SmarTone 1H profit grows 48%

Dylan Bushell-Embling
22 Feb 2012

Hong Kong's SmarTone has reported a 48% increase in 1H12 profit to HK$475 million ($61.2 million), thanks to strong gains in data and other service revenue.

The mobile operator revealed its service revenue grew 31% to HK$2.81 billion for the six months ending in December, with data revenue growing an even stronger 54%.

The company's customer base in Hong Kong grew 12% year-on-year to 1.6 million, with blended ARPU increasing 15% year-on-year to HK$277.

Earnings were also augmented by strong gains in handset and accessory revenue to HK$2.25 billion, up from HK$614 million in the same period a year earlier. SmarTone attributed the result to increasing smartphone adoption.

SmarTone's operating profit from Macau well over doubled to HK$42 million, with revenue growing 35% to HK$179 million.

In its interim report, the operator revealed it is well underway to completing a network modernization project to upgrade to multi-mode bas stations by the middle of the year.

In early February, SmarTone revealed it would stop offering unlimited data plans in response to new regulation restricting the use of FUPs in services advertised as unlimited.

But the operator later reversed course after rivals CSL and 3 revealed they would stick with unlimited plans, only providing lower priority access for customers exceeding 5GB of usage per month.

Earlier this week, SmarTone revealed it would allow customers who chose to renew or stack existing unlimited contracts before the new tariffs came into effect a chance to void the deals, return any handsets acquired from the contract and be refunded.

But despite the move, CEO Douglas Li said in an earnings call that he felt no need to apologize to customers for the about face, The Standardreported. He also called CSL and 3 “desperate” and “shortsighted” for sticking with unlimited plans, suggesting that they'll start feeling the financial pain before SmarTone does.

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