Sunday Communications Ads (MM) (NASDAQ:SDAY)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Sunday Communications Ads (MM) Charts. Click Here for more Sunday Communications Ads (MM) Charts.](/p.php?pid=staticchart&s=N%5ESDAY&p=8&t=15)
SUNDAY Communications Limited: Annual Results 2003
SUNDAY announces first annual net profit of HK$27 million for 2003 (Hong Kong
Dollar is Translated to United States Dollar At a Rate of HK$7.764 to
US$1)
HONG KONG, April 1 /PRNewswire-FirstCall/ -- SUNDAY Communications Limited
today announced its first annual net profit. The HK$27 million net profit for
the year ended 31st December 2003 compared to a net loss of HK$117 million in
2002.
Earnings before interest, tax, depreciation, amortisation and share of loss of a
joint venture (EBITDA) rose 47% over the corresponding period of 2002 to HK$315
million. The strong rise in EBITDA reflected an improvement in EBITDA margin,
which rose to 25% in 2003 from 16% in 2002. The strong cash flows allowed the
Group to continue to reduce its debt, which on a net basis fell by 29% from 31st
December 2002.
"We have passed many important milestones during a difficult year that testify
to our sound management and strategy. In this newmultimedia era, the mobile
telecommunications industry is resembling more and more a fast-moving consumer
goods market, where aspects such as branding and product differentiation are
critical to success," said Group Managing Director Bruce Hicks. "It is also a
new era for SUNDAY. We are profitable, achieving the target we set for
ourselves at the beginning of the year. We are fully funded for our continuing
operations and 3G roll-out. We have what has been the most consistent strategy
in this marketplace to address the evolution of the industry. We have a new
customer centred organisational structure and an infrastructure that is among
the most efficient in the industry. We are backed by some of the best technology
in the world. I look forwardto building on our success in 2004 as we prepare
for our 3G launch."
The milestone result came despite the challenging circumstances involving a
highly competitive marketplace, a weak economic environment and the impact of
SARS during the first six months. SUNDAY's profitability testifies to its
ability to compete as a unique operator in a very competitive marketplace, with
a management team of seasoned professionals that have shown consistency of
vision and the ability to implement strategy. The Group also enjoys the
benefits of the highly efficient cost structure it put in place during 2002 that
allows it to match or exceed the tariff, service quality and product offerings
of competitors.
Revenues for the year showed a modest decline, in linewith the Group's strategy
during the year to focus on profitability. Due to the weak economy, price-based
competition and the impact of SARS, the Group's monthly postpaid average revenue
per user (ARPU) declined by 4% to HK$201. This was partially offset by an
increase in its mobile subscriber base by 9% to 660,000 and an improvement in
the average churn rate to 5.0%, compared to 5.4% in 2002. As a result, revenues
for mobile service business declined by a relatively modest 6% to HK$1,150
million.
Higher Efficiency and Service Quality
The benefits of the various initiatives implemented in 2002 to reduce costs and
increase efficiency became apparent in 2003. Overall operating costs (excluding
depreciation) declined by 22% to HK$619 million as compared with the
corresponding period of 2002. SUNDAY's strong management enables it to operate
with a lean and efficient structure well ahead of the industry that is regarded
as an important competitive advantage.
At the same time, SUNDAY made further improvements to service quality, helping
the Group to attract subscribers. On coverage, during the past three years the
Group has increased the number of cell sites by 25%. This and other initiatives
have given SUNDAY among the best coverage in the industry, according to an
independent study released at the end of 2003 by the Chinese University of Hong
Kong. The sales force has been reorganised under new management that combines
traditional mobile telecommunications expertise with an understanding of the
needs of fast moving consumer markets. Increased emphasis has been put on
quality assurance and training, while changed management systems have improved
customer care and monitoring.
Creative Approach To New Era in Telecommunications
The mobilecommunications market in Hong Kong is mature. The Office of the
Telecommunications Authority (OFTA) now estimates mobile penetration in Hong
Kong at over 106%. SUNDAY is serving this market through a creative strategy
focused on market segmentation and launching innovative services. It has
consistently pursued this strategy, rather than volume and price based
alternatives, in the belief that it represents the only way to extract more
revenue from the technology and consumers in the longer term. This strategy is
now coinciding with a noticeable shift in consumer attitudes as users begin
increasingly to value innovation and quality, as technology widens the range of
service choice. 3G will accelerate these trends.
Market segmentation brings value to customers by providing tailor-made services
to meet their specific lifestyle needs. SUNDAY has been well ahead of the
competition in Hong Kong in recognising this fact and reorienting its operations
to implement effective segmentation programmes.During 2003, the Group
reorganised its operations according to four distinct customer segments --
youth, ethnic, corporate, and the mass market. Each is run as a sub-business,
responsible for products, pricing, promotion and place of business, with
separate targets for subscribers, ARPU, churn and other metrics.
