Hutchison Telecom hit with 26pc fall in interim profit
Company blames lack of popular smartphones to sell, and continued decline in roaming revenue
Hutchison Telecommunications Hong Kong, the city’s second-largest wireless network operator, has seen its hopes of solid first-half earnings dashed by weaker-than-expected mobile sales.
The subsidiary of Li Ka-shing’s CK Hutchison Holdings posted a 26 per cent decline in interim net profit to HK$376 million on Tuesday, down from HK$407 million in the same period last year.
It blamed the result on a lack of popular smartphones to sell, and the continued decline in roaming revenue, according to a filing with the Hong Kong stock exchange.
Total revenue in the first six months fell 52 per cent to HK$5.32 billion from HK$11.02 billion a year earlier.
Nomura noted the company’s management had placed “a fair bit of focus on profitability in the mobile segment” during the period, since the business contributed more than 50 per cent to total service revenue.
In a filing with the Hong Kong stock exchange, Hutchison Telecom reported mobile revenue in the first half dropped 62 per cent to HK$3.47 billion, down from HK$9.24 billion in the same period last year. Net mobile customer service revenue also slipped 6 per cent to HK$1.97 billion, from HK$2.09 billion the previous year, mainly due to the decline in roaming revenue.
Earlier in the year, Hutchison Telecom management had been hopeful that increased mobile data consumption would help boost revenue this year.
“We expect some star handsets to come up in the second half of this year to help drive our hardware revenue,” chief executive Peter Wong King-fai told the South China Morning Post on Tuesday.
“The group is planning ahead cautiously in the face of economic uncertainty locally and globally,” he said.
Technology giant Apple is widely expected to release its new iPhone model in the next few months, following its practice of launching smartphones in the second half each year.
Hutchison Telecom was Hong Kong’s first mobile network operator to introduce Apple’s flagship device in the city, with the release of the iPhone 3G in July 2008.
The company runs mobile services in Hong Kong and Macau under its “3” brand, while fixed-line residential operations fall under the “3Home Broadband” banner.
As of June 30, Hutchison Telecom had 3.1 million mobile subscribers in Hong Kong and Macau.
It also provides sophisticated fixed-line, high-speed Wi-fi, data centre and cloud computing services to the corporate market under the Hutchison Global Communications brand.
Fixed-line revenue in the first half advanced 4 per cent to HK$2.07 billion, from HK$1.98 billion a year ago, which it attributed to growing data demand from over-the-top services, such as Hong Kong broadcaster TVB’s “myTV SUPER” mobile app.