HKBN zeroes in on harvesting more subscribers

Rather than on ARPU.

It has been noted that HKBN is targeting higher subscriber growth, and that revenue growth from higher subscriber (versus ARPU) momentum was reaffirmed.

According to a research note from Barclays, residential ARPU was modestly down 0.9% h/h even as subscriber growth was slightly higher at 32K, versus 30K in 1H.

HKBN targets higher subscriber growth (versus stronger ARPU) as the primary driver of revenue momentum in FY16 and flags flattish ARPU trends as more likely into FY16, said the report.

Here's more from Barclays:

Does competitive stability endure? The story thus far has been HKBN expanding share in a modestly expanding market at the expense of i-Cable and HTHK whilst HKT has stayed flat.

As long as this dynamic sustains (as we think it will), we think competitive stability will also remain in place. HKBN also flags its subscriber growth as likely loaded into 2HFY16 as its partnership with LeTV on English Premier League content (effective from next season) becomes more relevant as the next football season kicks off.

Co-ownership: a safety valve. The CEO and CFO own a 5.9% stake, while employees own a total of c4%. Employee interests are clearly aligned with those of shareholders.

HKT's yield-driven stock positioning and hence focus on cash flows also helps in this regard. In summary, we think a focus on subscriber share at the expense of profits is unlikely at present in the HK residential broadband market.