"We expect the economic slowdown to be the key overhang on the entire industry in upcoming quarters," UBS analyst Jinjin Wang said.

China Telecom (0728) lost 430,000 customers on its CDMA mobile service in November, bringing its total mobile subscriber base down to 28 million.

China Mobile (0941) added 6.87 million new mobile customers during the month, down 4.5 percent from new additions in October. China Unicom (0762) added 996,000 in November, down 18.3 percent from the month before.

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Recent statistics from the Telecommunication Administration Bureau of Guangdong show the number of mobile subscribers in the province fell by 160,000 in October. Wang said a key factor in the drop was migrant workers returning home, as many have lost their jobs.

Mainland media reported recently that more than 14 percent of the 14,000 foreign-owned factories in Dongguan have shut down or declared bankruptcy.

Macquarie analyst Tim Smart expects the slowing economy to continue to hit the number of new subscribers added by China Mobile. "We believe the economic slowdown has put pressure on user growth since October, when Guangdong and Zhejiang provinces saw the first-ever decline in mobile subscribers," Smart said.

Subscriber declines in eastern China have been paired with an increase in subscriber additions in central and western China, where many of the jobless migrant workers are returning. But this trend could signal downside risks to operators' average revenue per user, a measure of pricing power, Wang said.

"Subscriber declines in developed eastern regions could pull down total revenue as this region contributes a major part of the income," Wang warned.

China's Minister of Industry and Information Technology Li Yizhong was recently quoted by mainland media as saying the telecoms regulator targets an overall 6 percent revenue growth for the sector in 2009.

This target indicates a continuous slowdown from the MIIT's reported figures of 12 percent annual revenue growth for 2005-2008, Goldman Sachs analyst Helen Zhu said.

"We think this comment foreshadows potential for revenue trends to further weaken," Zhu said.

China Telecom's 2009 net profit may fall 11.7 percent year on year to 19.95 billion yuan (HK$22.54 billion), according to the average estimate of 24 analysts surveyed by Thomson Reuters.

Zhu recommended investors pick telecoms engineering firm China Communications Services (0552), a beneficiary of operators' capital expenditure, rather than the operators themselves, because CCS has better earnings prospects.