SmarTone’s chairman has warned the corporate must reverse falling income and ARPU, regardless of boosting earnings by 10%.
The firm Thursday reported a full-year web revenue of 525 million Hong Kong {dollars} (US$67 million), with income up 6% to HK$6.60 billion ($840 million) and earnings earlier than curiosity and tax (EBIT) 7% increased.
Nonetheless, a lot of the income progress got here from gross sales of handsets and equipment, which rose 29%.
The opposite components within the increased revenue have been decrease spending – with opex down 6% and capex slashed by 21% – together with increased finance earnings and the influence of a HK$50 million ($6.4 million) amortization write-off final yr.
Service income throughout the core cellular and broadband companies declined 3%, whereas postpaid ARPU dropped by HK$2 to HK$220.
By comparability, its rivals this yr have elevated service income. Hutchison Telecom hiked service income by 6%, principally attributable to roaming, whereas HKT lifted its cellular service gross sales by 5%.
Chairman Raymond Kwok warned the optimistic full-year numbers “masks the severity of the challenges we face. Competitors in our core client postpaid market remained significantly intense.”
Important room for enchancment
“For the long-term well being and sustainability of the corporate, it’s crucial for us to reverse the decline of our complete providers income. It’s equally vital for us to halt the erosion of ARPU,” he stated.
He famous that six years since 5G launched, solely half of the cellular buyer base had upgraded, “leaving vital room for enchancment.”
“These are all clear indicators that we have to take actions to considerably strengthen our enterprise.”
Talking to a outcomes briefing Friday, CEO Fiona Lau issued a measured outlook.
“We don’t count on market situations to grow to be any much less demanding,” she stated.
Lau stated the underlying service income was regular, whereas producing progress from extra non-mobile income streams, together with enterprise options and 5G dwelling broadband. Outbound roaming income had additionally grown 6%.
She stated SmarTone would proceed to make positive factors “in scaling progress in areas past conventional cellular connectivity” and specializing in rising a high-quality buyer portfolio “reasonably than pursuing quantity on the expense of worth.”
“Our technique is to not compete on value alone, however to provide clients clear and tangible causes to maneuver to increased worth plans.”
