Hutchison revenue fall hits profits

Peter Wong, chief executive and group managing director of Hutchision TelecomHutchison Telecom, the Hong Kong-based telecom arm owned by Li Ka-Shing, said net profit for the first half grew moderately by 2% year on year to HK$572 million ($10.2 million). But revenue fell 9% to HK$6.149 billion (€600 million).
Mobile service revenue declined 3%, while revenue from handset sales plunged as much as 28%.
Peter Wong, chief executive and group managing director of Hutchison Telecom, blamed a lack of “star handsets” launches in the period, as well as the completion of a transition to a nonsubsidised handset business model.
“This is just temporarily and we expect there will be more new popular handset models being launched later this year,” Wong told a media conference yesterday.
As a result blended ARPU of post-paid users fell by HK$5 to HK$208 per month. Yet APRU of 4G users was up 50% from 3G, Wong noted.
Wong expects growth in APRU as more users switch to high-speed 4G handsets.
During the first half, the company had over 3.78 million mobile customers in Hong Kong and Macau, of which over 3.4 million were using 3G and LTE services. Among the 3G and 4G postpaid subscribers, 61% were using smartphones.
Responding to government’s recent comment about the proposal to re-auction 3G spectrum licenses when they expire in 2016, Wong said he was “surprised” by the government’s decision.
He said the network technical report commissioned by the government has been conducted hastily without comprehensive industry consultation and transparency.
“We urge the government to reveal the findings of the report as soon as possible when a final decision is to be made, and consider the views of the public and the telecoms industry,” he said.
Despite the decline in mobile business, fixed-line revenue, however, rose 12% to HK$1.927 billion, due to strong growth in carrier market and corporate market.
Revenue from carrier market grew by 17% to over HK$1 billion, representing 55% of the company’s fixed-line revenue.
Corporate and business market revenue rose by 16% to HK$493 million, while residential market revenue increased by 5% to HK$301 million. The former accounted 26% of the company’s fixed-line revenue and the latter 16%.