? Let's divide it into five according to grades.
The bottom layer is the S layer. The middle layer is the path layer. The top layer is the data layer, the model layer, and the application layer. These are the five layers of the integrated system. There is a lot of content here, so I won't go into it. As for the S layer, I also talked about this when I answered the question about the Great Leap Forward.
We talked about AIDC. AIDC is actually a physical existence in the S-layer. Many GPU chips we talk about are actually in the S-layer. It is the S-layer at the bottom of the smart cloud system. PAS is our C-ray.
There are model layers, data layers, and application layers. I won't go into the details of the three layers. I will focus on Xirang. Xirang, as a path layer, is the core structure and core capability of the entire smart cloud. What does it do? First, regardless of what kind of computing power you have, regardless of where you are distributed, it can be connected through the integration of cloud and network technologies.
This is the first and the most basic one. We talked about this in March. The second one is Ego computing power. We can efficiently equip all kinds of GPUs and chips and perform efficient computing. The third one is to provide a more economically reasonable tool set for training, modeling, and inference. This is what China Telecom
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So you see, this year, we have invested in two WanCard pools. We have invested in two WanCard pools. We have invested in the AIDC, which forms the standard for two EUs. This is all done internally. Our calculations, this year, we have increased our calculations by 10 billion, and we have achieved a smart calculation of 2.1 billion flops. First, we have joined the XiRang platform.
Tianyi Cloud platform. As for our large-scale models at the mass level, as we mentioned in the presentation, whether it is a technical model or an application model, we are actively publicizing voice-to-speech multi-modal large-scale models and visual large-scale models. There are more applications on it, whether it is 2B, 2C standard, or some internal applications. Let's start from the inside. At the same time, it is a very open system.
to be able to access external computing power, to be able to adapt to a variety of chips, to be able to adapt to a variety of computing models, to be able to adapt to a variety of data ecosystems, to be able to adapt to a variety of models, and to be able to adapt to a variety of applications. I think this is an open ecosystem. For example, in the first half of this year, we have already realized that there are 39 companies with computing power,
and integrate them into our system to provide services to the outside world. In addition, it has 2.2 billion, plus our 2.1 billion, which is more than 4 billion smart computing on top of it. And we are in several cities, within the central enterprises, in universities,
and in some remote areas. I think this is a very good model for the development of intelligence. So this is an opening. This is an opening. So I think this promotes the development of intelligence. That's all I have to say. Because of time constraints, I don't have a lot of specific content. If we have another chance, let's have a deeper conversation. Thank you.
Okay, thank you. Next, we will go back to the audience and see if there are any questions from the media. Okay, please go ahead. Excuse me, I would like to ask a question about the mobile connection satellite service. I would like to know, in China,
The mobile phone satellite is a very good business. At the current stage of development, the number is not so much, but it is a specific group. There are two main groups.
the protection of emergency communication. When there is a traffic accident, in some areas, when the network is interrupted, the mobile phone can be connected directly. Recently, in many places in China, there have been many flood disasters. Mobile phone connected satellite has played a very important role in the process of anti-traffic, emergency, and rescue.
Because it's a mobile phone, its own number, its own mobile phone, it's in its own pocket, right? It's often used, so you take it out and play it, and then everyone outside knows who it is. It plays a very important role. It has a specific group. At the same time, on the other hand, it is a group that can face the high-end. This is the second group.
This high-end group, for example, we have cell phones that connect to satellites. We also have cars that connect to satellites. What's the name of that car? It's a high-end cross-country vehicle. It's a cross-country vehicle, it's not in the city. Maybe it's in the mountains. The scenery is good there. It's also a way of life. So that satellite is a standard.
And there is also a need for coastal islands and mountainous areas. But overall, it is relatively limited in terms of customer groups. In this respect, it is also the most effective way to play the role of mobile inter-satellite. It is not simple. The demand is not so urgent. We still have limited resources.
This is what we are focusing on. Hong Kong has already launched this service. We have already received the code name of the International Electric Cable Company. In the next step, we will cooperate with international operators to develop this service in accordance with their regulatory requirements. The key is to meet the needs of our customers.
At the same time, we will also develop the whole world after the mobile phone and satellite. We also have a lot of good layout and practice. Some things have good effects, such as low-altitude communication. So it is not limited to the satellite communication of high-level generations. We want to develop the whole world. And the development of 6G is also
Thank you. The last question.
Hi, I'm a reporter from SEDAC. Just now, Mr. Ke mentioned a lot about ETH. In addition to the four ETH drops in the first half of the year, the growth rate is also quite large, and we have also joined a lot of partners in ETH. I would like to ask, in the second half of the year and July and August, are you also deploying some new ETH and will the growth rate of ETH continue to be so fast in the future?
And then the second question is, you just mentioned that the number of CAPACS will not change, and the structure will be adjusted. Do you know how much detail will be used in the in-depth layout for 5GA, and what kind of deployment will be done? Thank you. Thank you. This is related to computing power.
This year, our capital expenditure will not exceed 960 billion yuan, or less than 20%. At the same time, the problem of computing power is quite complicated. In the first half of this year, we built two Wanka Ponds. We do not plan to build a few more Wanka Ponds.
First of all, we need to prepare the WAN card pool, the CNG, the training, and the matching. The WAN card pool is not just a pile of 10,000 cards. It is a highly complex system with a high level of science and technology. We did some research with our partners on this and achieved some very good results. But at the same time, we also need to pay attention to
The development of GPUs and smart cards are also moving forward. So we pay more attention to building such a smart cloud system to adapt to all kinds of applications. If we can adapt well to a few chips, the next step is to go to larger applications.
When mature applications and models are clearly displayed, we have the advantage, we have the conditions, and the transformation is faster. This is how we look at computing power. At the same time, we have to play the advantage. After computing power is done, you have to provide some services in the public cloud. This is the role of our brainwashing. I think this is one. The second one is about autonomous driving.
We are mainly concerned about 5G-A. 5G-A is more of a lightweight and software deployment. It doesn't require much capital investment. The key is how we can find, or how we can equip the client with its lightweight deployment. In this regard, we have done a lot of experiments.
There is no need to increase investment in 5G on a large scale in the first half of the year or the second half of the year. It is mainly based on customer needs. And it does not have a big impact on the investment of the entire capital expenditure. Thank you. Thank you for your questions and answers. Due to time constraints, today's press conference will end here. I hope this exchange will be helpful to you. Thank you for your attention and support to China Telecom.
The complete video of this press conference can be viewed at the Shang Zheng Lu Yuan Center. We look forward to seeing you next time. Thank you.