Boston, MA -- (SBWIRE) -- 10/10/2013 -- We downgraded our forecasts for fixed broadband internet subscriptions in the Q4 2013 update, as the market continued its trend of decline started in September 2012. We do not believe this is a long-term story as Hong Kong's fibre broadband is crucial given the territory's position as a financial hub. Hong Kong's telecommunications market, particularly the mobile sector, is one of the most dynamic and mature in the Asia Pacific region. Mobile subscriber numbers have long passed the 200% penetration mark and the latest data from operators and the regulator show continued growth. There are some concerns in the mobile market, however, with the government reviewing whether to renew operators' 3G licences when they expire in 2016 or open all of them - or some of them - to tender. Fixed lines, meanwhile, continue to post declines, although IP lines are the bright spot for the industry.

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Key Data

- Mobile subscriptions continued to grow in H113 despite the high penetration rate. We envisage 19.0mn mobile subscribers by end-2017, representing 250% penetration, although a portion comprises inactive prepaid subscriptions.
- Full-year data from the regulator for broadband subscriber numbers saw further declines which were unexpected. We therefore downgraded our forecasts for 2013 but believe it will return to growth over the course of our forecast period to 2.6mn broadband subscribers by 2017.

Key Trends And Developments

Hong Kong's regulatory authorities announced the outcome of a its latest spectrum auction in May 2013, with four operators awarded spectrum in the 2.5GHz and 2.6GHz bandwidths: Genius Brand, SmartTone, China Mobile Hong Kong and CSL.

Hong Kong's telecoms operators had until April 2013 to submit their views to the regulator, OFCA, regarding the future use of 3G spectrum. The four leading operators, SmartTone, CSL, Hutchison and PCCW have issued a joint letter requesting that their 3G spectrum licences are automatically renewed when they expire, in October 2016. The government, however, is keen to auction off at least part of the spectrum in a move to promote competition in the sector.

System integrator and consultant Computaris has been selected by PLDT Global (PGC), a wholly owned subsidiary of Philippine Long Distance Telephone Company, as the end-to-end billing infrastructure provider for its Hong Kong MVNO subsidiary. An MVNO platform is required to provide telecoms products to overseas Filipinos via relevant voice, SMS, mobile commerce and Filipino-centric value-added services. PGC will also be able to launch services with pricing and packaging with the delivery of the modular MVNO suite by Computaris.

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