Sunday Communications bet everything on 3G — a year later it was sold for parts

Sunday Communications was founded in 1997 as one of five mobile network operators in Hong Kong, a fiercely competitive market with near-universal penetration. The company provided 2G GSM services, fixed-line, and IDD, and was listed on the Hong Kong Stock Exchange in 2000 as well as on Nasdaq via ADRs. It was majority-owned by Distacom Communications.

In 2001, Hong Kong's telecommunications regulator auctioned five 3G licenses. Sunday committed to a massive investment for the 3G spectrum, betting that the new high-speed network would give it an edge over larger rivals PCCW, Hutchison, CSL, and SmarTone. For a small operator in a market with only seven million people and five competitors, the 3G license was a bet-the-company gamble.

Sunday announced the commercial launch of its 3G network in June 2005. By that time, the company was already in severe financial distress. It reported a net loss of HK$156 million on revenue of HK$1,159 million, with total equity of just HK$513 million against total assets of HK$2,685 million — meaning the company was leveraged more than 5:1. The 3G investment had consumed cash that the company did not have.

In the same month that Sunday launched 3G, PCCW announced the acquisition of a 79.35% majority stake from Distacom Communications and other shareholders. The acquisition valued Sunday at approximately HK$2 billion. Sunday's operating business, Mandarin Communications, was sold to PCCW as an intra-group transaction for HK$1.9435 billion. The company was delisted in 2006 and formally dissolved in 2007. Sunday's stores and customer base were absorbed into PCCW Mobile, later merged into CSL.