CTI profit dives on slump in IDD calls
City Telecom (HK) (CTI) saw its first-half net profit fall more than 60 per cent as its core international call business slid, but it says appliance giveaways could help it overtake Hutchison Global Communications to become Hong Kong's No2 fixed-line operator.
CTI launched an aggressive marketing campaign on Monday, offering free household appliances such as air-conditioners and refrigerators to new customers who committed to its fixed telecommunications network services for 24 to 36 months.
The firm yesterday said it had signed up about 1,500 new users in the first two days of the campaign and received 45,000 enquiries in three days.
Chairman Ricky Wong Wai-kay admitted it was a belated response to dominant player PCCW, which in July last year offered customers free short-messaging phones if they signed up for a year.
'I tell myself the date of July 18, 2003, before I sleep every night,' Mr Wong said. 'It was the biggest mistake in my life to have underestimated PCCW's promotions and not react. I was wrong once but I won't be wrong again.'
CTI said the heavy marketing cost would be offset by longer subscription plans and more stable average revenue per user.
The main board-listed firm yesterday said first-half net profit plunged 68.12 per cent to $35.12 million while revenue fell 12.92 per cent to $572.4 million.
It said increasing competition had sent its IDD sales down 30.73 per cent to $324.57 million, representing 56.7 per cent of turnover.
