i-Cable Anticipates 2010 Rebound

Wharf Group subsidiary i-Cable Communications (1097.HK) said pay-TV revenue bottomed out in mid-2009 and that a recovery was already underway.

Consolidated revenues for FY2009 slipped to HK$1.76 bil./US$226 mil., down 16% Y/Y. Overall EBITDA declined 23% Y/Y to HK$214 mil. last year. Cost cutting helped reduce consolidated net loss to HK$40 mil. versus HK$111 mil. in 2008.

Its pay-TV platform, Cable TV, installed 83,000 STBs in 2009, bringing its total customer base to 1 mil., but pay-TV EBITDA plunged 51% Y/Y to HK$117 mil. in 2009. It reported a net loss of HK$45 mil. compared to a net profit of HK$6 mil. in 2008.

Fundamentals are however expected to improve this year as it attracts higher yield subscribers by pushing HDTV and other services, tied to the broadcasts of World Cup and English Premier League (EPL) football, starting in June and August respectively. But management did not specify whether it hopes to report a net profit again this year or in 2011.

I-Cable has also applied for a FTA TV license, with which it can offer a free channel to grow ad sales while driving subscriptions to its pay service.

Broadband subscriptions meanwhile, declined to 249,000 customers at end-2009 due to price competition, down 18,000 during the year. EBITDA at its Internet & Multimedia segment dipped 7% Y/Y to HK$249 mil. The roll-out of DOCSIS 3.0 services later this year is expected to help improve competitiveness.

For MPA's analysis on the Hong Kong pay-TV industry, see Issue 108 of Media Route 26, available on March 19.