BMI's Executive Summary

[TOP]

The Sector At A Glance

Key Insights On The Telecomunications Sector of Hong Kong

Hong Kong's mobile market has not yielded any significant surprises this quarter. It remains the region's most developed mobile industry by penetration rate, 133% as of end 2006. This places it well ahead of other mature markets Japan, Taiwan and Australia.

As would be expected of a market as saturated as Hong Kong, mobile subscriber growth has been limited. According to data provided by Hong Kong's Office of the Telecommunications Authority (OFTA), there were just 141,000 net additions between the end of 2006 and May 2007, bringing the total base to 9.585mn customers. This is an improvement on the declines witnessed in the first two months of the year, led by operators deactivating inactive pre-paid SIM cards. However, operators are now looking not necessarily for subscriber growth but rather for an increase to revenues, which they have found through the healthy level of demand being seen for 3G services.

Hutchison's '3', Hong Kong's leading 3G mobile operator only offers 3G services, having relinquished its right to offer 2G services. A decision it took on the basis that there was more potential in nextgeneration network services, while the need to invest in its home market has become even more apparent of late, after it sold off its Indian operating arm, which had accounted for 46.3% of total revenues in 2006, while Hong Kong & Macau made up just 19.8%. With the monies it acquired from the sale of its Indian unit, its it is expected this will fund and help better capture growth opportunities in the telecom firm's home market.

Despite 63.5% of mobile subscribers using 3G services as of May 2007, and growth of just 266,000 net additions in the first five months of this year, there is still competition emerging in the market. The country has been witness to aggressive marketing offers, with leading operators including CSL Mobility offering handset subsidies, which have in turn, affected its mobile handset revenues. However, we may see more and more of some operators opting for PCCW's preference of offering converged services as a way in which to generate new forms of revenues from the telecoms sector. PCCW recently announced plans to upgrade its entire network to facilitate the launch of converged IP-based fixed and mobile voice and data services. According to the South China Morning Post, PCCW invested US$400mn in network infrastructure last year to transform its fixed-line network into a digital system. This will enable both mobile and fixed-line customers access to a range of multimedia services.

Contents

[TOP]

Chapter 1 - Executive Summary

Chapter 2 - Business Environment

Asia

Hong Kong

SWOT

Hong Kong Telecoms Business Environment SWOT

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Hong Kong Telecoms Sector – Fixed-Line – Historical Data & Forecasts

Internet

Table: Hong Kong Telecoms Sector – Internet – Historical Data & Forecasts

Mobile

Table: Hong Kong Telecoms Sector – Mobiles – Historical Data & Forecasts

Chapter 4 - Macroeconomic Forecast Scenario

Growing Headwinds

Table: Population & Output

Chapter 5 - Country Snapshot: Hong Kong Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 - Competitive Landscape

Market Structure

Competitor Analysis

Table: Key Players – Hong Kong Telecoms Markets

Table: Selected Operator Financial Parameters

Key Players

Fixed-Line Overview

Table: Regional Fixed-Line Penetration Overview

Internet Overview

Table: Regional Internet Penetration Overview

Mobile Overview

Table: Regional Mobile Penetration Overview

Market Data Analysis

Fixed-Line

Table: Hong Kong Fixed-Line 2006

Table: Hong Kong Fixed-Line Market, H106

Table: Hong Kong Fixed-Line Market, Net Additions, 6M 2006

Internet

Table: Hong Kong Broadband Market, H106

Table: Hong Kong Broadband Market, Net Additions 6M 2006

Mobile

Table: Hong Kong Mobile Market June 2006

Table: Hong Kong Mobile Net Additions H205 v H106

3G

Table: Hong Kong 3G Mobile Market (September 2006)

Table 3G Net Additions

Industry Developments

Chapter 7 - Company Profiles

Regional Case Study – Motorola

Table: Motorola Net Sales by Region (US$mn)

Table: Motorola Market Sales by Locality of End Customer

Table: Leading Mobile Phone Handset Sales (mn) – Q306

Operators

Hutchison Telecommunications International Ltd

PCCW-HKT

Hong Kong CSL

SmarTone Telecommunications

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Telecommunications Reports: Sample of Companies Ranked

[TOP]

Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Asian Telecommunications Sources

[TOP]

BMI's Asian Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: