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Wharf Holdings Ltd

Wharf T&T unveils strategy to boost domestic market share after record 2016

PUBLISHED : Monday, 23 January, 2017, 8:01pm
UPDATED : Tuesday, 24 January, 2017, 4:13pm

Telecommunications services provider Wharf T&T plans to increase its sales force, complete its rebranding and develop into a major telecommunications equipment distributor in Hong Kong this year, after posting record revenue of HK$2.04 billion last year.

Wharf T&T, the city’s largest enterprise-focused fixed-line network operator, was also open to becoming a licensed mobile virtual network operator (MVNO) to support its business expansion plans, chief executive Vincent Ma told the South China Morning Post.

Ma presented that strategy on Monday, more than two months after private equity companies MBK Partners and TPG Capital completed their HK$9.5 billion cash purchase of the company from Hong Kong property giant The Wharf (Holdings).

“We aim to grow even faster than before,” Ma said. “Our new investors have helped us formulate our plans for 2017.”

In November, Wharf T&T announced its target to boost domestic market share to 25 per cent from the current 17 per cent and increase annual profit by 50 per cent.

Ma said the company, which has more than 53,000 corporate customers, saw its total turnover last year advance 2.5 per cent to a record HK$2.04 billion, up from HK$1.99 billion in 2015, on the back of steady business growth amid the weak economic environment in Hong Kong.

Earnings before interest, tax, depreciation and amortisation (ebitda) - a measure of a company’s operating performance - rose 8 per cent to US$834 million from HK$772 million in 2015.

Ma pointed out that Wharf T&T’s ebitda margin of 41 per cent last year was higher than the 37 per cent reported by telecommunications market leader HKT earlier this month.

Wharf T&T also posted an 18 per cent increase in operating profit, before deducting interests and taxes, to HK$428 million from HK$362 million in 2015.

Ma said the firm plans to add 20 per cent more staff to its current sales force of about 500 to reach more corporate customers in Hong Kong. At present, its total staff is around 1,600.

“We also expect to announce our new logo and name by late May or early June,” he said.

In the next few weeks, Wharf T&T expects to be named local distributor of enterprise telecommunications equipment from US-based Avaya, in which TPG Capital is a co-owner.

Wharf T&T, which has invested more than HK$6 billion in its infrastructure since 1995, has about 5,300 commercial buildings with fibre-optic connection direct to office desks.

The company’s new owners are committed to more investments, Ma said. Its capital expenditure last year totaled HK$305 million.

Unfazed by competition from MVNO Hong Kong Broadband Network, Ma said Wharf T&T’s main rival was HKT since they both provide information and communications technology solutions to enterprises, “not just commodity data connections”.

Research firm Gartner has forecast spending on communications services in Hong Kong to remain flat at HK$49.62 billion this year.