Good evening, and welcome to the HKT 2022 interim results presentation. In attendance, we have Susanna Hui, Group Managing Director, and Patrick Poon, Chief Financial Officer. We will start with the presentation, followed by Q&A. I'll now turn to Susanna.
Good afternoon, ladies and gentlemen. Thank you for joining this interim result presentation by HKT. Basically, we commenced the year 2022 with some positive momentum. Unfortunately, the onset of the fifth wave in February led to a return to lockdowns and relatively strict social distancing measures, as you all know, and Hong Kong's borders relatively remaining shut, which adversely impacted the overall economic activity. GDP contracted by 3.9% and 1.4% in Q1 and Q2, respectively. In the face of these challenges, HKT still managed to record steady growth, although I must say that it's at a slower than expected rate. Revenue grew by 3.3%, and if we exclude mobile product sales, revenue was up by 5.4%.
EBITDA and AFF were both up by about 2% respectively. This has allowed us to announce an interim distribution of HKD 0.3136, representing an annual increase of 2.15%. Looking ahead, I think positive factors which might bring in a rebound in the coming months in the second half of the year include further relaxation of quarantine rules and also boost of retail sentiment by the most recent round of Consumption Voucher Schemes as well. Let's focus on mobile now. During the first half, we continued to consolidate our market leadership with subscriber base growing 1% to over 3.3 million, representing net additions of 42,000 for the past 12 months.
In particular, you can see here that our premium 1O1O base also expanded by 2%, despite a widening churn of 0.7%-0.9% in the recent few months amidst the relatively weak macro conditions, and also we saw an escalating impact of immigration during the period. Mobile services revenue increased by 2% and driven by 5G upgrades and also mobile enterprise solutions. Contribution by roaming and IDD was still relatively insignificant, although we did see a slight improvement from a low base in 2021. Future meaningful contribution can only be expected after quarantine rules are further relaxed. Postpaid ARPU was steady at HKD 187. Looking at the 5G penetration, it's still on the growth trajectory.
Our 5G customer base hit 918,000 in July, and we expect that by the end of the year, penetration will reach 30%. This upgrade cycle has to be supported by a wide range of 5G handsets and other devices. Including here, not only are the mobile popular mobile handsets such as iPhone and Samsung, and we expect that second half would be with the new iPhone launch, usually the take-up will also accelerate. We also have exclusive access to new phone mobile phone disruptors, such as the Nothing Phone, as well as a wide range of IoT devices. This actually position us well to support the growing system of AR/VR applications and eventually applications developed for the metaverse as well.
Looking at our 5G network, our leading position in 5G is underpinned by having the leading 5G network in Hong Kong and, delivering the best speed and reliability on the back of the largest number of cell sites, as well as connected by fiber backhaul. Starting with the acquisition of dedicated 5G spectrum in 2019, we have rapidly achieved territory-wide coverage over the past three years. We have now achieved territory-wide coverage for all the 5G. Obviously, we will continue to improve the network to provide the best experience for our users.
I think our network is well distinguished by the fact that we have deployed on a very large scale Massive MIMO for the C-band, as well as 4x4 MIMO for the low-band spectrum, including the recently acquired 700 MHz to enrich capacity layer as well as uplift the overall network speeds. Most of the mobile CapEx has been spent. Most of the 5G mobile CapEx has been spent, and we expect to complete the rollout of other C-band spectrum in 2023, as well as launch our mmWave spectrum in 2024, which will allow us to offer campus-style coverage and also Network Slicing.
We are also pleased to announce that our team rapidly deployed 5G network to cover the new East Rail Line Cross-Harbour Extension, which was opened in May this year. Obviously, along all the MTR stations, we are the only operator which has dedicated refarming of the 2100 MHz spectrum for 5G. Therefore, you can see from the various independent testing, speed tests, basically the HKT users are enjoying the fastest download speed. Now another critical and unique element of our network is of course the integration of fiber and mobile. We are pleased to share with you all that we are the only operator which has 10G capacity for the entire network, 10G fiber capacity for the entire network.
