PCCW at point of inflection?

19 Aug 2005

PCCW has posted a 1% fall in year-on-year telecoms-related revenues for the six months to June 2005. The company claims that the small fall is proof that its fixed line business is stabilising after years of market share erosion: in 2002 PCCW had an 82% market share before slipping to 67% in June 2005. However, it lost only 1,000 net users during June and actually gained customers in July.

PCCW’s recent acquisition, Hong Kong’s smallest cellco Sunday Communications, also reported results for the first half of 2005. At the end of June it had 702,000 subscribers, up 7% in the last twelve months. However, intense competition leading to price promotions and increased handset subsidies resulted in a 6% ARPU decline. More encouragingly, data services rose by 22% on the corresponding period last year to account for about 10% of the HKD461 million total revenue for the half-year.