Hong Kong operator HKT lowered expectations for 5G subscriber uptake, after heavy declines in earnings over H1 due to Covid-19 (coronavirus) lockdown measures.
In a statement, the operator said social distancing measures and travel restrictions resulted in a significant drop in retail visits, reducing handset and business equipment purchases, impacting roaming revenue and slowing private sector ICT projects.
On an earnings call, MD Susanna Hui said it “put on hold many marketing campaigns, which of course affects the pace of take-up” of 5G. Giving a conservative estimate, she said it is targeting 6 per cent to 8 per cent of its subscriber base moving to the service by the end of 2020.
An ARPU uplift of about HKD70 ($9.03) for customers switching to 5G plans helped offset price pressure in the low-end segment: “So, there is some upside in terms of 5G growth.”
Hui added HKT aims to reach 90 per cent coverage by end-September, ahead of the launch of a wider range of 5G smartphones in Q4.
Earnings
Net profit decreased 12 per cent year-on-year to HKD1.9 billion ($245.2 million), on revenue of HKD14.6 billion, down 3 per cent.
A 48 per cent decline in roaming revenue led to an 8 per cent drop in mobile service turnover to HKD3.57 billion, though the figure was flat if roaming was excluded.
Device sales slipped 28 per cent to HKD970 million and its fixed-line business grew 3 per cent to HKD10.4 billion.
Prepaid subscribers declined 16.6 per cent to 1.12 million with post-paid steady at 3.25 million, though ARPU fell 8.6 per cent mainly due to the roaming decline.
It launched 5G in April [1] and had about 100,000 subscribers by end-July.
Capex was 9.5 per cent lower at HKD1.2 billion.
Hui said its 5G rollout plan didn’t require a significant increase in capex and it aims to maintain its capex to revenue ratio at the 9 per cent targeted in its previous guidance.
[1] https://www.mobileworldlive.com/asia/asia-news/hong-kong-trio-vie-for-5g-glory
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