HKT seeks to launch 4G services by July

PUBLISHED : Tuesday, 28 February, 2012, 12:00am
UPDATED : Tuesday, 28 February, 2012, 12:00am


HKT Trust and HKT, which owns the largest fixed-line network operator in the city, plans to launch high-speed 4G services before July after posting solid earnings for last year.

'It is our intention to develop our mobile business substantially in 2012,' HKT group managing director Alex Arena said yesterday.

Arena said the availability of new smartphones that could support the company's 4G network based on the standard called long term evolution would determine how quickly the service would be launched over the next few months.

Genius Brand, a joint venture between HKT and Hutchison Telecommunications, won a licence to operate 4G services on a block of 30-megahertz spectrum during the government's spectrum auction in January 2009.

Huawei Technologies is building and deploying that network for the venture.

Arena said HKT's stronger financial position after its listing as the city's first business trust in November last year allowed the company to pursue investments in well-established businesses and pursue further growth.

PCCW, which is controlled by Richard Li Tzar-kai, pocketed HK$9.3 billion from the spin-off of its telecommunications operations into HKT Trust.

Subscribers received so-called share stapled units jointly issued by HKT Trust and operating firm HKT.

'We're firing on all cylinders,' Arena said, noting that earnings results for last year 'exceeded expectations'.

Net profit rose 32 per cent to HK$1.22 billion from HK$925 million in 2010 due to strong gains in both its fixed-line telecommunications services and mobile business, savings from depreciation expenses and net finance costs, and lower tax expenses. Revenue increased 7 per cent to HK$19.82 billion from HK$18.52 billion.

Earnings before interest, tax, depreciation and amortisation (ebitda) - representing net cash flows from the company's operating activities - rose 2 per cent to HK$7.41 billion from HK$7.24 billion in the previous year. That exceeded the forecast HK$7.38 billion ebitda made in HKT's prospectus.

A final distribution of 3.36 HK cents per unit has been recommended by the directors of HKT Management, the business trust's so-called trustee manager.

Chief financial officer Susanna Hui Hon-hing said final distribution was calculated based on the group's so-called adjusted funds flow (AFF), which last year climbed 18 per cent to HK$2.38 billion from HK$2.01 billion in 2010. That also beat the forecast HK$2.35 billion in AFF contained in its listing prospectus.

Arena said the AFF in a business trust was 'a critical factor that the market and in particular, our unit holders, are focused on'.

The AFF is defined as ebitda less capital expenditures, customer acquisition costs and licence fees paid, net finance costs paid, and adjusted for changes in working capital.

HKT Trust dropped 2.2 per cent to close at HK$5.31 in trading yesterday, while PCCW fell 2.3 per cent to finish at HK$2.93. The share stapled unit was offered at HK$4.53 during the initial public offering.