SmarTone Telecommunications is expecting less capital expenditure on its broadband business this year after the venture incurred a half year HK$113 million loss, according to Vivian Lau, director of broadband services.
SmarTone Broadband, a wholly owned subsidiary of SmarTone Telecom, slashed 58 staff last week amid a weaker-than-expected demand for its broadband service.
'Our business objective now is to save costs and shorten the pay-back period. We want to stay close to market developments to avoid over-investment,' Ms Lau said.
The SmarTone broadband service, launched nine months ago, has attracted a customer base of 4,500 - far short of its original plan. By offering residential users a monthly plan of HK$168 or HK$238, SmarTone is estimated to receive less than HK$10 million in revenue, a tiny portion of the promised investment of at least HK$144 million, in its first year of operation.
'We incurred large amounts of investment to get the network going, but we now have learnt to do more with less capital resources.' said Ms Lau, declining to disclose the company's monthly operating cost.
She said the company would adjust its expenditure budget in accordance with how much competitors spend on their broadband investments, stressing competitors were likely also to be cautious in their budgets.