This is important because it delivered the last mile access to provide reliable fiber broadband service, but it also provide high-speed backhaul to all of our cell sites. During the first six months, we continued to expand our reach and speed, particularly in villages and remote areas and, for instance, areas like Tai O, we also have 10G coverage for the fiber to the home, and in support of the government broadband subsidy scheme for remote areas. Obviously, in further remote areas where physical connection is still not feasible, we are utilizing 5G for last mile access as well.
Now, looking at our broadband services, with the onset of the fifth wave and obviously the continuation of the hybrid work arrangements, consumer demand for our reliable broadband network remained very robust, which obviously benefited our Fiber to the Home subscriptions as well. As you can see here, we have 5% growth in terms of our Fiber to the Home subscriptions to 964,000, as at June end. Our overall subscriber base remained very steady at 1.46 million, and this is already after taking into account the headwind of heightened immigration trend in the first half.
In order to support the multiple broadband users at home, we also saw growing uptake of Home Wi-Fi with the subscriber base growing to 339,000, with an ARPU uplift of HKD 96. We also see growth in terms of the B2B side, as we continue to win large number of new projects with different property developers who view smart living solutions in new developments a must-have to new homeowners. We continue to launch new products and technology upgrades in order to spur demand and improve user experience.
In March this year, we launched the Stay Home Super Combo, basically cross-selling the different services to the household, catering for the different needs of the, you know, different individuals and offering flexi plans as well. We have seen satisfactory results on that. We have also launched interactive AI robot Cappy, which is a child-friendly curator service aiming at promoting new language acquisition and interactive STEM learning at home. Again, this is targeted to a new segment, hopefully also increasing the revenue on the consumer side. Another new service that we have launched is the 2.5 GB fiber to the home service to optimize the high speed, especially with the new Wi-Fi six routers available in the consumer market.
This is not only targeted at the tech savvy gamer segments, but also it would help solve the bottlenecks of multi-users at home as, you know, everyone in the household are using broadband at the same time. Obviously, another key component in our HKT home proposition is the pay TV services, our Now TV. Well, our Now TV has the widest content portfolio with sports, kids, and education content, as well as obviously, drama and Hollywood titles and unique documentaries. As the home of sports, we are the only platform which can provide a full suite of simultaneous live football coverage, including Premier League, Champions League, and other popular sports such as tennis, golf, and F1.
We are also pleased to announce today that Now TV has secured the exclusive broadcasting rights of all the 64 matches of the World Cup. This time, the World Cup matches will be played in Qatar in November and December this year, and the matches will be broadcast in 4K. As the matches time are quite audience friendly, it started from early evening, from 6:00 P.M., and we expect that this will provide a further uplift to the subscriber base as well as to the ARPU for our Now TV services.
For the first six months, we are able to report sustained growth in our subscriber base, which hit 1.38 million, a growth of 2%, amidst a very intense competition from the various D2C offerings, as well as we mentioned before, there is an escalating levels of immigration during the period. During the first half, we also launched a new Android TV box in conjunction with Google, which allows users to enjoy Now TV as well as other Google Play apps. We have also included localized Cantonese voice command in this new set-top box. Now, on the commercial sector.
Our enterprise business continued to fare well, and later on, our CFO will be able to share with you that actually the revenue from the commercial side has increased by almost like 6%-8%. This is made possible by our again our unique offering of the fixed and mobile converged solutions leveraging on our 5G and fiber infrastructure. It's a blend of the use of 5G and fiber in order to support the various industry verticals such as the retail, property, and construction segments. Beyond Hong Kong, we are expanding into China, Mainland China as well. We have accelerated our build and sales coverage in China.
HKT has established significant presence in the Mainland Chinese market, deploying over 65 PoPs in more than 45 cities offering end-to-end network and managed services such as enterprise managed services, premium internet, and SD-WAN as well. We have been able to win significant contracts in terms of the retail segment across the different parts of China, serving domestic as well as the multinational enterprises, and especially focusing on the cross-border networking. Recently, HKT was also awarded the SD-WAN + Cloud Network Convergence award from the MIIT in China, and we have also established strategic partnerships with the three telecom operators in China to extend our market reach.
