Analysts forecast second good showing for i-Cable
Pay-television operator i-Cable Communications is expected to report its second full year of profitability on Thursday, according to a JCF Group poll of 20 sector analysts.
On average, analysts expect the company to report a profit of HK$176 million.
That compared with a net profit of HK$20 million recorded in 2000, when the company broke even after seven years of operation.
The operator is expected to report a higher churn rate - the proportion of subscribers who cancel its service - due to rampant piracy, which gives viewers illegal access to i-Cable's services.
The company is also expected to report flat average revenue per user (arpu) as a result of limited upside in fare adjustment.
ING Barings expected i-Cable's arpu to stabilise in the fourth quarter of last year and reach HK$239 per month for the full year.
Previously, the Government's move in late 2000 to liberalise the local pay-television industry had generated concerns over the impact of keen competition on i-Cable.
However, new entrants failed to roll out their commercial operations on the planned scale. Britain's Yes TV last month began its symbolic commercial trial with a package of six channels and video-on-demand services, while Taiwan-based Pacific Digital Media launched two channels for a monthly fee of just HK$2.
Analysts said these small players would not pose any challenge to i-Cable, which had 560,000 subscribers at the end of last year.
The possible delay, or even withdrawal, of Television Broadcasts' pay-television project further means i-Cable's market domination position will not be threatened.
Analysts expected the operator to reach out to 600,000 homes this year on the back of the football World Cup.
Meanwhile, i-Cable's broadband services are running better than expected with a higher take-up rate.
SG Securities expected the operator's Internet unit to generate HK$333 million, or 17.59 per cent of its total revenues, last year.
It said the company would have 170,000 broadband users on an arpu package of HK$220 during the period.