Hong Kong Phone Co. Has $354M Loss
HONG KONG (AP) _ Cable and Wireless HKT lost 2.77 billion Hong Kong dollars, or $354.7 million, in the first half as the phone company faced fierce competition in a newly deregulated market.
The company blamed Hong’s Kong’s recession, writeoffs for old equipment and competition from new rivals for the loss for the six months ended Sept. 30.
The loss contrasts with a profit of 6.10 billion Hong Kong dollars a year earlier.
It also announced Friday that Alistair Grieve, a deputy chief executive, would retire after 12 years as a director of the company at the end of the month. William Cheung, who has been in charge of the company’s mobile services since September, was chosen as a director on Friday.
Cable and Wireless HKT was hit hard by price wars that began earlier in the year, when it surrendered its local monopoly on direct-dial long-distance services and suddenly faced startup competitors who fought hard to lure customers.
In March, Cable and Wireless HKT took another blow as the government began allowing mobile phone users to keep the same number even if they switch service providers.
Revenues plunged 17.3 percent to 14.18 billion Hong Kong dollars, or $1.82 billion, in the first half from 17.15 billion Hong Kong dollars a year earlier.
The company’s results reflected a one-time writeoff of 7.09 billion Hong Kong dollars, or $908.7 million, on equipment the company has either phased out or will be using less as it shifts to better technology.
The chief executive, Linus Cheung, said the results ``reflect the increasingly challenging market environment in Hong Kong, which is now one of the most open and competitive telecommunications markets in the world.″
Investors responded by pushing the company’s shares down by 1.1 percent on the Hong Kong Stock Exchange.