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SmarTone takes on HKT with 5G home broadband

SmarTone has become the latest operator to enter the home broadband market with 5G.

The Hong Kong telco has announced a fixed wireless service that will effectively target incumbent HKT.

Executive director Allen Fung said he did not believe it would affect SmarTone's broadband partnership with the city's biggest fiber broadband player, Hong Kong Broadband.

"We are not targeting everybody," Fung said in an annual results announcement on Wednesday.

The service was aimed at the "20-25% of the market" where customers had either slow or an expensive home broadband service using legacy ADSL.

"If your home already has 1Gbit/s connectivity for HK$150-$300 (US$19.35-$38.71), I don't think we will have an edge at all," he said.

The new service was developed after research that found many customers had only one choice of provider and were paying high fees for poor performance.

The new service will be priced at HK$148 ($19.10) – half the standard HK$298 ($38.45) price charged by HKT.

Fung said the new service offered one source of growth after a "challenging year."

As with other Hong Kong operators, SmarTone was hit hard by the loss of roaming revenue as a result of COVID-19 travel restrictions.

It reported a 24% fall in underlying profit to HK$440 million ($56.8 million) for the 2019-20 financial year.

Total revenue was off 3% and roaming income was down 25% due to "the drastic decline in travel," Fung said. Underlying EBITDA was down 9% to HK$1.63 billion ($210.3 million).

"Excluding roaming revenue, our group service revenue increased 1%," he said, adding that subscriber numbers had grown 6% to 2.7 million and churn was just 0.7%.

Enterprise solutions had become a growth area, increasing in scale by 300% over the past five years. As well as delivering more revenue, the solutions had become important for their ability to "create stickiness with our customers," Fung said.


Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.


Capex increased 15% due to the 5G rollout, but Fung said the total capex over 2020-24 would be approximately the same as the previous five years.

"The outlook for the next six to 12 months is uncertain primarily because it is difficult to predict when roaming and travel will come back," he said.

SmarTone didn't disclose its 5G subscriber numbers, but sales and marketing head Josephine Lam said take-up was ahead of expectations.

The SmarTone 5G network now covers around 80% of Hong Kong and is expected to reach full coverage by mid-2021.

SmarTone is without a CEO following the resignation of Anna Yip in July after four years in the post. Fung said a search firm had been commissioned to find a replacement.

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— Robert Clark, contributing editor, special to Light Reading

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