SmarTone profit surges on data boom

Dylan Bushell-Embling
Hong Kong's SmarTone Telecommunications more than doubled its profit for the year ending in June, on the back of strong subscriber growth and smartphone sales.
The company, which operates in Hong Kong under the SmarTone-Vodafone brand, reported a profit for the year of HK$754 million ($96.8 million), from HK$295 million a year earlier.
Revenue grew 68% to HK$6.6 million. Handset and accessory sales rose threefold to HK$2 million, in a trend the operator attributed to increased adoption of data-centric smart devices.
Reflecting this trend, data services revenue surged 81%, and now represents just under half of the company's total service revenue.
SmarTone's subscriber base in Hong Kong increased 17% to 1.5 million, of which 71% were postpaid customers. Blended ARPU grew 15% to HK$249, while the postpaid churn rate improved by 1%.
But operating expenses grew 15% to HK$2 billion, as the company invested in fully upgrading its HSPA+ network to 42Mbps.
SmarTone is also currently upgrading its network to use multi-mode multi-band base stations, as a precursor to an eventual LTE rollout.
The operator has decided to use the 1800MHz band for LTE. Regarding the timing, SmarTone said in its annual report that it will wait to deploy until “we consider that technology and its ecosystem to be mature enough for our customers.”
Subsidiary SmartOne Macau launched HSPA+ services at the start of the financial year, and said initial response has been encouraging.