Goldman Sachs Group published a research report pointing out that the local telecommunications market is still healthy and mobile operators can maintain their data pricing power through tiered pricing. Hong Kong Broadband (01310.HK) was removed from the "sure Buy" list but maintained its "Buy" rating, lowering its target price from $12.3 to $10.8. HKT Trust and HKT (06823.HK) maintains a "buy" rating, with a target price of 13 yuan. PCCW (00008.HK) maintained its "buy" rating and lowered its target price from $6 to $5.60. On the other hand, SmarTone (00315.HK) maintained its "neutral" rating and lowered its target price from $13.50 to $13.1.

Goldman Sachs Group said that the three large telecommunications companies (HKT Trust and HKT, 3 Hong Kong and SmarTone) all offer unlimited data plans to high-end users. Goldman Sachs Group believes that the rising demand for data from users will drive the increase in fees and charges. The bank said HKT Trust and HKT had room to profit from current assets (network, bandwidth, etc.) and expected average prepaid income per user (APRU) to record 3 per cent year-on-year growth in fiscal year 2017.

Goldman Sachs Group said that compared with three to four years ago, more than 60 per cent of users bought mobile phones bundled with telecom operators, but now only 20 to 30 per cent of users still buy mobile phones through telecom operators. Goldman Sachs is expected to help reduce the cost of subsidized mobile phones by telecommunications companies, thereby increasing the free cash flow marginal profit of the mobile phone business by 1 to 2 percentage points a year in the next three years.

Goldman Sachs Group expects Hong Kong Broadband's home broadband APRU to rebound from 2017 as the group successfully reached its full-year target of adding 100000 new users in August. Goldman Sachs expects Hong Kong Broadband's home broadband APRU to bottom out in the first half of fiscal year 2017 and recover in the second half of next year. Earnings before tax, interest, depreciation and amortisation (EBITDA) grew at an average annual compound rate of 13% in the 2016-2019 fiscal year.