Hong Kong-based SmarTone claimed to have reached 99 per cent 5G population coverage 13 months after launching the service, but adoption of the premium offering couldn’t stem a drop in post-paid ARPU in fiscal 2021 (ending 30 June).

While the operator didn’t reveal 5G subscriber figures, in a statement it explained the users represented a high-teen percentage of its post-paid base at end-June.

SmarTone added its 5G network covered all underground rail lines, major roads, highways and tunnels in the territory.

Deputy chairman Allen Fung noted the operating environment for the coming months will “remain challenging, but we see new revenue opportunities from the accelerated upgrade of customers to 5G and ramped-up growth in enterprise”.

Chairman Kwok Ping-Iuen warned spectrum expenses are projected to exceed HKD400 million ($51.4 million) in the current fiscal year, as amortisation costs will “rise materially because of the renewal of certain segments of 4G spectrum”.

“We welcome the government‘s recent approach to substantially reduce spectrum fees on 5G. This is critical for Hong Kong, as it allows operators to deploy the necessary financial resources into network building.”

Net profit for fiscal 2021 rose 17 per cent year-on-year to HKD445 million, which the company credited to improved productivity and enhanced network efficiency.

Service revenue fell 5.3 per cent to HKD4.34 billion, as roaming dropped 58 per cent due to Covid-19 (coronavirus) restrictions, accounting for 5 per cent of the service total compared with 12 per cent in fiscal 2020.

Local service turnover was up 2 per cent to HKD4.1 billion; handset and accessory sales fell 1 per cent to HKD2.4 billion.

Its overall subscriber base rose 1 per cent to 2.74 million. Post-paid ARPU fell 6 per cent to HKD199.