HKT net profits grow amid strong competition, subdued economy
Company seeks better policy response from government on 5G spectrum preparation
HKT Trust and its operating arm HKT, which runs Hong Kong’s largest fixed-line and mobile telecommunications infrastructure, reported a 24 per cent increase in net profit for 2016 amid stiff industry competition and a sombre local economy.
Group managing director Alex Arena, however, warned that the city’s economy will remain subdued this year, while the telecommunications industry deals with the Hong Kong government’s “policy malaise” over preparing spectrum plans for 5G services.
“If we don’t have radio spectrum, how can we possibly build a business?” Arena said at a press conference on Friday. “It beggars belief that Hong Kong, which has the most advanced telecommunications network in the world and wants to be the first to go 5G, has a government that is not clearing [the needed] 5G spectrum.”
The government will not release any new mobile spectrum to operators from this year to 2019, same as the past three years.
“We want a better policy response than saying ‘we’re studying it and we’ll wait for the World Radiocommunications Conference in 2019’,” Arena said.
That conference is organised by the International Telecommunications Union, a United Nations agency responsible for designating 5G standards.
HKT on Tuesday called on the government to release new spectrum in the 3.5 gigahertz and 700-megahertz bands for 5G.
Its net profit last year reached US$627 million, up from US$506 million in 2015, on the back of a 5 per cent year-on-year increase in mobile services revenue to US$1.236 billion.
Earnings before interest, tax, depreciation and amortisation – representing net cash flows from the company’s businesses – advanced 5 per cent from a year ago to US$1.626 billion.
Total revenue was down 3 per cent to US$4.339 billion, compared with US$4.452 billion in 2015, due to the absence of “marquee” smartphones to sell last year.
Adjusted funds flow, which is the measure by which the cash distribution of HKT’s share stapled unit holders is based, rose 14 per cent year-on-year to US$600 million.
HKT’s total mobile subscribers reached 4.512 million at the end of December, of which 3.130 million were post-paid customers.