1Q10 Hong Kong Mobile Operator Forecast, 2009 - 2014: Hong Kong will have 14 Million Mobile Subscriber Accounts in 2014 with PCCW Taking Market Share of 17.4%

IE Market Research Corp, February 2010, Pages: 118

Mobile Operator Forecast on Hong Kong provides over 50 operational and financial metrics for Hong Kong’s wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 3Q2011. Operators covered for Hong Kong include: CSL Limited/New World Mobility Limited, Hutchison Telecommunications HK Hld Ltd, SmarTone Telecommunications Holdings Ltd, and PCCW Limited. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.

Global Mobile Operator Forecast covers 50 operational metrics of 200+ mobile operators in 50+ countries, making up 80% of the world’s population. Our forecasts are based on our proprietary, country-specific forecasting models. These models deploy multiple regression analysis and cross-impact matrices that estimate relationships between subscriber data, technology use and deployment data, overall economic and demographic changes expected in a particular country; and relate these to company operational and financial metrics.

Companies Covered in this Country Mobile Operator Forecast
CSL Limited/New World Mobility Limited (Only the revenue/EBITDA/Capex data is available for this operator.)

Hutchison Telecommunications HK Hld Ltd
SmarTone Telecommunications Holdings Ltd
PCCW Limited

Annual Results & Forecasts for each of the above operators is covered in this report for: CY 2001-CY 2014. Quarterly Results & Forecasts are covered for: March 2003 - September 2011

PREPAID AND POSTPAID SUBSCRIBERS
SUBSCRIBER GROWTH (YoY)
SUBSCRIBERS BY OPERATOR
SUBSCRIBER GROWTH BY OPERATOR (YoY)
NET SUBSCRIBER ADDS BY OPERATOR
NET SUBSCRIBER ADDS GROWTH BY OPERATOR
MONTHLY CHURN BY OPERATOR *
POST-PAID SUBSCRIBERS BY OPERATOR **
POST-PAID SUBSCRIBER GROWTH BY OPERATOR (YoY) **
PREPAID/WHOLESALE SUBSCRIBERS BY OPERATOR
PREPAID/WHOLESALE SUBSCRIBER GROWTH BY OPERATOR
POST-PAID % OF TOTAL SUBSCRIBERS BY OPERATOR **
PREPAID/WHOLESALE % OF TOTAL SUBSCRIBERS BY OPERATOR
POST-PAID NET ADDS BY OPERATOR **
POST-PAID ADDS GROWTH BY OPERATOR (YoY) **
PREPAID/WHOLESALE NET ADDS BY OPERATOR
PREPAID/WHOLESALE ADDS GROWTH BY OPERATOR
MONTHLY ARPU BY OPERATOR
MONTHLY ARPU GROWTH BY OPERATOR (YoY %)
DATA % OF SERVICE REVENUES BY OPERATOR ***
MONTHLY DATA ARPU BY OPERATOR ***
DATA ARPU GROWTH BY OPERATOR (YoY) ***
MONTHLY VOICE ARPU BY OPERATOR
VOICE ARPU GROWTH BY OPERATOR (YoY)
VOICE REVENUE PER MINUTE BY OPERATOR ****
VOICE REVENUE PER MINUTE GROWTH BY OPERATOR (YoY) ****
MOU PER SUBSCRIBER BY OPERATOR (MINUTES/MONTH) ****
MOU/SUBSCRIBER GROWTH BY OPERATOR (YoY %) ****
SHARE OF TOTAL SUBSCRIBERS BY OPERATOR
HHI INDEX BY SUBSCRIBER SHARE
SHARE OF NET ADDS BY OPERATOR
SHARE OF POST-PAID NET ADDS BY OPERATOR **
SHARE OF PREPAID/WHOLESALE NET ADDS BY OPERATOR
SHARE OF SERVICE REVENUE BY OPERATOR
HHI INDEX BY SERVICE REVENUE SHARE
YoY CHANGE IN REVENUE SHARE BY OPERATOR
REPORTED REVENUE BY OPERATOR (REPORTING CURRENCY)
SERVICE REVENUE BY OPERATOR (REPORTING CURRENCY)
EBITDA BY OPERATOR (REPORTING CURRENCY)
CAPEX BY OPERATOR (REPORTING CURRENCY) *****
SERVICE REVENUE GROWTH BY OPERATOR (YoY)
EBITDA GROWTH BY OPERATOR (YoY)
EBITDA/REPORTED REVENUE BY OPERATOR
EBITDA/SERVICE REVENUE BY OPERATOR
EBITDA/INCREMENTAL SERVICE REVENUE BY OPERATOR
CAPEX/REPORTED REVENUE BY OPERATOR *****
CAPEX/SERVICE REVENUE BY OPERATOR *****
(EBITDA-CAPEX)/REPORTED REVENUE BY OPERATOR *****
EBITDA MARGIN EXPANSION/CONTRACTION BY OPERATOR
REPORTED REVENUE BY OPERATOR (USD)
ARPU BY OPERATOR (USD)
DATA ARPU BY OPERATOR (USD) ***
VOICE REV/MINUTE BY OPERATOR (USD) ****
SERVICE REVENUE BY OPERATOR (USD)
EBITDA BY OPERATOR (USD)
CAPEX BY OPERATOR (USD) *****

* Available only for Hutchison and SmarTone
** Available only for Hutchison and PCCW
*** Available only for SmarTone
**** Available only for Hutchison
***** Available only for CSL/New World, Hutchison, and SmarTone

Subscriber growth is slowing down in Hong Kong's mobile operator space
- +3.2% industry average subscriber growth in 3Q.2009

Negative ARPU growth continues in Hong Kong
- -5.6% industry average ARPU growth in 3Q.2009

EBITDA continue to decline at CSL/New World, Hutchison and SmarTone
- -27.1% industry average EBITDA growth in 3Q.2009

So what is IEMR’s Forecast?

Total mobile subscriber accounts in Hong Kong to reach 14 million in 2014

- Given the latest quarter numbers, our model forecasts that total wireless subscribers in Hong Kong will increase from 10.8 million in 2009 to 14.1 million in 2014.
- We expect that Hutchison will have 3.85 million subscribers and PCCW will have 2.45 million subscribers by the end of 2014.

PCCW's market share will increase over the next five years

- Our forecasting model predicts that PCCW's subscriber market share will increase from 13.5% in 2009 to 17.4% in 2014.
- On the other hand, we expect that SmarTone will see its market share decline from 11.0% to 9.4% over the forecast period, 2009 - 2014.

SmarTone's monthly ARPU will be declining from 2010 to 2014

- We forecast that the industry average monthly ARPU level will remain in the range of HK$ 154 - HK$ 157 over the next several years.
- At the operator level, we are predicting that SmarTone will see its monthly ARPU decrease from HK$ 214 in 2009 to HK$ 204 in 2014, and PCCW's monthly ARPU will decrease slightly from HK$ 100 in 2009 to HK$ 97 in 2014.

EBITDA margins in Hong Kong's mobile operator space to remain stable over the next several years

- We forecast that the industry average EBITDA margin (calculated as EBITDA/reported revenue) will remain at approximately 22% over the next several years.
- According to our model, EBITDA margins at CSL/New World, Hutchison, SmarTone, and PCCW will be 23.3%, 23.8%, 20.5%, and 15.4% in 2014.

- CSL Limited/New World Mobility Limited
- Hutchison Telecommunications HK Hld Ltd
- SmarTone Telecommunications Holdings Ltd
- PCCW Limited

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