Good evening and welcome to the HKT 2024 Annual Results Webcast. Presenting today will be Susanna Hui, Group Managing Director, and Mr. Patrick Poon, Chief Financial Officer. We'll start with a presentation followed by a Q&A session, and with that, let me turn it over to Susanna.
Thank you. Good evening, ladies and gentlemen. Thank you for joining our analyst briefing today. Despite the persisting subdued economic conditions in Hong Kong, I think at HKT we demonstrated stability and resilience, and services revenue increased by 2% to over HKD 4.1 billion. If you look at the slide, including the handset sales, total revenue increased by 1%. In particular, we would like to highlight that the key growth driver for 2024 were mainly the enterprise segment, which recorded an 8% growth.
Our broadband revenue also recorded a 3% growth, with mobile registering a 5% growth as well. EBITDA and AFF also increased by 3% during the year 2024, and this is made possible by further productivity improvements as we embrace AI automation to enhance operating efficiencies and customer service. On the back of this performance, the board has recommended a final DPS of HKD 0.4588, taking the total distribution to HKD 0.7808. This represents an increase of 3% and a yield of around 8% based on our latest share price.
Central to our market leadership is, of course, our unparalleled integrated network infrastructure, which is built on our three critical pillars. Number one is, of course, our top-tier fiber network in Hong Kong, bolstered by our extensive 5G mobile network, and more importantly, seamlessly connected internationally through our robust global subsea cable infrastructure operated by PCCW Global. Together, all of these elements ensure unmatched connectivity and reach.
The strategic advantage of such superior seamless network obviously is clearly reflected in the significant growth of our enterprise segment, as more and more of these organizations recognize the value of a robust future-proof network, which can deliver reliability, speed, and also global reach. Now, zooming into our fixed network, our fiber network, we are continually upgrading the technology. On the consumer offering side, we are offering fiber to the home services up to 50 gig on top of the normal one to two gig and 2.5 gig and so on. And this, when complemented with the latest Wi-Fi 7 routers, will be able to deliver the fastest home broadband experience in Hong Kong. And especially in 2024, we saw the take-up rate of 2.5 gig gathering quite strong momentum.
For the enterprise segment, we are offering up to 400G Carrier Ethernet services, and recently we also announced an 800G AI Superhighway service, basically to address the growing demands from enterprise and data centers in this era of AI and supercomputing, and in terms of the recently launched 800G direct fiber service, basically it is a Layer 2 connectivity service for on-demand remote access to AI and supercomputing resources.
This will be able to address the increasing demand from the universities, science and technology parks, and also high-tech companies, as well as data centers in Hong Kong, and basically, this will be able to enable rapid transfer of large data sets, which is crucial for processing complex algos, as well as real-time collaboration between different AI systems, and it facilitates the development of advanced AI models, so this is definitely a high-growth area going forward.
Now, if we turn to our network infrastructure, the mobile side, which is fully integrated with our own 10-gig fiber backhaul, we have been, in terms of the wireless network, we have been extending geographic coverage with the addition of 82 new cell sites, in particular at new locations such as the Kai Tak Sports Park and so on, which is important because we do know that there are a lot of mega events coming up at that area.
We have also been expanding our dual C-band coverage to improve customer experience in heavy traffic locations such as the airport and MTR stations. We are also progressively upgrading our network to 5G-A, 5G Advanced Technology, to deliver super high speeds and handle heavy traffic loads in areas such as the Golden Bowl, as well as areas where mega events are held.
During 2025, there are two spectrum auctions held, and we continue to strengthen our portfolio by adding 20 MHz in the 2300 MHz band, which is important in terms of strengthening our 5G capacity. We have also added in our portfolio 100 MHz in terms of the 6-7 GHz high band at affordable, reasonably affordable price to prepare for the future 6G. Now, if we turn to our mobile customer base, if you look at this slide, you can see that despite the intense competition, our mobile customer base continues to grow, now totaling 3.46 million, which represents a net additions of 31,000 during the year, and this is driven by a 5% increase in our core 1010 and CSL segments. We also see a low churn rate of 0.7%.
