Strength

1. Innovative marketing channels: Through the use of social media platforms like Facebook, Hutchison has made a strong connect with the users in the region. Offers like redemption of upto 30% on birthdays, videos posts has helped it increase its connect with the users establishing itself as an ever evolving brand. Research from Nelson and Insentia states that through innovative marketing channels, Hutchison achieved a 61M reach in 2017 and its social media campaigns came trumps as the No.1 online video in 3HK history in terms of viewership. Besides a gamut of awards in inovative branding and marketing, the telco’s bagging the Silver and Bronze Award in 2018 CAHK STAR Awards, digital marketing and CMO Asia’s Telecom Excellence Awards - Best Operator of the Year in 2018, Stevie Awards in multiple categories, to accomplish the No.1 position amongst telecom industry peers, deserve special mention.

2. Solid financial position with strong cash reserves: Fixed line services’ growth in Hong Kong has declined over the past five years as more and more consumers migrate to wireless voice and data services. This trend is predicted to continue over the next four years as well till 2022. Reacting to the market trends, the group sold its fixed line telecom assets to I Squared Capital for HK$ 14.5 billion garnering a one off gains of HK$ 5.614 billion and helped boost the Company’s net cash to HK$ 9.8 billion by December 2017. I Square Capital will continue to be the supplier for fixed line services as the proceeds from the transaction will eventually help the group invest in its Mobile Services business thereby reinforcing its industry leadership and financial position in the market. Increase in mobile costumers by 3% YoY basis, with revenue from roaming increasing by 6% shows stable performance of the firm over the years. Revenue jumped 29% for the first half of 2018 from HK$3,117 million during the same period in fiscal 2017. Profit attributable to shareholders from continuing operations for the first half of 2018 also hiked 77% to HK$198 million, compared to the same period in 2017.

3. Increase in Customer base: As of 30 June 2018, there has been a net increase of approximately 3.3% (to 3.4 million) in the customer base of its Prepaid and Post-paid mobile and data services (45% post-paid users) in Hong Kong with more jump coming in prepaid customers as compared to 2016 which had 3.2 million customers, comprising 1.5 million postpaid subscribers and 1.7 million pre-paid subscribers. While its core competitor, Hong Kong Telecom faced a fall in its customer base by 7% (till August 2017). Also, it has managed to keep the churn rate steady at 1.3%. This emerges as an even bigger strength especially because the mobile subscriber penetration is going to be over 200% due to high number of tourists visiting Hong Kong in the coming years.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

1. Ease of doing business: A high-quality legal framework, transparency, regulatory efficiency and openness to global commerce undergird a vibrant business climate. Hong Kong is among world’s freest economies, rated as world’s most service-oriented economy with service sector accounting to 90% of GDP. In terms of FDI, its world’s 2 largest investor and host after USA. The telecommunication market in Hong Kong is liberalised and has full autonomy with no restrictions on foreign investment and ownership. It is ranked 3rd in Asia and 12 globally in the Readiness of doing business index. Hutchison Telecommunication is actively looking the opportunities to tie up with many international telecom operators to help it develop the infrastructural advancements as well as tap the rising market due to increase in tourism in the country.

1. Regulatory Approvals: Business operates within an efficient and transparent regulatory framework. There are very few price controls, but the government funds some subsidies and regulates residential rents and prices for telecommunications, public transport, and electricity. With government coming up with the blueprint for Smart Cities and urging telecom industry to support IoT, it has eased off it even more to get regulatory approvals and licensing options for the 5G spectrum thereby encouraging more industry players to invest in the area and set-up the infrastructure required to sport the technology. Government is even providing subsidies in order to help support the companies financially.

Environmental

1. Actionable steps to address climate change within the value chain: Hutchison Telecommunication is committed to long-term sustainability of environment as well as supporting the communities in which it operates. It runs the Recycling of Handsets and Accessories Programme and placed recycling boxes at its outlets. Recyclable equipment such as desktop PCs, laptops, monitors, printers and scanners amassed as a result of computers and associated equipment being renewed have since been donated to people in need. In 2017, the Group was awarded Excellence Level for Waste wise certificate and Basic Level for Energy Wise certificate. This was the fourth year Green Office status had been conferred on the Group under the auspices of the World Green Organisation’s Green Office Awards Labelling Scheme. The Group continues to encourage customers to opt for electronic billing by email or SMS, as part of a long-term strategy to reduce consumption of paper