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SmarTone is facing increased competition for local rivals who have overtaken the once largest Hong Kong network operator. Photo: Sam Tsang

Hong Kong mobile network operator SmarTone names new CEO amid severe challenges

Mobile network operator SmarTone Telecommunications has named its long-standing chief technology officer, Stephen Chau Kam-kun, as the company's interim chief executive.

The appointment follows the announcement made in April by SmarTone founding chief executive Douglas Li, aged 61, to step down from his role.

Chau, 54, told the South China Morning Post on Monday that he will serve as chief executive from September 1 "for a period of 12 months, or as soon as a permanent CEO has been identified".

In a regulatory filing on Monday, SmarTone said Chau joined the company in 1993 as head of operations and was promoted to CTO in 1999.

Prior to his appointment as interim chief executive, Chau was named as one of the firm's executive directors.

"Chau's leadership has shaped the company's technological innovations, impacting all areas of business operations and establishing sustainable competitive advantages," SmarTone said in its filing.

"Chau also oversees the evolution of the company's industry leading customer management and support systems."

Chau previously worked for more than six years at the old Hong Kong Telecom CSL organisation, responsible for radio network planning and development.

From 1995 to 1996, Chau was a member of the radio spectrum advisory committee under the old Office of the Telecommunications Authority, now known as the Office of the Communications Authority (Ofca).

SmarTone, a subsidiary of Sun Hung Kai Properties, will need the veteran savvy of Chau in the chief executive's role at a time when the company has turned from one of Hong Kong's biggest mobile operators to its smallest, after PCCW's HKT acquired rival CSL New World Mobility for US$2.43 billion last year.

At the Hong Kong government's 3G spectrum auction in December, SmarTone spent HK$970.4 million (US$125.1 million) to acquire a total of 19.8-megahertz of spectrum -- representing the radio frequency bands over which mobile network services are provided.

"We expect mobile-centric SmarTone to be the key beneficiary of improving mobile trends in Hong Kong," Anand Ramachandran, the head of Barclays' telecommunications, internet and media equity research for Asia, excluding Japan, said in a recent report.

Unlike HKT and Hutchison Telecommunications Hong Kong, SmarTone does not operate a broad fixed-line network business in the city.

"Since HKT's acquisition of CSL, pricing power is returning to operators as reflected in rising mobile tariffs across all tiers for bundled and SIM-only plans," Ramachandran said.

SmarTone shares were down 5.55 per cent to close at HK$12.60 on Monday amid a general downward trend in the Hong Kong market.

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