Morgan Stanley published a report maintaining a positive view of the Hong Kong telecommunications industry, giving Hong Kong Telecom (06823.HK) and Digitcom (00315.HK) “increase holdings” ratings. According to DaMo, after Hong Kong Broadband (01310.HK) announced the launch of a virtual mobile telecommunications (MVNO) service, the focus shifted from the number of subscribers to increasing the average monthly user revenue. It is believed that improved broadband competition is beneficial to Hong Kong Telecom. It is expected that Digitcom will benefit from an increase in MVNO wholesale revenue.

Daimo also pointed out that the mobile communication service launched by Hong Kong Broadband uses the Digital Connect network. The monthly fee is similar to the price of China Mobile (00941.HK) and other low end plans of other operators. If you choose a four-in-one service plan (including home broadband, mobile communication, home phone calls and OTT content), you can get about 30% off the monthly mobile communication fee.

According to the bank, Hong Kong Broadband's target for mobile communication services in the first year was only to obtain 150,000 subscribers, about 2% of the market share, to prevent current operators (including partners Digital Connect and China Mobile) from cutting prices, so the impact on the market is limited.

Shares｜Rating｜Target Price (HK$)

Hong Kong Telecom (06823.HK) increased its holdings by HK$12.5

DigitalConnect (00315.HK) increased its holdings by HK$15.0

PCCW (00008.HK) reduced its holdings by HK$5.0->4.8

Hwa Electric (00215.HK) synchronizes with the market 2.7->HK$2.8