With the current momentum, we are targeting to grow this revenue from China to around HKD 1 billion within the next three years. International business has had a relatively robust first six months as we benefited from a rebound in terms of global voice revenue, as well as the booking of some cable sales, cable project sales. We are expecting quite a decent growth in the second half as well. Now, leveraging our market position on the telecom side, we are also scaling up our new digital business for the past few years. Central to it is our loyalty and e-commerce platform, The Club.
It made significant strides forward with now over 3.63 million members registered on The Club platform, which represented a 10% increase. With the convergence of both redeem and shop experience, we see the gross merchandise value grew by more than 18% in the first six months. In the first half, we have also launched a new credit card together with Citibank, co-branded card with Citibank in May, which provides card owners with a very compelling redemption options and also a lot of attractive merchant offers, and the flexibility to convert Citi Points into Clubpoints as well as use of Clubpoints for credit card payment. This will increase the liquidity of our Clubpoints as a sort of currency.
Turning to our payment service is also another a new area in the digital side. Tap & Go is also participating in a new round of CVS in April and also in the second round which started in August. This is obviously to help promote the digital payment initiative by the government across the whole of Hong Kong. As a result of the CVS, the Consumption Voucher Scheme, the number of accounts under the Tap & Go reached 3.5 million by June end. Transaction values, we have seen increase of 253% for the period.
It's worth noting that our customer base is quite unique, which are mostly Gen Z and millennial customers, and obviously a lot more tech-savvy. At the same time, on the merchant side, we also see increased adoption of our merchant payment solutions, which increased by 156% during the first six months to 7,200 subscriptions. With the next round already started a few days ago, we are confident that the adoption of Tap & Go and our merchant services will expand further. Now, another new pillar under the digital business is the DrGo, the MedTech platform. We saw accelerating adoption and usage during the first half, especially in the midst of the fifth COVID wave.
The platform now has over 330,000 registered users, representing a growth of 85%. Monthly video consultations handled on this platform exceeded 1,100 in the first six months. In terms of the service portfolio, we have also extended to include not just GP, but also pediatrics, traditional Chinese medicine, as well as mental wellness counseling sessions. We have also expanded the partnership to include more than 15 consultation partners, pharmaceutical companies to provide vaccines, vaccinations of various sorts, as well as insurance partners as well. In addition to expanding the products and services available on the DrGo.
DrGo health store. With a view to the future, HKT has also staked a claim in the Metaverse by partnering with The Sandbox to deliver a new digital experience for our customers. Given our broad portfolio of assets across HKT, as well as the PCCW Group, I think we are well positioned to provide innovative and unique experience. We have a role to play on the various aspects of the Metaverse, including the content side, the platform side, the infrastructure side, where we have all the 5G. Also the enabler, which include the identity verification, and also, as just now, we talked about payment as well. We are well positioned to play a role in all the different aspects of the Metaverse.
Of course, this is still in the initial stage, and we just want to empower our teams to think ahead to see whether there are opportunities for us in this new digital world, and we are obviously looking forward to providing services in the Metaverse. Turning to our corporate social responsibility on supporting our community and building a sustainable future. In the first half, we have stood by the community in many ways, and we have also leveraged our expertise to help the city stay connected in this critical time. We have provided free telecom service to the eight new quarantine facilities in Hong Kong.
Close to 1,300 quarantine units, 3,000 government COVID hotlines, as well as free mobile service to healthcare workers, as well as the underprivileged. Through offering 100,000 free consultation sessions on our healthtech service, DrGo, we help alleviate the pressure on the healthcare, on the public healthcare system as well. We also have a team of very passionate volunteers helping the NGOs, as well as showing care to the elderly and the underprivileged sectors in Hong Kong. As for tackling climate change and building a sustainable future, we took multifaceted actions, including securing sustainability-linked loan facilities, reducing our energy consumption, our operations' carbon footprint, as well as promoting upcycled mobile products to consumers to create shared value.
