Hong Kong Telecommunications Report Q4 2010
Includes 3 FREE quarterly updates
BMI’s Q410 Telecommunications Report on Hong Kong contains updated forecasts and analysis of recent market trends following the publication of latest market data by Hong Kong’s telecoms regulator, the Office of the Telecommunications Authority (OFTA) and some of the service providers. The regulator published figures for the number of mobile subscribers at the Q110, allowing us to provide a more accurate picture of the position of the country’s five mobile network operators, of which three, Hutchison 3G, SmarTone and PCCW Mobile, had published operational and financial figures for the first half of 2010. Furthermore, OFTA also released June 2010 data for both the fixed-line and broadband sectors, which allowed us to reflect on our forecasts through to the end of 2014.
According to the regulator, there were 12.688mn mobile subscribers in the sector by April 2010, reflecting growth of 8.8% year-on-year (y-o-y). The strong performance, which exceeded BMI’s expectations as expressed in our previous quarterly update, was driven by increased subscriber uptake in the latter part of 2009 and in the first quarter of 2010. Net additions in the first three months of 2010 were about 69% more than was recorded during the same period a year earlier. However, it is noteworthy that as much as 22.6% of the total prepaid subscriber base was considered inactive. The considerable number of inactive prepaid users and dual SIM card owners in the country has resulted in high a mobile penetration rate, which stood at of 173% at the end of 2009. Meanwhile, Hong Kong operators continue to report strong growth in the number of postpaid and 3G subscribers. According to OFTA, Hong Kong had 4.467mn 3G subscribers at by April 2010, reflecting an impressive y-o-y growth of 50% since April 2009. 3G subscriptions accounted for 35.2% of total mobile market, up from 31.3% at the end of 2009. The results for the total mobile subscriber base in the first quarter of 2010 led us to revise upwards our 3G forecast to 2014, reaching close to a penetration rate of 98%.
As for the latest regulatory data, the number of fixed telephone lines increased to 3.665mn by June 2010, up from 3.684mn as of March 2010 and 3.680mn as of June 2009. However, it was down from 3.668m at the end of 2009. During 2009, the number of lines contracted by 1.2%. Although Q110’s performance reflected a decline in fixed lines, in line with 2009’s performance, it remains difficult to say whether this rate of decline marks the start of a period of accelerated decline given the marginal uptick in Q210. It is noteworthy that growth in fixed-line subscriptions is driven by business subscribers. Residential lines continued to decline in Q210, following the same pattern observed in previous quarters. There was an increase in residential VoIP customers. However, this was not the case for business VoIP, which declined. According to the regulator, Hong Kong had 2.080mn broadband subscribers at the end of Q110 (latest data available), reflecting 20,000 net additions in the first quarter, up from 2.060mn subscribers. With penetration rates at more than 29%, BMI predicts that the sector will experience a slowdown in growth over our forecast period ended 2014.
BMI’s Q410 Telecommunications Report on Hong Kong contains updated forecasts and analysis of recent market trends following the publication of latest market data by Hong Kong’s telecoms regulator, the Office of the Telecommunications Authority (OFTA) and some of the service providers. The regulator published figures for the number of mobile subscribers at the Q110, allowing us to provide a more accurate picture of the position of the country’s five mobile network operators, of which three, Hutchison 3G, SmarTone and PCCW Mobile, had published operational and financial figures for the first half of 2010. Furthermore, OFTA also released June 2010 data for both the fixed-line and broadband sectors, which allowed us to reflect on our forecasts through to the end of 2014.
According to the regulator, there were 12.688mn mobile subscribers in the sector by April 2010, reflecting growth of 8.8% year-on-year (y-o-y). The strong performance, which exceeded BMI’s expectations as expressed in our previous quarterly update, was driven by increased subscriber uptake in the latter part of 2009 and in the first quarter of 2010. Net additions in the first three months of 2010 were about 69% more than was recorded during the same period a year earlier. However, it is noteworthy that as much as 22.6% of the total prepaid subscriber base was considered inactive. The considerable number of inactive prepaid users and dual SIM card owners in the country has resulted in high a mobile penetration rate, which stood at of 173% at the end of 2009. Meanwhile, Hong Kong operators continue to report strong growth in the number of postpaid and 3G subscribers. According to OFTA, Hong Kong had 4.467mn 3G subscribers at by April 2010, reflecting an impressive y-o-y growth of 50% since April 2009. 3G subscriptions accounted for 35.2% of total mobile market, up from 31.3% at the end of 2009. The results for the total mobile subscriber base in the first quarter of 2010 led us to revise upwards our 3G forecast to 2014, reaching close to a penetration rate of 98%.