With the roaming recovery, as well as the continuous 5G upgrades, we saw our ARPU improve to HKD 193 HKD at that year-end. Talking about roaming revenue, this slide here shows the roaming revenue situation in 2024. You can see here that roaming revenue grew by 37%, following a 176% increase in the preceding year, 2023. Now it represents an overall 98% recovery as compared to the pre-pandemic levels. This was primarily driven by a surge in consumer outbound, which has now reached historical high at 134% of pre-COVID levels in December 2024. Obviously, if you look at the light blue section, you can see that the inbound roaming recovery versus 2019 is still at 70% level.
We expect that there will be room for further improvement in this year as we see uptake in terms of inbound tourists, as well as more and more business visitors coming into Hong Kong, especially with the lineup of mega events such as the new Kai Tak Sports Park, as well as the various business summits and conferences which are in the pipeline, and turning to the next slide is basically the 5G adoption trend.
The trend is still very encouraging and healthy. We continue to see 5G customers uptake. And in FY 2024, there was an increase by 25% to over 1.7 million subs, which represents 51% of our post-paid base, and if we take just our core 1010 and CSL segment, the 5G penetration is even higher at 57%, which helped to lift the overall ARPU. On average, 5G plans command an R pool premium of 40% over 4G, which represents more than $50 HKD. Now, turning to our fixed business, the home broadband business continued to show growth.
We saw a net add of 3,000 during the year to our customer base, which now stands at 1.47 million. More importantly, we continue to see upgrades of fiber to the home, especially with the launch of 2.5 gig and so on. We saw fiber to the home customers grew by 3% to 1.04 million. As I was saying, this was spurred by the uptake of 2.5 gig services, which grew by 218% during the year. Turning to our content, the Now TV pay TV business, basically we have unrivaled and most comprehensive content offering. In particular, the strongest pillar is our live sports content. A lot of them are exclusive as well.
On top of the football, such as the Premier League and Euro and so on, we also introduced during 2024 distinctive customized sports packages targeting specific sport communities. For instance, the Grand Slam for tennis, the NBA passes, the UFC fight sports, the Formula 1, and so on. And we have been seeing encouraging uptake in terms of the specific sport passes.
In terms of the non-sports content, conscious of the diverse variety of the content available in the market, our Now TV is no longer a one-size-fits-all proposition. So we partner with different providers and introduce new premium content packages, which can be sold as an add-on. So we have obviously the very popular Sports and Netflix combo. We have Western Signature Pack with Max service and our own curated Now True documentary and Now Studio drama.
We also have our Asian Signature Pack with our own group Viu Korean Chinese content, as well as local movies channel as well. All of these are now packaged into micro packages customized and targeting our customers using data analytics. And we are able, as I say, to cross-sell these as add-on and using our refresh Now OTT service to tap our fixed broadband customers at home, as well as tapping our mobile customer base.
So we saw a strong 15% growth in terms of our Now OTT sub during the year 2024. And for the B2B side of our Now TV, we are pleased to share with you that in terms of the Now TV penetration on the Hong Kong five-star and four-star hotel, it was 100% and 80% respectively. And we are expanding the service into the Macau hotels as well.
During the year, we signed a partnership agreement with Galaxy Macau to offer Now services across their seven hotels. And our target is basically to keep expanding our penetration to the hotels in Macau, riding on the revival of tourism in both Hong Kong and Macau. And while pay TV is by and large a subscription model, we also see stable growth in terms of our pay TV advertising revenue as we seek relevance in offering innovative solutions to advertisers which are targeted, interactive, using addressable TV, using AR lens and so on to reach our consumers through multiple platforms.
Turning to our enterprise segment, which is basically our star performer in the year 2024, and basically riding on our underlying network infrastructure and technology layers and different applications and solutions specifically targeted to different industry verticals, including government, public, healthcare, and utilities.
