SHANGHAI, Aug. 23 -- CHINA Netcom Group Corp (Hong Kong) Ltd, the nation's second-largest operator of fixed-line phone services, said first-half profit rose on a one-time gain and an increase in high-speed Internet subscribers.

Net income climbed to 5.9 billion yuan (US$777 million), from 5.8 billion yuan a year earlier, the Beijing-based company said yesterday in a statement to the Hong Kong stock exchange. The company said it had a gain of 624 million yuan from selling assets to its parent. Sales added 0.4 percent to 40.7 billion yuan.

Chairman Zhang Chunjiang expanded high-speed Web services and Internet television to attract users after growth in fixed-line subscribers slowed. Wireless operators signed up 10 times as many users as Netcom and bigger rival China Telecom Corp in the first six months of the year after cutting prices.

Broadband is "the only road they can go down, with mobile-phone tariffs coming down to fixed-line levels," said Francis Cheung, head of Asian telecom research at CLSA Ltd in Hong Kong. He rates the shares "underperform."

Six analysts in a Bloomberg News survey had a median profit estimate of 5.6 billion yuan.

China gained 4.9 million fixed-line users in the first six months of the year, compared with 40.6-million mobile additions, according to government statistics. At the end of June, China had 372.7 million fixed-line customers and 501.7 million wireless-phone subscribers.