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CSL New World’s 2H EBITDA hit by costs

20 Feb 2007

Hong Kong’s largest cellco by subscribers, CSL New World Mobility has reported a 2.6% year-on-year drop in EBITDA to HKD333 million (USD43 million) in the second half of 2006, despite a 41% rise in revenues to HKD3 billion. The figures were explained by total expenses that rose by 49% to HKD2.75 billion in the period, as a result of the increased cost of handset subsidies offered by the company in its aggressive marketing campaign. CSL New World is fighting for market share in one of the world’s most competitive markets against Hutchison, SmarTone, China Mobile Peoples and PCCW Mobile, with all competitors except Peoples offering 3G services. CSL merged with New World last year, but the two brands have remained distinct, with CSL targeting high spending customers while New World focuses on the cheaper end of the market. Costs have escalated partly due to the merger and the expansion of W-CDMA and HSDPA services, whilst recent revenue growth has been partly driven by rising 3G data usage. The company says it has signed up 120,000 3G subscribers since its launch two years ago, and, since the launch of 3.5G in September last year, 10% of these users have upgraded to HSDPA devices. CSL New World Mobility is 76.4%-owned by Australia’s Telstra, whilst Hong Kong’s New World Developments owns the remaining 23.6%.

Hong Kong, CSL (became part of HKT)

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