Hutchison Telecom 1H net dives 44% on weak mobile business

Fiona Chau
31 Jul 2014

Hutchison Telecommunications Hong Kong saw its first-half net profit tumble 44% year on year to HK$323 million ($41.7 million) due to deterioration in the mobile market.

Mobile service revenue for the first six months ended June 30 fell 11% to HK$2,348 million, as more customers signed up to lower-tier service plans and demand for mobile voice service decreased.

EBITDA and EBIT declined 35% and 53% to HK$614 million and HK$308 million respectively, due to additional capex funding for the 4G LTE network.

The results reflected continued intense price competition for the mobile business during the period and the weakened market response to smart mobile devices launched in recent months, the Hong Kong-based telco said.

As of June 30, the company was serving 3.6 million mobile customers in Hong Kong and Macau, 200,000 users less than at the end of 2H13.

The company blamed the decrease in customer numbers on higher churn of lower-tier customers. The churn rate of postpaid customers was 1.8% during the period, compared with 1.9% a year ago.

Blended ARPU (of postpaid customers) down 5.3% to HK$197 from compared with HK$208, due to slower smartphone adoption and customers being more cautious in choosing their tariff plans.

Hutchison Telecom chief executive officer and group managing director Peter Wong said the outlook for the second half remains challenging but the company expects the performance of the mobile business to improve gradually in the second half.

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