Hong Kong's i-Cable crashed to a net loss of HK$111 million for 2008, compared with a profit of HK$183 million in 2007. The company characterised the Hong Kong pay-TV and telecoms markets as “a war of attrition”.

Revenues fell, both overall and in its pay-TV division, down 10% to HK$2,080 million overall and down 15% for pay-TV to HK$1,355 million. Pay-TV subs actually rose 4% to 917,000 from the previous year-end figure of 882,000.

Operating profit fell from HK$545 million in 2007 to HK$277 million, with network and other operating expenses up from HK$419 million to HK$487 million. Selling, general and admin expenses also rose markedly, up from HK$390 million to HK$423 million.

Operating profit from i-Cable’s pay-TV division was down from HK$179 million to just HK$6 million.

In a results statement, the company said: “Within the Pay TV market, competition remained intense. Our main competitor [PCCW’s Now TV] has been following our lead to launch local channels that focus on news and entertainment in order to chip away at our leadership in these areas. The Group will continue to invest to solidify our edge.

“With the markets becoming saturated, it is a war of attrition for both broadcasting and telecommunications services with the players trying to poach subscribers from one another via aggressive pricing, enhanced content and service quality. But the Group's strong balance sheet and low cost base will put us in a good position to stay competitive in a harsh environment.”

The operating environment for the year ahead would remain bleak under the “prevailing macro-economic climate” but i-Cable claims it has now braced itself for “subsequent waves by better equipping ourselves. The Group has acquired premier and attractive contents; is building up a new defence system against piracy; and gearing up for delivering new services such as High Definition TV.”

These initiatives will not take effect until the second half of the year but the company is hoping to be “back on a recovery track” when the economy turns around.

However, a new report from Paul Budde Communication casts doubt on the company’s resilience. The report, which examines Hong Kong’s mobile, telecoms and broadband sectors, states that having lost its leadership position to Now TV, i-Cable could be in for worse times.

“In a densely packed market with over 2 million TV households, PCCW ended 2008 with nearly 930,000 video subscribers in Hong Kong with a paying base of 670,000…Besides losing its historic market share edge, i-Cable may start shedding subscribers during 2009,” says the report.

© Rapid TV News 2009