| 14 | PROPERTY, PLANT AND EQUIPMENT |
| Buildings | Telecommunications transceivers, switching centers, transmission and other network equipment |
Office equipment, furniture, fixtures and others |
Total | |||||||||||||
| Million | Million | Million | Million | |||||||||||||
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Cost: |
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As of January 1, 2016 |
129,460 | 1,174,803 | 22,784 | 1,327,047 | ||||||||||||
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Transferred from construction in progress |
8,476 | 172,502 | 2,267 | 183,245 | ||||||||||||
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Other additions |
214 | 2,367 | 287 | 2,868 | ||||||||||||
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Disposals |
(1,048 | ) | (5,017 | ) | (138 | ) | (6,203 | ) | ||||||||
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Assets written-off |
(308 | ) | (58,650 | ) | (2,210 | ) | (61,168 | ) | ||||||||
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Exchange differences |
129 | 262 | 1 | 392 | ||||||||||||
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As of December 31, 2016 |
136,923 | 1,286,267 | 22,991 | 1,446,181 | ||||||||||||
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As of January 1, 2017 |
136,923 | 1,286,267 | 22,991 | 1,446,181 | ||||||||||||
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Transferred from construction in progress |
10,577 | 174,250 | 833 | 185,660 | ||||||||||||
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Other additions |
820 | 962 | 1,193 | 2,975 | ||||||||||||
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Disposals |
(72 | ) | (181 | ) | (109 | ) | (362 | ) | ||||||||
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Assets written-off |
(331 | ) | (38,971 | ) | (1,117 | ) | (40,419 | ) | ||||||||
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Exchange differences |
(141 | ) | (359 | ) | (4 | ) | (504 | ) | ||||||||
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As of December 31, 2017 |
147,776 | 1,421,968 | 23,787 | 1,593,531 | ||||||||||||
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Accumulated depreciation and impairment: |
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|
As of January 1, 2016 |
36,825 | 689,564 | 15,027 | 741,416 | ||||||||||||
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Charge for the year |
5,310 | 129,915 | 2,945 | 138,170 | ||||||||||||
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Written back on disposals |
(446 | ) | (2,336 | ) | (68 | ) | (2,850 | ) | ||||||||
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Assets written-off and impairment loss |
(203 | ) | (51,108 | ) | (1,805 | ) | (53,116 | ) | ||||||||
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Exchange differences |
16 | 186 | 3 | 205 | ||||||||||||
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As of December 31, 2016 |
41,502 | 766,221 | 16,102 | 823,825 | ||||||||||||
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As of January 1, 2017 |
41,502 | 766,221 | 16,102 | 823,825 | ||||||||||||
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Charge for the year |
5,695 | 143,026 | 1,227 | 149,948 | ||||||||||||
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Written back on disposals |
(58 | ) | (45 | ) | (105 | ) | (208 | ) | ||||||||
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Assets written-off and impairment loss |
(299 | ) | (26,465 | ) | (1,068 | ) | (27,832 | ) | ||||||||
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Exchange differences |
(20 | ) | (208 | ) | (3 | ) | (231 | ) | ||||||||
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As of December 31, 2017 |
46,820 | 882,529 | 16,153 | 945,502 | ||||||||||||
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Net book value: |
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As of December 31, 2017 |
100,956 | 539,439 | 7,634 | 648,029 | ||||||||||||
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As of December 31, 2016 |
95,421 | 520,046 | 6,889 | 622,356 | ||||||||||||
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As a result of the optimization of 4G network coverage, the continuing impact of the mobile Internet substitution effect, and particularly, the significant progress of Voice over LTE (“VoLTE”) business services this year, the usage and utilization of the Group’s 2G network has been decreasing rapidly. Meanwhile, due to the further decline of voice tariff, the revenue from voice services dropped even faster and the management anticipates more pressure on the profitability of 2G wireless and related assets (“2G Network Assets”). Therefore, management performed impairment test on the 2G Network Assets as of December 31, 2017. For the impairment testing purpose, the recoverable amounts (note 2(i)(ii)) of 2G Network Assets was determined based on value-in-use (“VIU”) calculations, i.e. the present value of estimated future net cash flows expected to arise from the continuing use of the 2G Network Assets. After considering the historical results, the prevailing market trends and the expected remaining useful lives of 2G Network Assets, the Group has made key assumptions and estimates on the period covered by the cash flow forecast and the estimated future revenue of 2G Network Assets to estimate the present value of future net cash flows applying the pre-tax discount rate of 11%. Based on the impairment test results, the Group recognized an impairment loss of RMB10,450,000,000 for the year ended December 31, 2017 (2016: nil; 2015: nil).