Looking ahead on the consumer side, I think we will continue to maximize the synergy of our quad play, cross-selling every services to every household and to every individual, and leverage our group assets to establish new competitive edges. On the B2B side, we are committed to helping enterprises and public bodies in Hong Kong to accelerate the digital transformation journeys, whilst in parallel expanding into China, as I shared with you just now. We will continue to nurture our expansive digital ecosystem, integrating our loyalty program, and provide a wider array of online services. With our multi-pronged growth, strong and diversified base, we are confident that HKT will be well positioned to capture any upside in the post-COVID economy.
With that note, I will pass to our CFO, Patrick, to share with you the financials. Thank you.
Thank you, Susanna. Let's have a recap on our key financial lines for the first half 2022. Our AFF continued to show a solid growth of 2.2% year-on-year to $305 million. Our service revenue was up by 5.4% to HKD 1.91 billion. Including handset sales, total HKT revenue went up by 3.3% for the period to HKD 2.071 billion, with lower year-on-year mobile product sales, which dropped by 16% to $165 million. Growth is mainly driven by continuously strong broadband and local data connectivity demand, encouraging 5G uptake on the mobile side, as well as higher international voice wholesale revenue in the first half.
Our total EBITDA for the period was up by 2.1% to $748 million. Our NPAT grew 0.5% to $245 million. Looking into the details of our TSS segment, our local TSS service revenue grew by 3% year-on-year, reaching $1.022 billion for the first half. Local data and broadband services continue to be the key growth drivers. As mentioned by Susanna just now, the accelerated demand for digital transformation and smart city initiative from both enterprises and public sector in Hong Kong, as well as mainland China, leading to our global data revenue to increase by 8% year-on-year, leveraging our fixed mobile integration technology.
With the hybrid work arrangement and online learning being the new norm, especially during the fifth wave of COVID-19, demand for our high speed and reliable broadband network remains strong and increasing. As such, our broadband services revenue records a 3% year-on-year growth for the first half. The total local data services registered a solid revenue growth of 6%. Pay TV services revenue edged down by 2% to HKD 154 million, due to challenging economic conditions, competition, and immigration impact. We counter the impact with our comprehensive content lineup, with various live sports portfolio, and also the Asian and Western drama series to e-learning activities and entertainment for the young segment. If we include our international business, of which the revenue rose 9% year-on-year, driven by the global voice wholesale business.
Our total TSS revenue increased by 5% to $1.487 billion. Owing to the thin margin contributed by the global voice wholesale business, TSS EBITDA margin was slightly diluted to 35% versus 37% last year. The overall EBITDA of TSS business has maintained a steady 2% growth to $526 million for the period, also benefited from the continued operating efficiency and cost-conscious cost control. Now, let's turn to our mobile business. Mobile service revenue rose 2% to $468 million for the first half 2022. Of which, local core revenue was up by 2% from $442 million to $450 million, driven by expansion of postpaid customer base to 3.31 million by the end of June.
The expanding share of premium 1O1O customers. The continued uptake of 5G customers reached 800,00 and 67,000 , representing 26% of the total postpaid base, and also the higher revenue contribution from mobile enterprise solutions. Postpaid exit ARPU was stable at HKD 187 at the end of June. Our sales of handsets slowed down by 16% year-on-year to HKD 165 million as a result of supply chain disruption and the positive impact in the first half of 2021 from the delayed launch of popular handset models. Total mobile EBITDA was up 2% from HKD 266 million to HKD 172 million. Mobile services EBITDA also up by 2% to $270 million, with mobile service EBITDA margin steady at 58%.
Let's have a closer look at our operating expenses. TSS and mobile achieved 10% and 7% OpEx savings, respectively, attributable to our continuous focus on efficiency improvement across each business segment through accelerated business process digitalization and optimizing offline to online O2O sale channels and retail footprints. On mobile network operation side, efficiency gains were also captured, mainly from the sales side reconfigurations. Overall, the group reported an 8% year-on-year OpEx savings to $281 million, with OpEx to revenue ratio improved from 15.2% to 13.5%. Apart from OpEx, we are also exercising cautious control over our CapEx spend. Our total CapEx for the first six months was further lowered to $152 million, representing a 2% year-on-year savings.
