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BMI View: We ha ve attributed the fall in mobile subscriber numbers in 2015 to the saturated state of the Hong Kong mobile market, together with Hong Kong's slowing economic growth and already high levels of LTE adoption. This will be exacerbated by a yet another MVNO entering the market - Hong Kong Broadband Network (HKBN) received an MVNO licence from the Office of the Communications Authority (OFCA) i n July, further saturating the already competitive mobile market. Operators are deriving growth and value from customers by bundling higher-value products and services like video and smart applications to their primary offering s . In addition, the potential for post - paid subscribers to outnumber prepaid ones will remove some subscriber number volatility and reduce churn rates for operators in the longer term. This has positive implications for average revenues per user (ARPU).
4G Services Offer Value in a Saturated Market
Hong Kong Mobile Market Forecasts
f = BMI forecast. Source: OFCA, BMI
Latest Updates & Industry Developments
•The latest data from the OFCA showed there were 16.685mn mobile subscribers at the end of May 2016 - up only 0.6% y-o-y - reflecting the maturity of the market. We forecast 16.9 9 mn mobile subscribers by the end of our five-year forecast period in 2020, for a penetration rate of 224.7%, of which 94.4% will be 3G/4G. The highly-saturated mobile market provides little room for organic growth, and revenue growth will come from migrating subscribers to post - paid plans and encouraging consumption of more value-added services.
•In the wireline sector, the focus is on FTTH as subscribers demand faster and more reliable fixed network connections. Based on full year data from the regulator for broadband subscribers, we forecast the number of broadband internet subscriptions to reach 2.65mn by 2020, equivalent to a penetration rate of 35.1%.
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