Hong Kong operator HKT reported a modest increase in its 2017 profit but consolidated revenue fell as a sharp drop in handset revenue led to a decline in mobile turnover, offsetting gains in its fixed-line business.
The company’s net profit rose 4 per cent from 2016 to HKD5.1 billion ($652 million) in 2017. Total revenue fell 2 per cent year-on-year to HKD33.3 billion as an 8 per cent drop in mobile revenue to HKD12 billion offset a 2 per cent increase in fixed services revenue (voice and data) to HKD21.8 billion. While mobile service revenue was flat during the year at HKD9.6 billion, handset sales fell 31 per cent to HKD2.36 billion.
HKT group MD Alex Arena said the company clearly demonstrated its operational resilience and ability to fend off aggressive price competition, noting “we are cognizant that the telecoms market is likely to see further bouts of competitive behaviour”.
Its mobile unit CSL’s market share dropped 2 percentage points to 33.4 per cent at end 2017 as subscriber numbers fell 2 per cent to 4.4 million. Prepaid subscribers fell 14 per cent to 1.2 million and post paid subs rose 3 per cent to 3.2 million. Post paid ARPU was flat year-on-year at HKD232.
The operator said it witnessed an increase in the proportion of handset bundled subscriptions as customers took up new offerings, which increased its related customer acquisition and retention costs for the year.
Capex dropped nearly 8 per cent from 2016 to HKD2.66 billion as spending on mobile networks declined following the completion of an integration of CSL in 2016 (it acquired CSL from Telstra in May 2014). But the company said spending on its fixed-line networks grew to meet the continued demand for fibre broadband connectivity and IoT-related services. The ratio of capex to sales fell to 8 per cent in 2017 from 8.5 per cent in 2016.