[3 Hong Kong] Hutchison Telephone Hong Kong: World PLAN Package Enhanced to Attract Roaming Demand, Industry to Explore Northern Metropolis Development with Government

Hutchison Telecommunications Hong Kong (00215)
Roaming service revenue reached HKD 855 million, up 31% year-on-year. Executive Director and CEO He Wai-wing explained that the growth was mainly due to strong outbound travel demand from Hong Kong users; the personal “World Plan” packages increased data usage for roaming; plus, the wholesale roaming prices and services obtained through three overseas brands were competitive, successfully attracting more users.

“World Plan” Upgraded with Travel Insurance and Cross-border Transportation

He Wai-wing mentioned that the “World Plan” market response has been very positive, so they updated and enhanced the service plans. Some “World Plans” now include free value-added services, such as 24 months of travel insurance or 24 cross-border bus tickets, with limited-time offers including tickets to Shenzhen indoor ski resort and direct shuttle bus, aiming to capture outbound travel demand from Hong Kong residents.

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Assessing Geopolitical Impact, Easter Travel Demand Remains Strong

When asked whether escalating tensions in the Middle East would affect short-term roaming performance, He Wai-wing said that usage in affected Middle Eastern regions has been impacted, and they are evaluating data changes in other regions. However, most Easter flights are fully booked, so the impact does not seem as severe as expected. They will continue to monitor the situation.

Responding to Telecom Price Wars, Focus on Value-added Services and Personalization

Recently, telecom companies have launched price wars again. He Wai-wing stated that the market competition is very fierce, and competitors are strong. The company will adapt to market trends. He believes consumers can benefit from these trends, but excessive price competition may not be healthy for the market. PCCW Hong Kong has always aimed to rely not just on pricing but also on a variety of value-added services and personalized, thoughtful experiences to benefit the brand.

Proactively Deploying Northern Base Stations to Resolve MTR Network Barriers

The Hong Kong government is actively developing the Northern Metropolis. Liang Bing-yiu, President of Technology and Operations Transformation at PCCW Hong Kong, said that the industry is currently discussing with government departments about building base stations in the northern district and future development plans. He explained that while 3 Hong Kong covers over 99% of Hong Kong, the development in the north involves land where existing base stations are located. The industry needs to discuss how to reset and deploy higher-density base stations to meet future population needs. Liang also mentioned that the company previously resolved the “network barrier” issue between MTR’s Tuen Ma Line from Hin Keng to Tsuen Wan West, which increased data usage on that segment by 52%.

Healthy Financials, Stable Capital Expenditure, and Review of Dividend Policy

Hutchison Telecommunications Hong Kong maintained stable capital expenditure of HKD 430 million last year. CFO Wu Ju-kang expects this year’s capital expenditure to remain around HKD 400-500 million, mainly for strengthening network infrastructure and IT services. Wu stated that PCCW Hong Kong is well-capitalized with no debt, has healthy free cash flow, and the HKD 110 million from the sale of assets in Macau will be used for operations. Although last year the company recorded losses, dividend payments remained stable. He reaffirmed that as the company’s cash position and profitability improve, the board will review the dividend policy.

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