HKT, the largest mobile operator in Hong Kong, posted strong profit growth in the first half of 2019, despite consolidated revenue sliding as handset sales dropped sharply and its core business sectors recorded modest gains.
Its net profit for the January to June period rose 16 per cent year-on-year to HKD2.16 billion ($275 million) due to improved operating efficiencies, the operator said.
Mobile service revenue inched up 1 per cent to HKD3.88 billion, driven by 4 per cent growth in roaming revenue, which HKT credited to increased adoption of affordable roaming data passes.
Mobile product sales dropped 60 per cent to HKD1.34 billion, reflecting the continued lengthening of the handset replacement cycle, especially in view of the pending arrival of 5G devices, the company said.
Fixed and broadband turnover was also up 1 per cent to HKD10.2 billion.
HKT MD Susanna Hui said in 2019, Hong Kong witnessed a significant slowdown in economic growth and a challenging environment for businesses: “The outlook of the economy is subject to a high degree of uncertainty because of events taking place internationally and locally. We will cautiously develop our new businesses, which from relatively small bases will in time provide additional momentum for growth.”
Prepaid subscribers grew 25 per cent to 1.35 million, with post-paid flat at 3.25 million. Post-paid ARPU increased 1.5 per cent to HKD198.
The number of Tap & Go e-wallet customers increased 19 per cent to end June at 2.09 million.
Hui said HKT welcomed a government decision to set lower reserve prices for mid-band 5G spectrum, which will create a more conducive environment for the industry to introducing 5G for commercial use.
“We are making preparation to roll out innovative 5G services next year when the handsets, applications and content are in place.”
H1 capex was down slightly at HKD1.33 billion, with the 35 per cent allocated to mobile focused on capacity expansion to support data traffic growth and prepare for its 5G rollout.