UPDATE 1-China Telecom Q1 net down, but reverses Q4 loss

* China Telecom Q1 returns to profit

* Mobile service customers in Q1 up a net 4.93 million (Adds company comments and share price)

HONG KONG, April 20 (Reuters) - China Telecom Corp (0728.HK), the country's dominant fixed-line phone company, said on Monday its first quarter net profit fell 27 percent due to intense market competition and the impact of the global financial crisis.

But the telecom firm reversed hefty losses of 16.4 billion yuan recorded in the fourth quarter on provisions for its low-end wireless services PHS.

China Telecom posted net profit of 4.7 billion yuan ($688 million) for the three months ended March, against 6.47 billion yuan a year earlier on a continued decline in its traditional wireline voice services.

Operating revenues rose 15 percent to 50.9 billion yuan for the reported period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 3.8 percent to 22.2 billion yuan and EBITDA margin decreased to 43.6 percent from 52.1 percent the previous year.

China Telecom said although its strategy of effective scale development of its mobile service will lead to short-term pressure on its overall profitability, it would significantly enhance the firm's long-term development and value creation.

It posted a net increase of 4.93 million customers in its mobile service in the first quarter of 2009, reversing a decline in the fourth quarter when it acquired the CDMA business.

The company also added a net 2.5 million subscribers to its wireline broadband service to 46.77 million at the end of March.

The stock ended Monday morning up 1.4 percent at HK$3.54 and has climbed 22.5 percent this year, outperforming the blue chip Hang Seng Index .HSI, which has risen 9.6 percent so far this year. ($1=6.833 Yuan) (Reporting by Alison Leung; Editing by Jacqueline Wong)