Hong Kong’s largest operator HKT reported a healthy increase it its net profit for 2016 despite a fall in overall revenue due to a sharp decrease in handset sales.

The operator, which has a 36 per cent market share, reported a 24 per cent year-on-year jump in its net profit through 2016 to HKD4.93 billion ($636 million). EBITDA increased 5 per cent to HKD12.7 billion, which HKT attributed to the “continued release of cost synergies from the completion of the integration of CSL as well as the steady performance of the telecoms services business”.

Total revenue for the year ending 31 December decreased 3 per cent to HKD33.8 billion. While mobile service revenue increased 5 per to HKD9.64, handset sales dropped 33 per cent to HKD3.43 billion, leading to a 9 per cent drop in overall mobile revenue to HKD13.1 billion. The company said device revenue was “impacted due to the absence of marquee handsets throughout 2016”.

Excluding handset sales, underlying revenue for the year increased by 3 per cent.

With the continued shift in IDD and roaming traffic to over-the-top voice and messaging applications, the contribution of those services to overall mobile revenue declined to 14 per cent in 2016 from 17 per cent a year earlier.

The operator’s mobile user base was down 1 per cent year-on-year in 2016 to 4.5 million, with its prepaid base falling 3 per cent to 1.38 million. Postpaid subscribers represent 69 per cent of its total subs. Postpaid ARPU rose slightly from HKD230 to HKD233.

Capex dropped 5.8 per cent to HKD2.88 billion last year, a drop aided by the completion of the CSL integration in Q3.

The operator said the outlook for the coming year is clouded by a number of factors. “Hong Kong’s macroeconomic environment will remain subdued in view of the local and global uncertainties. Industry competition will remain intense and primarily price focused, while the regulatory environment may also not be accommodative,” it said in a statement.