We have been able to report and share a very successful new business lineup of more than HKD 5 billion pipeline new projects secured as at 2024 year-end. And this represented a year-on-year increase of 11% as compared to 2023 year-end, which of course will form a very good foundation for the commercial revenue going forward. In particular, we have seen very strong growth in the healthcare sector. In 2024, revenue jumped by 43% to HKD 1 billion as post-pandemic hospitals, whether they are public and private, they have to rapidly refocus themselves in terms of upgrading service capabilities.
So we have been modernizing the network infrastructure, including 18 public and private hospitals since 2023. And more recently, we have been working with them to deploy the latest technology, AI and IoT-based solutions such as patient tracking and monitoring, asset tracking, and so on.
Since 2023, the contract value in this particular sector already totaled HKD 1.5 billion, and we will be able to see more to come in the coming years. It is not just the healthcare sector. In fact, across diverse industries, we see a lot of opportunities, and we have secured orders, whether in 2024 or in early this year, to help enterprises' digital transformation. For instance, convenience stores monitor the quality of the food in the convenience stores.
In terms of public utilities companies, network operations center, helping them monitor the system, as well as helping the property developers, construction companies in terms of confined space solutions to ensure worker safety as well. Education institutions, university campuses in terms of building the AI supercomputing platform and various other AV solutions as well.
So overall, not just the local commercial segment, in terms of our China business, we also had very good growth of 37% year-on-year growth and achieving HKD 1 billion in the year 2024. While in the past, I think mostly in terms of the China business, we are helping the Hong Kong and MNC companies expanding their presence in mainland market, especially the hospitality and retail and so on. But in 2024, we saw that the growth impetus actually came from mainland enterprises expanding regionally.
And this is, of course, supported by the central government's going global policy. And in fact, this is also out of necessity for the Chinese enterprises to navigate through the geopolitical and especially the new very challenging tariff environment by the U.S. government as well. So indeed, our 2024 China business revenue, as I said just now, hit HKD 1 billion.
Further growth is expected as we promote our extensive service portfolio customized to focus on EV manufacturers, IT manufacturers, cloud providers, and so on. In fact, we have already successfully developed and worked collaborative solutions for companies like Foxconn, Geely Cars, and so on. Beyond Hong Kong and mainland China, we also have a very mature and extensive global business, international business under PCCW Global.
This basically uniquely combines our software fabric and global network infrastructure. Revenue generated for the year was over $ 900 million . On the back of 63 diverse international subsea cable systems and a tier one optical and IP network, our Console Connect operates a software-defined platform which connects over 1,000 data centers and over 200 cloud on-ramps.
And this allows customers to order capacity on an on-demand basis, providing edge access, which is particularly important in this era of AI and global data center. And last year, for our global business, we had rewired the organization, had a bit of restructuring, trimmed down the cost base. We focused on optimizing resources on growth area.
And going forward, we will continue to expand our network, which is evident with our recent investment in trans-Pacific cable to enhance diversity and to address the exponential growth in terms of demand. And Console Connect will also continue to roll out new products like SIMEdge, which is an IoT solution. Now, next slide. Our loyalty platform, The Club, proves to be very effective in terms of engaging our customers and improving retention and cross-selling. And in fact, customers subscribing for two or more services with us increased by 9%.
And we continue to target to increase the percentage of our customer base subscribing to three services and, in fact, four services. And other than the basically very rich offerings on our platform, lifestyle events such as priority booking for concerts and so on also prove to be very popular. And in fact, half of the members of our club platform are non-HKT customers, non-HKT subscribers.
So this provides a very good source of new customers for HKT as well. So that's why I think the club digital ecosystem is a very crucial loyalty platform for us. And for popular destinations for Hong Kong people like Japan and Mainland, we have got discount coupons from Japanese outlets. We have also partnered with large Mainland Chinese groups in terms of the loyalty points in the shopping malls in Shenzhen. All of these have strong appeal to our customers.
