Consumer durables is a cataloguing of consumer goods that are not essential to be bought very often as they are fashioned in a way so as to last for an extended period of time. Profits in the consumer durables sector were most profoundly…
BMI View: We have 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) in 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 offerings. 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).
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? 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 16.99mn 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%.