As for the latest regulatory data, the number of fixed telephone lines increased to 3.665mn by June 2010, up from 3.684mn as of March 2010 and 3.680mn as of June 2009. However, it was down from 3.668m at the end of 2009. During 2009, the number of lines contracted by 1.2%. Although Q110’s performance reflected a decline in fixed lines, in line with 2009’s performance, it remains difficult to say whether this rate of decline marks the start of a period of accelerated decline given the marginal uptick in Q210. It is noteworthy that growth in fixed-line subscriptions is driven by business subscribers. Residential lines continued to decline in Q210, following the same pattern observed in previous quarters. There was an increase in residential VoIP customers. However, this was not the case for business VoIP, which declined. According to the regulator, Hong Kong had 2.080mn broadband subscribers at the end of Q110 (latest data available), reflecting 20,000 net additions in the first quarter, up from 2.060mn subscribers. With penetration rates at more than 29%, BMI predicts that the sector will experience a slowdown in growth over our forecast period ended 2014.
Contents
Executive SummarySWOT Analysis
Hong Kong Wireline SWOT
Hong Kong Mobile SWOT
Hong Kong Political SWOT
Hong Kong Economic SWOT
Hong Kong Business Environment SWOT
Business Environment Ratings
Asia
Hong Kong
Industry Forecast Scenario
Mobile
Table: Telecoms Sector – Mobile – Historical Data & Forecasts
ARPU
Table: Telecoms Sector – Mobile ARPU – Historical Data And Forecasts (HKD)
Fixed Line
Table: Telecoms Sector – Fixed-Line – Historical Data And Forecasts
Internet
Table: Telecoms Sector – Internet – Historical Data And Forecasts
Market Data Analysis
Mobile
Table: Hong Kong Mobile Market (2G & 3G), December 2009
Subscriber Mix And ARPU
3G
Table: Hong Kong Mobile Market (3G), June 2010
Mobile Contract Wins
Table: Mobile Contract Wins
Mobile Content
Regional Outlook
Table: Asia Mobile VAS Market By Service, 2009 (US$bn)
Country Outlook
HSDPA
Mobile TV
Mobile Banking/Finance
Value-Added Services Timeline
Table: Selected VAS Services
Mobile Operator Data
Table: Hong Kong Mobile Market Overview
Table: CSL New World Mobility
Table: Hutchison 3G
Table: SmarTone
Table: PCCW Mobile
Fixed Line
Table: PCCW Fixed-Line Service Revenue Breakdown (HKDmn)
Fixed-Wireless Access
Internet
FTTH
WiMAX
Wireline Contract Wins
Table: Wireline Contract Wins
Regulatory Environment And Industry Developments
Tables: Hong Kong Regulatory Bodies And Their Responsibilities
Licensing
Spectrum
Interconnection
Regulatory Developments
Industry Developments
Competitive Landscape
Key Players
Table: Key Players – Hong Kong Telecoms Markets
Table: Selected Operator Financial Parameters, 2003-2008
Company Monitor
Cisco Systems
Table: Cisco Systems: Overall Financial Performance (US$bn)
Table: Cisco Systems: Major Contracts Awarded In Asia (2010)
Company Profiles
Hutchison Telecommunications Hong Kong Holdings (HTHK)
PCCW-HKT
CSL New World Mobility
SmarTone Telecommunications
Regional Telecommunications Penetration Overview
Fixed Line
Table: Regional Fixed-Line Penetration Overview
Mobile
Table: Regional Mobile Penetration Overview
Broadband
Table: Regional Broadband Penetration Overview
Country Snapshot: Hong Kong Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2005-2012
Glossary Of Terms
Table: Glossary Of Terms
BMI Methodology
How We Generate Our Industry Forecasts
Table: Key Indicators For Telecommunications Industry Forecasts
Telecoms Business Environment Ratings
Risk/Reward Ratings Methodology
Table: Ratings Indicators
Weighting
Table: Weighting Of Indicators
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