To support these segments, SUNDAY introduced more innovative services,
especially its proprietary Location Based Services (LBS). In the business
segment, the Group made good progress as the market leader in enterprise LBS
applications for logistics and field service dispatch. In the youth segment, we
launched interactive LBS games. In the mass market, SUNDAY launched Family Watch
and SARS updates, applications which attracted considerable attention. SUNDAY
also launched other innovative services, including wireless LAN roaming services
for business customers, which allows customers to access Internet via GPRS or
wireless LAN.
Although SUNDAY's data and market segmentation initiatives are still in their
early stages, they are therefore beginning to contribute, as they will do much
more forcefully in future, to overall customer acquisition and retention. Data
services revenues grew by 55% in 2003.
Preparing for 3G
The segmentation services already introduced by SUNDAY are an important
precursor to its 3G services, since 3G technology will move the industry and
consumers even further away from the commoditised mass market of mobile voice
communications towards ever more tailored multi-media mobile services.
In December 2003, SUNDAY signed Heads of Agreements with Huawei Technologies
Co., Ltd. (Huawei) to provide the turnkey solution for SUNDAY's 3G mobile
telecommunications business. Huawei was chosen through a rigorous selection
process that focused on technical capabilities, pricing and financing, in which
it outperformed some of the world's leading mobile telecommunications vendors.
The financing associated with the supply contract means that SUNDAY is fully
funded for its 3G-roll out and continuing operations.
Prospects
Looking forward, Mr. Hicks said that he expects 2004 to continue to be a
competitive year but that SUNDAY will focus on growing its revenues through the
launch of more services based on its creative approach to segmenting the market.
It will also continue to benefit from the highly cost-effective and efficient
operating structure now in place, through which it aims to achieve further
incremental cost savings in areas such as transmission costs.This will help
mitigate any impact on earnings from a possible roll-out of 3G during the year.
Preparation will continue for the launch of 3G services in the fourth quarter of
2004, although its partnership with Huawei offers the flexibility to reschedule
the launch date if market acceptance is different from that anticipated.
SUNDAY's 3G partnership offers tremendous strengths and synergies as a world
class technology developer in this field, with geographic proximity in Shenzhen,
just one hour's drive from SUNDAY's offices.
"Huawei's 3G technology is among the world's best, and the company has one of
the largest R&D establishments of any network equipment manufacturers in the
world, including 3,500 engineers working specifically on 3G. It hasstrengths
in areas that will be critical to success in 3G, including the IP platform and
service creation. It offers an end-to-end solution. Huawei's base in Shenzhen
also means that we will enjoy a very close working relationship on technology
development and product introduction, giving SUNDAY a significant edge over its
rivals in developing creative, tailor-made services and bringing them to market
quickly," said Mr. Hicks.
SUNDAY further believes the future of Hong Kong's mobile communicationsindustry
will be closely linked to China and other markets. In 2004, SUNDAY will
strategically build upon its China vision in a manner that provides additional
cost efficiencies for its current operations and creates a strong foundation to
capitalise upon opportunities that will develop as the mainland's
telecommunications industry opens. In this regard, the Closer Economic
Partnership Arrangement (CEPA) may provide an early entry for Hong Kong mobile
operators.
"SUNDAY's competitive strengths areextremely relevant today as a new generation
of technologies becomes more ingrained in the way people use and think about
mobile communications. The scope of what everyone regards as mobile services is
set to expand dramatically, which will lead to a consequent growth in
opportunity for SUNDAY. We have the right infrastructure, strategy, partners,
people and vision to succeed in this new era," said Mr. Hicks.
About SUNDAY
SUNDAY is an innovative developer and provider of wireless communications and
data services in Hong Kong. SUNDAY began commercial operations in 1997. The
company's core strategy is to capitalise on the convergence of wireless
communications and data technologies to develop innovative services and
solutions. Today, SUNDAY enhances people's lives by delivering wireless data
applications and services to meet the lifestyle needs of specific customer
segments. Owning a 3G mobile license, SUNDAY is well positioned to develop a
more advanced range of 3G wireless services to furtherenhance people's lives by
providing innovative, relevant and value-driven services. For more information,
please visit http://www.sunday.com/.
This and other information about SUNDAY can be accessed via
http://www.sunday.com/, http://www.irasia.com/listco/hk/sunday, and
http://www.quamnet.com/.
For enquiries, please contact:
Media Investor Relations
Stella Wong Email:
Corporate Communications Manager
Tel: (852) -2113-8251 / 9230-5501
Email:
DATASOURCE: SUNDAY Communications Limited
CONTACT: Media, Stella Wong, Corporate Communications Manager of SUNDAY
Communications Limited, +852-2113-8251, or +852-9230-5501, or
Web site: http://www.sunday.com/