Earnings reports


Hutchison Telecom predicts 4G boost to mobile data consumption

Company had 3.03 million mobile subscribers in Hong Kong and Macau at end of last year

PUBLISHED : Monday, 29 February, 2016, 8:05pm
UPDATED : Monday, 29 February, 2016, 8:05pm

Hutchison Telecommunications Hong Kong, the city’s second-largest wireless network operator, expects mobile data consumption by subscribers to grow this year as more of them upgrade to 4G services.

Chief executive Peter Wong King-fai presented that upbeat outlook on Monday, following the company’s announcement of solid earnings last year.

Hutchison Telecom, a subsidiary of billionaire Li Ka-shing’s CK Hutchison Holdings, runs mobile services in Hong Kong and Macau under its “3” brand, while fixed-line residential operations fall under 3Home Broadband.

As of December 31, Hutchison Telecom had 3.03 million mobile subscribers in Hong Kong and Macau.

The company also provides sophisticated fixed-line, high-speed Wi-fi, data centre and cloud computing services to the enterprise market under the Hutchison Global Communications brand.

In a filing with the Hong Kong stock exchange on Monday, Hutchison Telecom reported a 10 per cent rise in net profit last year to HK$915 million, up from HK$833 million in 2014, mainly driven by strong mobile revenue.

We prefer to be a value leader [in mobile services] rather than a price leader
Peter Wong, Hutchison Telecom

Consolidated revenue last year grew 35 per cent to HK$22.04 billion, from HK$16.29 billion in 2014, due to an increase in hardware sales.

Earnings before interest, taxes, depreciation and amortisation advanced 4 per cent to HK$2.79 billion, compared with HK$2.68 billion in 2014.

Mobile business revenue jumped 46 per cent to HK$18.48 billion, from HK$12.63 billion in 2014, on the back of demand for popular 4G smartphones like those from Apple and Samsung Electronics.

Fixed-line services revenue decreased 3 per cent to HK$3.97 billion, compared with HK$4.10 billion in 2015, primarily due to a drop in international direct dial calls.

Hutchison Telecom estimated that the average monthly 4G data usage per subscriber last year reached 2.5 gigabytes, up from 2GB a month in 2014, on steady upgrades to 4G by its existing 3G and 2G customers.

“We prefer to be a value leader [in mobile services] rather than a price leader,” said Wong, who declined to comment on the company’s pricing for tariff plans and handset sales this year.

Wong said the company was on track with “re-farming” its 900-megahertz spectrum to 4G services this year, which would improve indoor mobile coverage for subscribers.

Hutchison Telecom’s shares finished at HK$2.62 on Monday, unchanged from last Friday’s closing price.