UBS Group released a research report stating that Hong Kong Telecommunications (06823.HK) has now stopped providing 4G mobile phone services, and has increased its 5G service data usage by 10-150% to customers since July this year, while keeping the same monthly plan. Meanwhile, Hkbn (01310.HK) canceled 5G services with data usage over 60GB in April, and strategically focused on mid-range and low-end customers (currently the highest monthly fee for 60GB is HKD 168).

The bank believes that the above operational strategy means that the competition in the industry is still fierce, and it is believed that similar promotional activities may help Hong Kong Telecommunications attract new users and gain more market share.

UBS Group also pointed out that the intense competition in the mobile phone market has limited impact on the revenue of Hong Kong Telecommunications' mobile phone services. Although under benign price competition, the average revenue per user (ARPU) of hkbn's residential broadband increased in the first half of the 2024 fiscal year, the loss of price-sensitive customers led to a total decline in its residential broadband revenue.

Considering the strong business prospects and the above factors, UBS Group continues to be bullish on Hong Kong Telecommunications rather than hkbn, maintaining the former's "buy" rating and the latter's "neutral" rating. (js/k)

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