Afternoon, thank you for joining Hutchison Telecommunications Hong Kong Holdings's 2022 annual results announcement webcast. Today, we have our Executive Director and CEO, Mr. Kenny Koo, and our CFO, Ms. Sandy Tsang, here to give you an overview of our 2022 annual results. During the presentation, please feel free to raise your questions in the bottom right of the screen. We will address your questions during the Q&A session, which will follow after Mr. Koo and Ms. Tsang's presentation. First, we are pleased to have Mr. Koo to give us an update of results highlights, followed by business review and development. After that, Ms. Tsang will present on the financials and our sustainability efforts. Mr. Koo will conclude with an update on our 2023 outlook. Mr. Koo, please.
Good afternoon and welcome. 2022 continued to be a challenging year, particularly during the fifth wave of COVID-19. The pandemic situation gradually eased in the H2 , local business activities picked up and travel restriction began to relax. Despite the tough and uncertain operating environment, service revenue in 2022 increased by 1% to HKD 3,278 million, driven by strong H2 local service revenue growth and roaming revenue recovery, which increased by 14% against last year. Roaming revenue recovery in 2022 was around 40% compared to pre-pandemic level in 2019. 5G penetration increased 9 percentage points to 30% amid a higher Hong Kong post-paid customer base. Customer base stood at 3.3 million, a 2% increase, as driven by increase in prepaid subscriptions and 5G subscriptions.
Our cash and bank balances were at HKD 3,700 million. Net loss of HKD 158 million and loss per share at HKD 3.28, mainly due to lower hardware revenue as a result of supply chain constraints, higher depreciation and amortization resulting from our investments in network coverage expansion and the launch of 5G networks since 2020, along with the renewal of existing spectrums with higher spectrum utilization fees and activation of our 700 MHz spectrum in 2022. Despite a challenging 2022, our board is very optimistic with the commercial momentum of the post-COVID-19 recovery, particularly with the network expansion and enhancements work.
As we announced during 2022 interim announcement, we targeted to pay out the same dividend payment as 2020 for HKD 361 million until the net profit of the year exceeds this amount. The board recommends payment of a final dividend of HKD 0.0521 per share for 2022. I will give you an update on our business and our development in 2022. We are committed to network excellence and building the best 5G network is not done in the blink of an eye. It was a multi-year commitment and continuous efforts. The efforts we had put into our commitment were demonstrated by the milestones that we reached. In terms of the network coverage, the number of our 5G base station has increased by 50% compared with the third quarter of 2020 across the territory.
5G network coverage was extended to the newly launched East Rail line cross-harbor MTR link and Tseung Kwan O-Lam Tin tunnel and the Cross Bay link. The 700 MHz spectrum band was also activated on 5G in July 2022. In terms of the optimization of reception, Net Your Own Reward scheme and HoneyBee initiative were launched to increase engagement with our customers, particularly to collect feedback on our network performance and identify areas for further optimization. In terms of network performance, switching center and network operation center were upgraded and equipped with state-of-the-art technologies such as AI, machine learning, enhancing capacity, and providing efficient and effective monitoring of network performance. Apart from the network optimization and enhancement, we have also expanded network capacity and coverage with additional spectrum. 700 MHz, which is a low-band spectrum, was activated during the year.
The excellent coverage layer with the combination of low-band radio propagation characteristics on 900 MHz and 700 MHz delivers significant coverage enhancement in areas from hotspots, urban to rural. It is an optimal spectrum to enhance deeper network coverage, including low density rural residential areas. The ultra capacitor layer, powered by 3500 MHz and 2300 MHz, delivers 5G service covering traffic hotspots in urban areas. The basic experience layer, powered by 2600 MHz, 2100 MHz, and 1800 MHz, cover traffic hotspots in urban areas and also expanding to rural areas. With a vast network, we put into a lot to grow our core revenue drivers in 2022. Not only did we deliver encouraging results in 2022, they also represent promising outlook, opening doors to a larger market or sector.
5G penetration has reached 30% in December 2022, representing a 9 percentage point increase with a 5G ARPU of around HKD 120. The uptick was driven by successful 5G upgrade initiatives and loyalty program. The 5G broadband was another huge success in 2022, reporting over 1,200% growth versus last year. This will be a growth area as this represents a high potential market from traditional broadband. Apart from drivers from 5G mass market, the relaxation of travel restriction also stimulates pent-up demand. As travel restriction relaxed, we saw an improvement in outbound roaming. Hong Kong postpaid outbound revenue increased by 29% against last year, a head start on roaming recovery we can see. As local economy sentiment gradually recovers, pent-up enterprise projects start to resume as well.
Corporate solution revenue was 8% above 2021. We continue to leverage synergies of the CKH Group and stay ahead of market 5G technology. The 9 percentage point growth of 5G penetration was supported by both in-base upgrade and new sales. In-base upgrade grew by 200% against last year, while new sales grew by 148% against last year. We offer a range of promotions, such as competitive offers for new handset devices, hot products and services. For example, earlier, when border reopened, we offered travel ticket as its incentives for 5G plan subscription. Other tactical offers in collaboration with A.S. Watson's Retail, loyalty program MoneyBack. Last but not least, we showcase our ultra-fast and seamless network to open up to new customers, and we have a lot of pop-up in many high footfall areas.
That's not just in pop-up counter format. We also have promotion truck that goes to different areas with high traffic. This allow us to better engage with our customers and showcase them the potentials of 5G network with in-person experience. Another growth areas is our 5G broadband, which is supported by our outstanding network performance and competitive packages. We offer an all-in-one package with no speed internet limit, no landline, no installation requirement. Our active base has grown up by 471% year-on-year. It is a solution for both mass market and corporate customers. For mass market, we target rural areas and villages where fixed line broadband might be pricey or not even available.
As mentioned last year, we target our deployment together with our network expansion enhancement project and 700 MHz deployment effectively monetizing our investment. We have special team for village segment and other tactical offers for selected areas. This way, not only allow us to better manage our network resource, we are also confident that the service we are delivering in these areas. Our 5G broadband service is not only limited to mass market, though. It offers great deal of benefits to corporate customer as well. Given the success of a deployment to village areas, we have a dedicated team taking care of the corporate segment. For example, we reach out to individual shop floor by floor to show them the benefits of 5G broadband. Among all our services, POS and CCTV solutions, which are enabled by our 5G network, are of particular interest by these businesses.
Another key highlight in 2022 is roaming recovery. As border began to reopen, we saw a significant increase in demand for roaming. Compared to the baseline in 2019, you can see in the bar chart that 2022 recovery went up from 31% in 2021 to 35% in 2022, and to 50% in January this year in terms of the number of postpaid data roaming subscriptions. We have launched promotional initiatives and sharing sections to raise awareness and remind our customers of our globally connected network with roaming partners all over the world. All rounded offerings are available to different types of roamers. For example, for non-frequent roamers, we offer a one-off few days only roaming plan. For frequent travelers, we offer a longer-term roaming plan, such as the 80-day one.
For our SoSIM prepaid cards, we also transform the SoSIM to also provide roaming service, as well as added a new 5G service plan with seamless connected in Greater China area. For corporate solutions, that's another promising revenue driver. Our parent company, CKH, has business in various sectors from industrial, utility to retail. This is good for us to exhibit state-of-the-art 5G use cases in different scenarios. For example, smart office to manage energy use, smart construction for real-time monitoring and safety, smart parking to save time, smart property such as poisonous gas detector for safety, robotic solution as concierge and safety monitoring, and smart education to inspire innovation. During the year, various companies or schools visit our DIGIBox, which is a hub that showcase 5G solutions, to experience how 5G can help to create value for their businesses or case scenario.
Like we said earlier, our 5G solutions can help improve operational efficiency and quality for operations. A number of corporation leverage OFCA Subsidy Scheme for Encouraging Early Deployment of 5G have been engaged with three Business 5G solutions. Those includes VR and AR learning, including content management system and movable 5G network. In terms of robotic solutions, 5G solution enable real-time streaming, sensor for gas detection, and Super Wi-Fi with 5G backhaul, reducing risk of workers. In terms of 5G operation and cranes surveillance, AI analytics help to detect intrusion and creation of private network via our 5G network. Last but not the least, how do we interact with our customers to subscribe to our services? In addition to our own 3 shops, we have shop-in-shop in PARKnSHOP and 3 Hong Kong at Fortress. During the year, we launched three DigiLive as shop-in-shop and PARKnSHOP.
Total outlets have gone up to 500, which is the strongest distribution in the industry. All of these channels are well-defined to serve the needs of different segments. Aside from our continuous network enhancement, we also gear up our customer engagement and retention with a unique loyalty program. This continuous effort is reflected in the improvement of 0.4 percentage point improvement in our postpaid churn rate. We collaborate with MoneyBack to extend our offerings to include a vast array of awards and benefits redeemable at PARKnSHOP, Watsons, Fortress, and 3 Hong Kong stores. We also took the initiative to deepen customer engagement. For example, we are the leading operator to introduce Web3 application to have the first virtual shop in Metaverse. We also created a digital society with mobile application where services are available at customers' fingertips.
We also launched 3toTalk, our digital service ambassador, to assist customer with their digital needs, even same-day delivery during COVID. In addition to these omnichannels, we also expanded our customer contact center, improving efficiency and capacity. Now, I will pass the time to Sandy.
Thank you, Kenny. Good afternoon, everyone. Let me take you through our financials in 2022. Our total revenue dropped by 9% to HKD 4,882 million. This was mainly due to a 25% decrease in hardware revenue as we encounter supply chain constraint during COVID. Service revenue, which account for 67% of our total revenue, has increased by 1% to HKD 3,278 million. Roaming revenue rebound and report a 14% increase against last year. Despite a tough operating environment during the H1 of 2022, where we were negatively impacted by the fifth wave of pandemic and intense market competition. Local service revenue remained resilient and stayed flat against last year.
As COVID measures and travel restriction relaxed in the H2 , both our local and roaming revenue report an encouraging growth when compared against the H1 , as well as against the same period last year. Our local and roaming revenue in the H2 grew 10% and 12% respectively against the H1 . In terms of customer base, our total number of customer in Hong Kong and Macau increased by 2% to around 3.3 million. This also represent a 9% growth when compared with the H1 of 2022. The increase in customer number was largely due to growth in our prepaid customer and 5G postpaid subscription. Net output decreased by 2% year-on-year, mainly due to pressure from competition and the impact of unfavorable economic condition during the H1 .
However, as economic sentiment pick up, our output for the H2 improved by 8% when compared with the first six months. Even though there is a 2% increase in our postpaid base, postpaid trend improved by 0.4 percentage point, mainly due to improvement in our network, as well as effective customer retention strategy, boosting our customer engagement and loyalty. 5G penetration on Hong Kong postpaid base reached 30% at December 2022. A 9 percentage point improvement against last year. 5G broadband report a strong growth in 2022, with a promising outlook. This slide we cover operating expense, depreciation and amortization, and our cash position. Higher operating expense was reported. The 2% year-over-year increase was mainly due to higher network operating costs for the expansion and enhancement of our 5G network.
As you can see in the blue bar chart, the shaded area which occupied most of our operating costs are relating to network. In terms of capital expenditure, we report a 43% reduction as we mentioned last year, that our 5G CapEx has peaked. On the other hand, our depreciation and amortization has increased by 12%, and this was mainly due to the full year impact of amortization for spectrum license renewed in 2021 with higher SUF. Amortization of the 700 MHz spectrum, which was activated during the year, as well as higher depreciation for the group's investment in network infrastructure. EBITDA, less CapEx, has increased by 53% to HKD 924 million, mainly due to lower CapEx. CapEx over service revenue reduced to 15%.
The decrease compared to the 27% in 2021 reflect that 5G CapEx has peaked. We will maintain a healthy cash position at HKD 3.7 billion. Let me give you an update on our sustainability performance in 2022. In terms of the group's action on climate change, our achievement of 70% reduction in carbon emission intensity against 2018 was made possible by the ever-increasing data traffic, decarbonization of energy mix, and reduction in energy usage at our switching center. The group implemented rigorous governance policy and framework to ensure compliance with all rules, laws, and regulations in which it operates. No legal case was reported regarding corporate corrupt practice, and 93% of our employees received training on anti-corruption or ethics and integrity.
For social aspect, the group aims at creating a great place to work by improving staff engagement and job satisfaction. We provide an average of 29 training hours to our employee for upskilling and her well-being initiatives, such as we have a rooftop gardening program. To support the local community, the group provide shared network facility at the two quarantine center in the Lok Ma Chau Loop and in Kai Tak during the pandemic.
Let us now provide an outlook of 2023. Kenny, please.
Thank you. Looking ahead in 2023, we continue providing IoT capability in the era of 5G with enhanced network and additional spectrum. Leveraging the customer insight platform to build full understanding of customer needs to digitally connect the customer experience. Capturing new opportunities with IoT, 5G, and AI in data monetization, as well as accelerating of 5G broadband adoption around all markets, including mass and corporate solution segments. The board is confident that with the steady growth in our core drivers, including the roaming recovery, the group will continue to deliver solid operating results and maintain strong cash flow in the year ahead. Thank you. This is the end of our presentation.
Thank you, Mr. Koo and Ms. Tsang. This is the end of the results presentation. We will now continue to the Q&A session. Let me see. I see a number of questions on the platform, and I will try to group them. A lot of questions are about postpaid subscriber number. One of them, noting that we have improved our post-paid subscriber number by 2%, and that ARPU has dropped by 2% compared to last year. Can you please elaborate on this? Does that imply that our 5G tariff has dropped significantly? What were the 5G ARPU and uptake and penetration, and do we have a 2023 target? Maybe Kenny, you can help with this question.
Okay. Thank you for your question. The 2% drop in post-paid net ARPU was mainly due to the intense market competition, and the impact of unfavorable economic conditions during the fifth wave of the COVID-19 in the H1. However, we saw this decline turn around in the H2 with the gradual recovery of the market in general and competition stabilized. The post-paid net ARPU in the H2 of 2022 actually reported an encouraging improvement against the H1 and grew by 8%. We are expecting this upward trend to continue this year. About 5G subscriptions, the growth was encouraging. As mentioned in our slides earlier, 5G penetration is around 30% of our post-paid customer base in Hong Kong, representing a 9% point increase from last year.
We are confident that the 5G uptake and the penetration rate will continue to rise. Thank you.
Thank you, Kenny. A lot of the questions are about the last position of the company in 2022. A lot of the analysts are interested in management's view on when does management expect the company to break even or turn around? In the event that further economic decline is gonna happen and with rising inflationary pressure, do we have any further measures on cost management to cope with that? Sandy, could you help with this, please? Thank you.
Thank you for the question. Throughout the unprecedented time, we have demonstrated the ability to maintain our market competitiveness, capturing new opportunities and expand our distribution network under a challenging operating environment. We see telecommunication service as essential, like utilities, as mobile networks support people to stay connected and will remain to have market demand. The H1 of 2022 show a small setback for economic recovery, which result in a financial hurdle for the group. We see that this is temporary. We saw a turnaround with the easing of COVID measure and resumption of international travel towards the end of 2022. As we have illustrated in this, our presentation earlier, our key revenue driver, including 5G broadband, Hong Kong post-pay, out band roaming, and corporate solution, have all reported encouraging results in 2022.
We are confident that our enhanced strong network, our 5G uptake will continue to grow, along with our 5G broadband and also our corporate solutions. Which we have some good projects in the pipeline. We are also seeing steady recovery in our roaming service revenue in the first two months of 2023. Taking all these positive factors into account, the board and the management are optimistic about a healthy revenue growth outlook. In terms of cost management, we are always diligent with and controlling our expenditure. Though remaining vigilant during the transition towards recovery in our post-pandemic market, we will continue to pursue our digital focus and introduce new business model and innovative solutions.
Given our peak CapEx for 5G has passed, and operating costs for network expansion and enhancement has stabilized, together with our good portfolio of local post-pay customer, as proven by our healthy churn rate, the group is on track to deliver solid operating results and will maintain a strong cash flow in 2023.
Thank you, Sandy. A lot of the analysts are interested in our cash position. They're wondering, with nearly HKD 4 billion cash on hand at 31st of December, 2022, are there any potential investment of M&A details? Will the company plan on declaring further special dividend? Kenny, could you please help with that?
Okay.
Thank you.
Thanks for the questions. Although there are still uncertainties around the macro environment and on the recovery of local economy, we will continue reviewing our cash position and any potential investment opportunities. With the relaxation of the COVID measures and resumption of business activities, we can now consider other options. We will make decision on the surplus cash at the time of 2023 interim results announcement after taking into account the cash position and any potential investment opportunities, at which special dividend could be considered as an option.
Thank you. One question about COVID and travel restrictions. As COVID measures and travel restrictions have eased, what is the current roaming recovery rate, and how does the company plan to increase roaming revenue and seize further opportunities? Kenny, could you please help?
Okay. Thanks for the question. Following the relaxation of travel restriction in late 2022 as reported, our roaming revenue grew 14% year-on-year. Slowly in the H2 of 2022, our roaming revenue grew 12% against H1 , and 19% against the same period in 2021. With the China border reopened in early February this year, roaming revenue further trend up. Our roaming recovery rate has reached 50%, five zero, in January 2023 when compared with the pre-COVID baseline. We are on track for further recovery this year. To facilitate the market demands, we have recently launched a series of roaming products for our customers. As Hong Kong is increasingly connected with the Greater Bay Area through the integrated transportation network, we have launched a new 5G service plan with seamless connection in the GBA.
Our hassle-free roaming day pass has been very popular amongst our roaming products, and we have received many positive feedbacks from our customers. Our popular SoSIM prepaid card as well, has also transformed it and enabled with roaming services. The rate of recovery will be depending on the availability of flights. According to some latest reports, flight schedules had only resumed at around 40% of the pre-pandemic levels, and it is expected to reach around 80% by the end of this year. We will continue to launch more innovative roaming product to facilitate customers' needs, and we continue working closely with our roaming partner to ensure the quality of our roaming services. Thank you.
Thank you, Kenny. Another question on one of the hot topic these days. Real-name Registration has become fully effective on 23rd of February, 2023. Is there any impact on our prepaid customer base? Kenny, could you please help again?
Okay. Thanks for the question. Regarding the Real-name Registration, we have been working closely with the OFCA in executing the requirements. We have provided full support to our customer for this transition. For example, we have deployed a user-friendly registration platform, sent regular registration reminder messages to unregistered customers. A dedicated team of care specialists was formed in selected stores to assist our customers who have not yet registered. Also, a 24-hour inquiry hotline was set up to deal with customers' inquiries on Real-name Registration matters. In terms of the impact, we saw some frustrations in prepaid number during the year while the Real-name Registration was launched. We expected that will be an adjustment in our Hong Kong prepaid customer base.
We believe that the majority of these unregistered number are inactive SIM customers, so there should be no material effect on our business. Thank you.
Thank you, Kenny. We have quite a lot of questions, but let's have a last question of the day for now, and then any unanswered question, please do not hesitate to email us, and we will further follow up on that. Onto our last question about home broadband service. Do we see that home broadband service provided by our competitor as a threat? What is the company strategy in encountering this competition, and what is the company's update on 5G broadband? Kenny, could you please elaborate on this?
Okay. Thanks for the question. We will not comment on the home broadband performance of the other operators as every company has its own position. At 3 Hong Kong, we aim to provide internet connections with mobility. We don't think that the home broadband service offers by competitors is a threat. Other than that, we have very good partners who work closely with us to provide the best CPE modems and solutions for our customers, leveraging on our best strong network. As mentioned earlier, we have put huge efforts in expanding and enhancing our network. Other than the activation of the 700 MHz spectrum band, our 5G base station number has increased by more than 50% when compared with the third quarter of 2020.
All this allow us to provide deeper indoor penetration within buildings, widen our coverage in rural areas, and deliver a faster 5G net services. Our 5G broadband was a great success since launch. We expected that the revenue contribution from 5G broadband to become more significant with the growing demands. Thank you.
Thank you, Kenny. I think that will conclude our session today. Thank you again for your time, for joining. Of course, to Kenny and Sandy. Have a good night. Thank you.