SmarTone targets 3G sector as fall in roaming business hits profits
As SmarTone's roaming business declines and interim net profit slips, it looks to boost its business in the 3G network sector to make up
SmarTone Telecommunications, which saw its interim net profit decline by 3 per cent, aims to target more lower-spending 3G network users to offset falling roaming revenue and stiff price competition in Hong Kong's 4G mobile market.
"We're targeting customer segments previously underserved by SmarTone," chief executive Douglas Li said yesterday.
SmarTone, a subsidiary of Sun Hung Kai Properties, posted net profit for the six months ended December 31 of HK$459.4 million, down from HK$475.3 million a year earlier. It attributed the fall in profit to a significant reduction in international mobile roaming traffic caused by sluggish global economic activity. In addition, the costs of depreciation and handset subsidy amortisation rose significantly during the period, the company said.
Despite those factors, SmarTone's interim revenue grew 16 per cent to HK$5.89 billion from HK$5.06 billion the previous year. Earnings before interest, tax, depreciation, and amortisation (ebitda), a measure of a company's operating profitability, climbed 9.2 per cent to HK$1.54 billion from HK$1.41 billion, despite local competitors cutting their prices on high-speed 4G mobile services and lower roaming revenue.
SmarTone's total customer base swelled 7 per cent to 1.74 million at the end of December. "About 60 per cent of subscriptions during the period represented new customers, while 20 per cent were customers upgrading from lower-priced plans," Li said.