Hong Kong consumers gripped by smartphone upgrade fever as new plans make it easier to switch

PUBLISHED : Tuesday, 17 March, 2015, 10:23am
UPDATED : Tuesday, 17 March, 2015, 6:59pm

Smartphone upgrades in Hong Kong could see a strong jump this year as local mobile network operators entice subscribers to switch devices faster than usual.

Three, the mobile arm of Hutchison Telecommunications Hong Kong, will launch a new programme on Wednesday that allows subscribers to upgrade their iPhones and replace mobile contracts every year under a programme called "Flexi Pass".

It follows the rival "Unbundled Plans" programme announced last month by SmarTone Telecommunications, a subsidiary of Sun Hung Kai Properties.

Jennifer Tan Yuen-chun, the chief operating officer at Hutchison Telecom, said on Monday that Flexi Pass will help Three Hong Kong “attract and retain high-end mobile data customers, while promoting smartphone ownership”.

The programme also breaks away from the traditional binding 24-month contract model, which makes it easier for Three subscribers to upgrade their handsets.

"For just HK$28 a month, customers are now able to return the iPhone 6 or iPhone 6 Plus they bought from Three Hong Kong and buy any new Apple smartphone model between the seventh and 15th month of their contract period," Hutchison Telecom spokesman Raymond Ho Wai-wing said.

Within that designated period, a customer can terminate the old contract and sign up for a fresh contract when purchasing a new iPhone from Three. A subscriber can also opt to break the old contract on its 16th month and replace it with a monthly SIM (subscriber identity module) card plan after returning the smartphone.

Flexi Pass is being offered to new and existing Three Hong Kong subscribers who have bought an iPhone 6 or iPhone 6 Plus model. 

SmarTone is offering 12-month contracts that allow subscribers to buy one of the latest 4G smartphone models, with the option to buy another one within the contract period. Both purchase options carry a significant discount from the smartphones' recommended retail price.

The two Unbundled Plans include a 6-gigabyte data contract for HK$316 a month and another at 10GB for HK$456 a month. These cover popular models from Samsung Electronics, Sony and HTC Desire Eye.

Global smartphone upgrades have been tipped to exceed one billion units for the first time this year, according to a report published in January by London-based Deloitte. Its forecast runs counter to recent predictions that suggested smartphone sales were reaching a plateau as prices of the devices drop, especially in mature markets like Hong Kong.

"Young consumers change devices more often based on performance, features, aesthetic design and social factors," said Hou Po, managing partner at Deloitte's China technology, media and telecommunications industry group.

Deloitte has estimated that more than one billion of the 1.4 billion smartphones that will be sold this year would be bought as upgrades, generating about US$300 billion in sales. It also expected smartphone upgrades to continue increasing through 2018.

Three Hong Kong is counting on Flexi Pass to encourage more of its 2G and 3G mobile subscribers to make the switch to 4G, which encourages more data usage because of faster internet download speeds.

The operator has 3.2 million total subscribers in Hong Kong and Macau. About 65 per cent of its 1.63 million 3G and 4G post-paid customers use smartphones.

Ho said Flexi Pass was focused on the iPhone because the returned smartphones eventually would find their way to the second-hand market, in which Apple's smartphones continue to command high prices.

"Three's international units are now also looking to adopt Flexi Pass," Ho said.

Hutchison Whampoa subsidiary Three Group Europe runs mobile networks in Italy, Sweden, Denmark, Austria, Britain and Ireland. Hutchison Asia Telecommunications runs the Hong Kong conglomerate's mobile operations in Indonesia, Vietnam and Sri Lanka.