Now, the next slide here is about AI. Now, we can safely say that 2024 is a blockbuster year for AI. So internally, we are embracing AI adoption to drive productivity improvement and enhance customer service. And externally, we are deploying AI applications for enterprises, as we said before, in terms of AI call center, AI intelligent operations, speech analytics, visual robots, and so on.
Internally, we also spearhead deployment with over 100 pilot use cases already implemented across the organization during the past 12 months, such as AI agent assist that helps our CS with rapid responses to customer inquiries. And we also use co-pilot software AI for in-house developers for faster and more accurate coding.
To further upskill our workforce on AI literacy, we have built our own AI studio so that all teams can self-develop their own AI bots to solve their pain points, all within obviously a centrally managed AI governance framework. This is a slide just to show that beyond business performance on the macro level, we are shaping a tech forward community with 5G, Wi-Fi 7, AI power solutions, and so on.
And in fact, for supporting Hong Kong as a super connector, we continue to support our enterprise with our solutions and global infrastructure, help them grow and expand locally and internationally. And by integrating the entire ecosystems, we are driving economic, digital, and technological growth, contributing to Hong Kong's development as a global innovation hub.
On the ESG front, we continue to earn recognition for our commitment to sustainability, ranking among top performing companies and maintaining one of the highest industry ratings for ESG leadership. We continue to contribute towards the wider community for corporate volunteering and sustainability financing efforts drive positive impact as well.
The last slide for me is basically some highlights on our achievements in 2024, and basically, we successfully delivered ourselves and fortified our financial position, which, with the closing of our fiber deal, this not only reduces our interest burden, it's also accretive to our AFF, it's also positioned us to the advantage of emerging opportunities in this prolonged period of elevated interest rates.
And also, we will continue to invest in our leading network and embrace AI, and obviously supporting Hong Kong government as well in terms of building Hong Kong as the R&D center and positioning Hong Kong at the cutting edge of innovation and technology, and also working together with the government to deliver high-quality mega events as well. And with that, I will pass to our CFO, Patrick, for the financial section.
Thank you, Susanna. Let me first walk you through the key financial lines for the year 2024. Our AFF continued to deliver solid growth of 3% year-on-year to $766 million. Total service revenue, excluding handset sales, was up by 2% to HKD 4.1 billion.
This was driven by the continued growth in mobile service revenue, lifted by higher contribution from roaming revenue, further 5G upgrade momentum, and net postpaid customer addition, and sustained demand for our high-speed broadband and local data services for the enterprise segment, as well as the continuously robust growth in enterprises revenue expanding beyond Hong Kong into mainland China, and including handset sales, total HKT revenue was up by 1% to HKD 4.46 billion, softened by the lower mobile product sales, which dropped by 8% to HKD 349 million.
Our total EBITDA for the year expanded by 3% to HKD 1.76 billion. Overall EBITDA margin was improved to 40%, and our NPAT grew by another 2% to HKD 650 million. Looking into details of our TSS segments, local TSS service revenue grew 3% year-on-year, underpinned by the continued growth in local data and broadband revenue.
As you can see from the chart at the bottom right-hand side, local data revenue surged by 8%, reflecting the continued demand for our enterprise unique digital transformation solutions utilizing the latest technologies of 5G, IoT, AI, cloud, and cybersecurity applications, etc., customized for the specific needs of various key industry verticals. Our broadband service revenue reported an accelerated 3% year-on-year growth, driven by increasing demand for our high-speed and reliable fiber-to-the-home services, especially our 2.5 gig services, noting the fastest growth of 218% during the year.
Pay TV business, being the leading content aggregator in Hong Kong, Now TV revenue remained resilient, with total install base steady at HKD 1.43 million, of which Now OTT subscribers grew 15% year-on-year, benefiting from its diverse and comprehensive content portfolio, as well as the introduction of targeted content packages catering to diverse viewer interests.