We record a 10% savings on mobile CapEx, as we have completed our territory-wide 5G coverage rollout. TSS CapEx was stable year-on-year, with focus on meeting continued demand for our fiber to the home services and customized solutions for enterprises. Accordingly, the overall CapEx to revenue ratio has dropped from 7.7% to 7.3%, which is well contained within our stated guidance. Next, is the AFF. We have already covered EBITDA down to CapEx just now. CAC and license fee went up from HKD 69 million to HKD 76 million, mainly due to the reassigned 900 MHz and new 700 MHz mobile spectrum fee paid during the period. Fulfillment costs in respect to customized commercial projects increased to HKD 40 million.
Payment for right of use asset, which is representing rental payments, decreased significantly from $104 million-$88 million, reflecting our effective and successful shop rationalization strategy. Payment for finance costs increased to $45 million, caused by higher market interest rate. This was partly offset by the lower tax payment during the period, mainly due to timing variance, as major payments will be made in the second half. As a result, the overall AFF for the first half of 2022 grew 2% year-on-year to $305 million, translating into an interim distribution of HKD 0.3136 per SSU in issue. Income statement. For the detailed P&L, we have basically covered from revenue to EBITDA lines just now. Depreciation and amortization increased by 3% year-on-year to HKD 362 million.
This was mainly caused by the higher 5G mobile license fee amortization cost. Explaining the AFF slide, our P&L finance cost also increased by 12% to $80 million, caused by higher market interest rate. Income tax expense was steady at $56 million. Our net profit for the first six months of 2022 was kept steady at $245 million, up by 0.5% year-on-year. Turning to our gearing position, our total gross debt at end June was $5.69 billion. Corresponding gross debt to EBITDA ratio was still being maintained at around 3.45x, same as December last year.
As of today, we have total liquidity of around $1.8 billion, including undrawn banking facilities of around $1.6 billion and $261 million cash on hand. We continue to carry an investment grade rating of BBB or Baa2. Lastly, on the debt maturity profile, we don't have any bank loans or bonds maturing this year. Our effective interest rate for the first half slightly went up to 2.6%. Our current proportion of fixed to floating rate debts is approximately 60-40, compared with the 50-50, December last year. More debts are now on fixed interest rate to counteract the potential adverse impact from the interest rate hike. We shall continue to monitor the market environment such that we can further enhance and optimize our debt profile and structure when appropriate.
The average debt maturity is approximately four years. This ends my presentation. Thank you.
Let us now open up to questions. The first question, what is the outlook for roaming services given the recent relaxation in quarantine times?
Thank you for your questions. I think in the first six months, actually, we already saw roaming up by around 6%. As I say, it was from a very low base. If we look at the current situation, we saw that the roaming revenue actually dropped to around 20%-30% of the pre-COVID years. With the current relaxation, I do think that the roaming will continue to increase, which will obviously contribute to the bottom line. Overall, I think the increase would not be very significant. It might go back to 30%-35% of the pre-COVID years. We just have to hope for further relaxation.
You know, taking away even the three days hotel quarantine, which will help.
The next question, what percentage of revenue do you expect the new digital revenues to represent in the medium-term?
The new digital revenues, I think for the time being, only represents a very small portion of the total revenue. In the medium- term, we are hoping that this will grow to at least 10%-15%. It will take time, but we want to have a sustainable growth and a sort of profit making growth. Might be slow, but getting there.
The next question, is there full year guidance for growth in AFF and distributions?
As I said in the beginning of my session, despite all the headwinds that we have in the first six months, we are still able to report and deliver a two point something percent growth in terms of AFF. We are hopeful that with the relaxation with the you know better retail sentiment, barring unforeseen circumstances, obviously the growth in terms of AFF would be higher than the 2% that we delivered in the first six months. Thank you.
That was the last question. Thank you for attending.
Thank you.
Okay.