HKBN nears 200,000 IPTV users, loses profits on start-up costs

City Telecom (including Hong Kong Broadband Network [HKBN]) has reported that its EBITDA for the first six months of its fiscal year fell by 7% to HKD281 million (USD37 million) and net profit dropped by 20% to HKD135 million, despite revenues climbing by 11% year-on-year to HKD918 million in the period September 2011-February 2012. The fall in profitability was attributed to multimedia business start-up costs, as the company prepares to spin off its VoIP-based voice telephony, fibre broadband internet and international direct dial (IDD) operations, to concentrate on its IPTV/multimedia operations, under a deal agreed with private equity firm CVC Capital Partners earlier this month. In the first half of fiscal year 2011/12, the fixed network services offered by HKBN – VoIP, broadband and IPTV – grew in revenue terms by 14% year-on-year, and accounted for 90%, or HKD828 million, of total revenues, while the turnover of City Telecom’s international telephony business dropped by 6% to HKD90 million. Broadband customers – nearly all direct fibre-based – increased by 27,000 in six months to reach 617,000 at the end of February 2012, while VoIP-based local telephony subscribers grew by 19,000 to 495,000 in the same period, and the IPTV customer base reached 195,000, up by 14,000 since September.