Therefore, overall local TSS revenue registered a solid revenue growth of 3%. Our international business recorded lower revenue from the wholesale voice business, but which margin is fine and did not impact much our bottom line. The drop was also mitigated by higher data revenue and growing demand of our Console Connect service to order capacity on demand, which are all supported by our robust global subsea cable infrastructure. Overall, total TSS revenue increased by 1% to HKD 3.14 billion.
TSS EBITDA grew 2% to HKD 1.22 billion, outpacing revenue increase fueled by further operating efficiency achieved, leading to an improved margin of 39%. Now, let's talk about our mobile business. Total revenue grew 2% to HKD 1.47 billion. Mobile service revenue rose 5% to HKD 1.12 billion for the year of 2024, underpinned by a higher contribution from roaming revenue, leading to our total revenue growing by 37% year-on-year.
Secondly, further expansion of our postpaid customer base to 3.46 million, with a net gain of 31,000 for the year, of which 5G upgrade momentum continued, with 5G customer base growing by 25%, reaching 1.7 million, representing 51% of total postpaid customer base. Last but not least, we record strong demand on our corporate mobile solutions in both public and private sectors, including customized 5G infrastructure and IoT applications.
Postpaid exit ARPU also grew 1% to HKD 193. Handset sales was softened to HKD 349 million, as consumers delayed handset upgrades due to weak consumer sentiment and limited new handset features. Total mobile EBITDA grew 5% year-on-year to HKD 681 million, of which service EBITDA also rose 5% to HKD 680 million, with mobile service EBITDA margin steady at 61%. Let's move to our operating expenses, OpEx.
We achieved an overall 5% OpEx savings year-on-year, down from HKD 446 million to HKD 423 million, with OpEx to revenue ratio further improving from 10.1% to below 9.5%, reflecting our continuous focus on operating efficiency and cost optimization initiatives across each business segment through business process enhancement, embracing AI, consolidation of business operation, and also rationalization of our IT platforms. Apart from OpEx, we are also exercising cost control over CapEx. Our total CapEx for the year was lower to HKD 284 million, representing a 3% year-on-year saving.
CapEx to revenue ratio further improved from 6.6% to 6.4%. Mobile CapEx registered a 5% saving to HKD 88 million, reflecting the efficiency gain from the capacity and network upgrades following the completion of our territorial 5G coverage. Most CapEx is now being invested in 5G advanced technology to continue raising our network performance and elevating our customer experience.
TSS CapEx also reported a 4% saving to HKD 172 million, reflecting our already extensive geographic fiber coverage and faced with timing of subsea cable investments. The next is AFF. We have already covered EBITDA and CapEx just now. CAC and License fees dropped by 2% to HKD 218 million, mainly representing lower customer acquisition costs as a result of improved sales channel efficiency. Fulfillment costs were flat, and payment for right-of-use assets also decreased.
As such, our operating AFF before tax net finance costs grew 7% year-on-year to HKD 1 billion. Payment for finance costs increased to HKD 234 million, caused by general increase in HIBOR. Lower tax payments, together with positive change in working capital, were record for the period.
Overall, AFF for the year of 2024 grew 3% year-on-year to HKD 766 million, despite the net finance cost hike, translating into a final distribution of HKD 0.4588 per SSU. Together with the interim distribution of HKD 32.92, total distribution per SSU for the whole year would be HKD 0.788. For the P&L, we have covered from revenue to EBITDA now.
Total depreciation and amortization was lower by 3% to HKD 706 million, primarily driven by our continuous CapEx savings. P&L finance cost was 5% higher to HKD 287 million, caused by higher market interest rate. Income tax expense went up to HKD 117 million from HKD 63 million last year, as previous year we recognized a one-off tax credit, which the tax provision this year came to in normal mode with an effective tax rate of 15.2%, closer to the standard corporation tax rate.
