City Passes 1 mil. Subs

Hong Kong Broadband Network Ltd (HKBN), a wholly owned subsidiary of City Telecom (HK) Limited (HKSE: 1137, NASDAQ: CTEL), announced that subscribers to its fixed telecom network services reached 1.04 mil. as of end-Dec. 2009, comprising 443,000 broadband users; 403,000 voice subs; and 158,000 IPTV customers (primarily STB installs as opposed to pay subs).

Over the last four months of 2009, the company added more than 50,000 net new broadband users, boosted by its aggressive marketing program since Nov. 1, which promotes its symmetric 100Mbps broadband services at US$13/month (HK$99/month). Since starting the campaign, the company has added 38,000 net new broadband users. This growth rate of net 19,000/month is 3x higher than the company's net 6,250/month achieved during FYE August 2009.

HKBN's share of the Hong Kong broadband market will likely reach 25% later this year, according to MPA. The company's broadband user base will likely pass 500,000 by end-August 2009.

HKBN’s CEO, William Yeung said, “For the four months to 31 Dec. 2009, we added net 52,000 broadband subscriptions, which compares with our full financial year 2010 target of adding net 110,000 (FYE August 2010). As such, we are confident on delivering our FY 2010 guidance of reaching 500,000 broadband subscriptions, maintaining core EBITDA of HK$478 mil., keeping capEx below core EBITDA and mild revenue growth.”

He added: “There is growing evidence of the market embracement of our ultra-high bandwidth fiber network and superior customer service. For the four months to 31 Dec. 2009, our net additions of 13,000/month far exceeds normal industry growth of 5,100/month, which means that existing customers from other broadband providers are switching over to us en masse.”