Good afternoon, ladies and gentlemen. Welcome to SmarTone Telecommunications Holdings Limited Annual Results Announcement and Management Presentation for the Financial Year 2023 and 2024. First, may I introduce you to the executives here with us today, Ms. Fiona Lau, Executive Director and Chief Executive Officer. Mr. Stephen Chau, Executive Director and Chief Technology Officer. And we have Mr. Vincent Tung, General Manager of Finance, with us today. The briefing will begin with a slide presentation by Ms. Fiona Lau and Mr. Stephen Chau, followed by a Q&A section. If you would like to ask a question during the Q&A section, please submit your questions through the messaging tab on the webcast page. Now, may I invite Ms. Lau and Mr. Chau to begin the presentation, please.
Good afternoon, and welcome to SmarTone FY 2024 Annual Results Presentation. For today's presentation, Stephen and I will first take you through the business review. After that, I will take you through the financial review and outlook section before opening the floor for questions. As you can see on this slide, overall, SmarTone delivered a set of results that demonstrated the resilience of our business and profit amidst a challenging operating environment. For the year reported, service revenue excluding MVNO, SMS, and prepaid was up 2% year-over-year. Roaming revenue grew substantially, increasing 44% year-over-year. 5G penetration continued to increase steadily and reached nearly 40% as of June 2024. Our mobile postpaid ARPU was stable at HKD 224. It is worth noting that our 5G ARPU is two times our 4G ARPU. With regards to our two growth drivers, first, 5G Home Broadband.
It has continued to grow strongly, with revenue increasing 33% year-over-year and EBITDA rising 70%. For the other growth driver, our enterprise solutions revenue registered a 17% year-over-year growth, and the business continued to deliver material contribution to profitability. Our full-year dividend, therefore, per share remained the same as last year at HKD 0.32, representing a 75% payout ratio and an attractive yield of 8.4% based on today's closing price. These are the financial highlights for the last year. That said, we do have experienced substantial headwinds in the last year. SMS revenue has come down substantially. There is no longer a need to deliver COVID-related SMS in the last year, unlike during COVID times. MVNO, it is a highly price-sensitive segment, and few years ago, we have decided not to use our 5G for MVNO.
There has been a gradual decline in revenue in our MVNO segment. In the local mobile market, pricing has continued to be highly competitive, and while our premium customer base has been quite stable, the lower segment does face quite a lot of pressure. I'll take you through the numbers one by one. Throughout the year, SmarTone's business maintained a strong performance and our core 5G postpaid customer base continued to grow. With our customer base reaching 2.7 million in June 2024. Despite intense competitive pressure, our ARPU has maintained a premium, remained remarkably stable despite intense competition. With 5G ARPU double that of 4G, it is a testament of the differentiation between 4G and 5G services. And the benefits are clear, especially when you use it for video streaming, gaming, as well as AI or VR applications.
We see that there is clear difference in propositions between 4G and 5G, and the pricing should reflect that accordingly. We believe the resilience of our customer base and the premium level of ARPU underscores the high quality of our customers whom we serve with superior service and network performance. On roaming, at SmarTone, we believe in the total ownership of our customer's experience, including when customers are overseas using our partners network. We understand that when customers travel, the reliability when using applications such as Google Maps, WhatsApp calls, Uber is extremely important. We want customers to know that we take care of their roaming experience the same way as we take care of how they use it at home. There are a number of things that we have done. We offer free dedicated hotline for customers.
We monitor real time our roaming partners network performance so that we are promptly aware of any issues affecting our customers' roaming. For every single customer who return to Hong Kong after their travel, we get immediate feedback from them. We use a five-star survey the moment they return to Hong Kong. In our SmarTone CARE App, customers can actually pin down the locations easily when they feel there are issues with their reception. In addition to all the above, collecting all the feedback from the customers, we have launched our SmarTone's Roaming Academy. We provide tips for our customers before they travel.
These tips include minimizing data usage, for example, by switching off iPhone synchronization, how to switch on in-flight roaming, switch it off if you don't need it, how to check details of your roaming plans on SmarTone CARE App, and how to make roaming calls. We hope these tips will educate our customers on how to enjoy a smooth roaming experience. With that, by delivering better service and launching more customer-oriented offerings, we were able to achieve strong growth in revenue. During the year, our roaming revenue increased 44% year- over- year. Our outbound roaming revenue especially has recovered to 102% pre-COVID level. In fact, while voice roaming has declined as many customers now switch to use WhatsApp calls, outbound roaming revenue among consumers have recovered to 141% of pre-COVID level as of June 2024.
Furthermore, the percentage of our postpaid customers using our own roaming service has doubled that of the pre-pandemic times. This is done by us offering value for money multi-day pack, which has proved to be very, very popular among our consumers. We are encouraged by these developments, and we believe that the momentum and the opportunity to further grow the roaming business is very strong. On 5G Home Broadband, which is the other growth driver, we are very excited to report the continuous and strong growth of our 5G Home Broadband business. With dedicated effort to grow the product, we now have the largest market share, and we are recognized as the number one best preferred 5G Home Broadband provider.
The popularity of our product stems from the fact that it is easy to install, cost-effective, and provide reception in all buildings and remote areas where this becomes the only way to get good Wi-Fi. Outside of home, there are more and more use cases that customers have used this product for. For instance, working in a coffee shop or using it for pop-up stores for SMEs, et cetera. 65% of new orders last year come from cross-selling into our existing customer base, with our remaining one-third from household fixed fiber consumer base previously untapped by SmarTone. This opens up new touchpoints and new areas of growth, and potentially where we can see more synergies with our group company, Sun Hung Kai Properties. What we've also observed is that the attrition rate for this product is extremely low. It is so much lower than our mobile business.
We believe that this is a strong proposition and that our customers are very sticky using our product. As you can see, over the years, the business has delivered a strong and consistent performance. 5G Home Broadband has now become a core business pillar. During the year, revenue increased 33% year-over-year, while EBITDA rose 70% year-over-year, demonstrating strong growth potential alongside emerging economies of scale. In summary, the 5G Home Broadband has now transformed into a core business delivering a significant contribution to the company's profitability, and we will continue to invest more resources to grow this product and to expand into the smart home segment. I will now pass on to Stephen to talk about enterprise solutions and our network and AI initiatives.
Thank you, Fiona. I would like to start the enterprise solution business first. We are very pleased to see there is an increasing interest from our enterprise customers looking for solutions to enhance their productivity and also to digitalize their operation process. Over the years, we have expanded our portfolio to cater for different industry need. Our solution now include SmartH ome, SmartM all, SmartHotel, just to name a few. Our enterprise solution business has delivered consistent double-digit growth over the years. During the year under review, revenue increased 17% year-on-year, and the business is delivering material contribution to our business. The growth momentum is continuing, and enterprise solution is becoming one of the key business driver. Now, I would like to share with you two very successful examples.
We are very happy to share that our AI-enabled SmartT ransport solution, which was co-designed and adopted by Kowloon Motor Bus, was awarded the top five best mobile innovation for digital life by the Global Mobile Awards at the MWC Barcelona earlier this year in Barcelona. For those of you who may not know well about this award, you can say this is actually the equivalent of Oscar in the mobile world, with hundreds of operators globally participating in this competition, including, for example, China Mobile, China Unicom, Deutsche Telekom. SmarTone is the first-ever operator in Hong Kong to win this prestigious mobile award.
By utilizing 5G and AI technologies, the smart transport provides 5G Wi-Fi on the bus and real-time information on the occupancy, as well as the queuing information on those major bus exchange, which is used by passengers to plan their journeys and also the bus operator to improve the operation efficiency and the fleet management. The smart transport solution is a great example which illustrates our ability to develop innovative solutions for the corporate sector. I feel very honored that we get this award, which will well recognize our significant contribution to smart city development in Hong Kong. In addition to the smart transport, another great example, SmartHotel, is a ground-breaking solution we launched in conjunction with our parent group to cater for the needs of the hotel sector. What is remarkable here is that it's a fully functional mobile-enabled SmartHotel solution.
The first of kind in Hong Kong. To give you a better idea, customer can simply use their mobile phone to remotely check in and check out, use it as a mobile room keys, control in-room smart living options, and book a range of hotel facilities. You don't need to have the hassle to queue up at the hotel desk. The solution can be customized to integrate with the legacy hotel management system and automate a range of functions to enhance operational efficiency. In summary, we believe SmartHotel has a lot of growth potential, has a high degree of adaptability to deploy across the hotel industry, Hong Kong, and even outside Hong Kong. Now, I would like to share with you all what we are doing on the network. Here at SmarTone, we are continuously investing to make Hong Kong proud.
First of all, the SmarTone network is now 5G-Advanced ready, and it supports intelligent dynamic network slicing for different applications and use cases. It also supports AI-enabled resources management to provide service assurance in mission-critical applications. It will be very useful for the development of the innovative application to meet different enterprise need. Furthermore, we are continuing expanding our coverage and capacity to deliver the best customer experience anytime, anywhere. In anticipating of the population movement, we have proactively expand our coverage to all the mega infrastructure. Venue like GO PARK, a massive entertainment spot and retail venue, the airport, and the Kai Tak Sports Park. This year, we have added more than 100 base stations throughout Hong Kong to enhance our coverage as well as the capacity and improve further the user experience.
We have deployed the 700 MHz spectrum across Hong Kong to further extend our deep indoor coverage everywhere. Also, with the highest spectrum per user, we can provide better speed performance even in congested area, where we can provide exceptional network performance for our customers commuting in MTR even during peak hours. As a leading operator in Hong Kong, SmarTone is committed to transform Hong Kong into an innovation and technology hub. In addition to deploying AI for our enterprise customers, at SmarTone, we are also passionate about using AI to improve our customer experience and drive efficiency in our business and network. Just give you a few example on what we are doing. We're using AI to score every single customer individual and look for area for improvement, so as to prioritize our network resources and the improvement in the user experience.
We are also using AI to interpret customer attitude and the sentiment, and using the result to proactively enhance our products and services to improve customer satisfaction. Leveraging data analytic to deliver highly personalized and timely offers, which will greatly enhance the customer loyalty and generate great customer engagement with us. Using AI also to add and predict network traffic in real time so as we are able to make the energy efficiency further enhanced without compromising network performance. I will end my part of the presentation and hand back to Fiona.
I would like to talk a little bit about our cybersecurity risks. As a trustworthy and reliable network service provider, SmarTone is dedicated to protecting its customers from the growing threat of cybersecurity risks, including identity thefts, data privacy leaks, and scam calls. I now take the opportunity to discuss some initiatives from us. You may have read in the news that many Hong Kong citizens fell into money traps when they receive calls from customer service, claiming that they need information of the accounts. Back in March this year, we are the first in Hong Kong to launch an innovative free service that allow our customers to verify the identity of our staff. Typically, such verification is done towards the customers to verify your identity before providing service to you.
For SmarTone, for any calls you receive claiming to be a SmarTone representative, you may first ask to verify our staff's identity. The way it works is that the staff will read to you a four-digit verification code, which you can check in our SmarTone CARE App. The same app at the application that you check your bill or buy roaming data packs. If the verification code matches, you can feel assured that the call is legitimate. We have paid special attention to not just do it via WhatsApp or SMS, as we feel that the most reliable source of information should be our CARE App that our customers use every day. To further protect communication channels with our customers, SmarTone's SMS, social media, and WhatsApp accounts, and the links that we use are all officially verified to give our customers the confidence that they are dealing with SmarTone.
Moreover, we have a number of services to safeguard customers against cybersecurity threats. Data Guard. Think of it like an antivirus software, but tailored for mobile phones. Many of us have installed antivirus software on our laptops, but not many have done so for our phones. Yet, if you think about it, the phone might have even more of your personal data. Having a software that can detect unusual data transfer patterns and promptly alert you to take actions will give customers extra peace of mind. Call Guard. It minimizes junk calls, which are increasingly annoying, as well as filtering out the identifiable potential scam numbers, reducing the potential of cybersecurity threats. We have also launched this add-on number on the same phone on-demand service. Many times, we are asked to provide numbers for online shopping, different promotions, and logistics services that we use.
We may not feel comfortable giving them our personal numbers. This add-on number feature will let you generate a new number on demand, and you do not need to change any SIM or phone to get the calls or messages. We believe this gives our customers both convenience and an extra safety net in dealing with uncertain circumstances. Moving forward, SmarTone will continue to innovate its services to address these concerns, as well as to educate and support customers to navigate these widespread threats. Finally, on this section, regarding environmental sustainability, SmarTone recently introduced a new carbon thin coating technology for the HVAC condensers of our chilled units. The application of the innovative coating has delivered measurable environmental benefits, including a 6% reduction in power consumption, as well as enhancing the efficiency and longevity of the HVAC systems.
This upgrade demonstrates SmarTone's commitment to implementing sustainable technologies and to reduce our environmental footprint. As a trusted partner, SmarTone launched the SmarT Parenting Academy to empower parents to confidently guide the children through the online world. As for community and wellbeing, we supported the charity marathon back in 2024 with 5G Wi-Fi service in the venue. In September last year, SmarTone provided free 5G Home Broadband routers and services to support residents impacted by certain internet outage. In the last few months, the biggest news in town was Olympics. To support the cause, SmarTone connected to community by providing free local data to customers so that they can watch the Olympics anytime, anywhere. To express gratitude to our 35 athletes who brought so much pride to Hong Kong, we are providing them with free lifetime local data for their hard work and dedication.
In addition, SmarTone is the official sponsor of the Hong Kong Paralympic team. Finally, on the awards. With our relentless pursuit of customer satisfaction, SmarTone has been recognized and awarded for its exceptional service in the telecommunication industry. During the year, we have received a number of awards for our sales, our network, our CARE App, and online store from credible and reputable organizations. We are particularly proud of the fact that five of our sales staff who won the Distinguished Salesperson Award, organized by the HKMA. SmarTone is the only communications provider to be named the top five of the award, and this also demonstrates our commitment to developing our employees. In summary, these prestigious awards demonstrate our commitment to providing excellent customer experiences and network performance. This concludes our business review section. I will now move on to financial review.
As mentioned, SmarTone delivered a set of results that demonstrated the resilience of our business and profit amidst a challenging operating environment. Service revenue, excluding handset sale, was down 1% year-over-year. Service revenue, excluding MVNO, SMS, and prepaid, which refers to the core business we have, was up 2% year-over-year. Operating expenses decreased by 2%. Profit, compared to prior year's reported profit, has increased 75%. Profit was in line with prior year's profit, excluding the provision made for potential financial investment loss in FY 2023. Net cash increased 39% to HKD 1.5 billion. The board has proposed a final dividend of HKD 0.175 per share, making full-year dividend HKD 0.32 per share, same as last year. As you can see on this slide, despite the intense price competition and the challenging macroeconomy, our core service revenue still increased 2% year-over-year, demonstrating the resilience of our business.
Despite high inflation environment, we are pleased to say that through vigilant cost control and implementation of a number of efficiency initiatives, we have been able to achieve a 2% year-over-year reduction in OpEx. This has allowed us to reprioritize resources to key growth areas such as 5G Home Broadband and enterprise solutions. We have also achieved a slight decrease in depreciation and amortization through cautious control over CapEx in recent years. Notwithstanding intense competition, our EBITDA margin has remained stable, which reflects the resilience of our core business and premium customer base. Going forward, we will continue to maintain stable OpEx through efficiency and productivity enhancement without compromising quality and continuous investment into our network. In terms of CapEx, core CapEx has been relatively stable, down 1% year-over-year compared to last year.
Reflecting stabilization of capital expenditure following the 5G rollout and our disciplined approach towards network investment. Even including the addition of 100 cell sites last year, which Stephen mentioned, we are still able to maintain a slight decrease in our core CapEx. Spectrum costs have peaked in FY 2023 and have also decreased 1% year-over-year. We expect it to gradually decline in the future. Our healthy operating cash generation has resulted in an increase in net cash, which is up 39% year-over-year. In sum, our business and profit have remained resilient despite intense competition and a challenging environment, and notwithstanding the various headwinds that I talked about in the beginning of the presentation. We have expanded our premium customer base and increased our 5G penetration. We have built two growth engines with emerging scale, our 5G Home Broadband and the enterprise solutions.
They have become the core business with high growth potential. We have exercised vigilant cost control over CapEx and OpEx without sacrificing quality. Our full-year dividend per share remained the same as last year at HKD 0.32, representing 75% payout ratio and an attractive yield of 8.4% according to today's closing share price. In terms of the outlook, I would like to say that we expect the challenging operating environment will continue. Intense competition will persist. Nonetheless, we believe that with our outstanding customer service, exceptional network performance, which we provide to our premium customer base, SmarTone will remain resilient against such pressure. Growth momentum on roaming remains very strong. Our 5G Home Broadband and enterprise solutions are also growing well, especially 5G Home Broadband, which is maturing to be a very sustainable growth pillar.
As elevated cybersecurity risks persist, we will offer more products, support, and education to enable our customers to face up to such challenges. We believe that it is times like these that our trust-based relationships with our customers will pay off. Finally, as always, we are committed to invest efficiently and building the best network for Hong Kong in the long term.
Thank you, Ms. Lau and Mr. Chau. Now we will have the Q&A section. Please raise your question through the Messaging tab on the webcast page. Our management will answer your questions. We will read out the questions and take similar or repetitive questions will be grouped together for management to answer. The first question is, do you foresee further growth in roaming, given roaming revenue has already staged a larger recovery?
Right. We have quite a strong year last year in terms of our roaming revenue. If you look at the consumer segment, our recovery is higher than the actual traffic that we're seeing from our consumers. We are benefiting from offering more value for money multi-day packs, which we haven't really pushed in the past, but we are promoting quite a lot this year. As a result of that, our penetration of our customers using our roaming products has doubled. We still see a lot of room to grow. We believe that offering value for money products is a good strategy, and we'll continue to pursue that. We feel that in a market that a lot of cheaper prepaid products or somewhat obsolete Wi-Fi egg, we believe that we can actually capture a lot of those roaming usage within our customer base.
The next question is, do you think ARPU will be under pressure?
Okay. ARPU has always been under pressure, given the fact that the market competition is very intense. I think it has been quite a consistent trend in the last years. What we have seen, however, is that within our premium customer base, we are able to sustain quite a steady ARPU. I think our premium customers really like us for the superior service and network quality that we're providing. Where we see more pressure is among the lower tier segment. As you can see, as I said, in the MVNO segment, we do see quite a lot of pressure. These are our customers who are quite price sensitive. We'll continue to navigate.
We cannot change what we cannot change, but I think what we'll do is to continue to invest in our service and our network, and we believe that with more of the 5G applications coming on, the 5G proposition will be stronger, and we are expecting a growing 5G penetration over time. You'll see that our 5G ARPU is double that of the 4G ARPU. I think with the applications coming, with our strong proposition and our network, we'll navigate the challenging ARPU competitive environment.
The next question is, what is the outlook for CapEx?
In terms of the CapEx, as I showed you before, I think the CapEx has peaked. We have fully rolled out our 5G network and the equipment. We do not foresee that there will be a big jump of CapEx. In fact, I think in the coming years, it will come down. I think that said, we'll still continue to look for improvement areas in terms of our network, but we will invest efficiently. I think that's the philosophy that we'll hold.
[Non-English content]
[Non-English content]
[Non-English content]
[Non-English content]
[Non-English content]
[Non-English content]
The next question is, how much will SmarTone invest in the next few years to further enhance its network performance?
Thank you. I think I can't give you numbers, for example, how much we can invest in the next few years. But definitely we will continue to invest to make sure we are maintaining our leadership in the market and offering the best experience to our customers. Overall, we expect, as Fiona just said, the CapEx level will not, we already reached the peak, so we expect will come down over the next few years as well.
The next question is, will you start 5G-A commercial service in this financial year?
I think we already get our network ready for 5G-A. In fact, we are running some pilot, including different application utilization here and there. Regarding a full commercial service, we expect it would take a little bit more time. Probably we want some friend user trial this year, followed by a more widespread launch in the next year, in one or two years time.
We will now take the last question before concluding the briefing today. [Non-English content]
[Non-English content]
This will conclude today's briefing. Thank you very much for joining us.