As such, our net profit for the year was up by 2% to HKD 650 million. Turning to our gearing position, upon the successful leveraging of selling 40% interest in the passive network business with $ 870 million with proceeds received in December last year, both the gross debt and net debt dropped significantly at the end of December to HKD 5.3 billion and HKD 5.1 billion, respectively, with gross debt and net debt to EBITDA ratio improving to 3 times and 2.9 times, respectively.
As of today, we have over HKD 2.66 billion total liquidity, including undrawn banking facilities of around HKD 2.4 billion and HKD 275 million cash on hand. We continue to carry an investment grade rating at BBB or BAA2. Lastly, our debt maturity profile. Our current proportion of fixed to floating rate debt is approximately 65% to 35%.
More debts are on fixed interest rate to counteract the adverse impact from the interest rate hike. Our effective interest rate was approximately 4.2%. As shown on the pro forma debt profile here, we shall use the undrawn banking facilities to repay the HKD 500 million bond when due in April 2025. After the repayment, the average bond maturity will be about 4.2 years. No imminent need for refinancing this coming year. This ends my presentation. Thank you.
Thanks. Let's open up to questions now. Okay, the first question actually has two parts. I'll read out the first part. What is our outlook on the local competition, as it seems like both our mobile and broadband ARPU had some uplift? Do we expect a similar trend to continue?
Okay, let me maybe answer the first part of the question first. Local competition, obviously, competition has been always intense in the Hong Kong market. We have a few of the players in both the fixed side and the mobile side. We saw some improvement in terms of RPU uplift is because basically in the mobile RPU is driven by roaming recovery.
And just now we talked about a 37% increase in mobile revenue, in the roaming revenue. And I think going forward, the broadband revenue also saw some room for further uplift due to the upgrade to the 2.5 gig and maybe later on to more. So fundamentally, we think competition, you can't eliminate competition at the end of the day. But for us, we see some sort of room for further improvement in terms of the RPU for both fixed and mobile.
The second part of the question is, do we see AI initiatives bringing some meaningful impact to our revenue and EBITDA in 2025?
The answer is yes to both. I think top line we have already said that we see more and more trend of enterprises deploying AI applications. So we do see that there will be top line contribution in terms of the enterprise segment, for instance, implementing AI call center for them and also other AI applications in terms of the supercomputing platform and so on. So we already see the trend, and I do think that there will be further contribution to our top line. I think the second part is on the EBITDA, right?
In terms of the EBITDA, definitely, as I was saying, internally we already set up our own AI studio so that every business unit and in fact corporate functions as well to try and use AI for improving productivity. And hopefully this trend will continue, and therefore more productivity and efficiency will be gained, which would help improve the margin as well. So it would definitely have a positive impact on EBITDA.
Okay, next question is, what impact do you anticipate industry consolidation, such as the potential acquisition of HKBN by China Mobile, will have on HKT?
This question was also raised by the journalist during the press conference earlier on, but I think I'm not in a position to comment on a live transaction carried out by other listed companies. So I would refrain from commenting on that.
But in terms of industry consolidation, a lot of analysts have been asking me over the so many years. I think it's very difficult to have consolidation in Hong Kong. But if there is a consolidation, I think it's positive because it will lead to more rationalization of the market. At the end of the day, a lot of resources are limited. For instance, spectrum are limited.
So recently in the spectrum auction, we saw all of us raising our hands, raising the price for the various spectrum in order to defend our position, which is a must, of course. But if there is consolidation, it's always welcome and positive. But for us, I think the only thing is that we will continue to invest in our network. We continue to invest in R&D. We continue to push different offerings.
And also riding on this new era of AI and so on, we will be doing our best to basically maintain our leading position.
The next question is, are there any plans to further deleverage HKT's capital structure, or are you comfortable with the current position?
Deleveraging at this prolonged period of elevated interest is always right. Can't be wrong. So I think while we have been successful in terms of deleveraging already in 2024, we delivered quite significantly using the $ 870 million proceeds, but we are always open to look at further opportunities in this kind of environment. Thank you.
Okay, that was the final question. Thanks everybody for attending today's webcast.