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HSBC lowers HKT-SS (06823) to HK$10.4
HSBC Global Research lowered its target price for
HKT Trust and HKT (06823) to HK$10.4 from HK$10.8, and maintained its "hold" rating.
  The research house said HKT has executed well in two areas over the past several years,
namely: (1) No bundle discount. HKT, and (2) Astute brand and price segmentation. However,
its success in these areas now makes it vulnerable. Previously, no other operator could
compete with HKT in the key areas of wireless and broadband, making a bundle discount
strategy impossible.
  HKBN's (01310) deal to become a MVNO using the networks of China Mobile HK and SmarTone
(00315) has changed this. With its cheap (effectively zero margin) mobile services, HKBN 
can raise the price of its core broadband product and still be cheaper than HKT
in nearly all price segments. And its effective marketing of mobile - demonstrated in
triggering a response from HKT despite it having just 3% of the customers (147,000 at
August 2017) - means that HKT's high-value customers are now at risk of moving to a
cheaper provider.

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