City Telecom targets high-end users in bid to lift revenue
City Telecom intends to become the most expensive Hong Kong broadband service provider by the end of next year, according to a senior executive.
The medium-sized operator hopes to boost revenue by focusing on high-end users and phasing out price-sensitive mass subscription.
The company, which raised the tariff for subsidiary Hong Kong Broadband's standard service this year by about 30 per cent to HK$168 per month, would increase the fee by as much as 50 per cent next year, chief operating officer William Yeung Chu-kwong said.
'It depends on the market sentiment and moves by competitors,' Mr Yeung said. 'It's meaningless to get involved in a price war. It will just hurt overall business margins.'
Hong Kong Broadband's plan for its standard 10 megabit per second downloading and uploading connection is about HK$100 less than PCCW's eight Mbs service.
The company, which also offers 25 Mbps and 100 Mbps high-speed connection for high-end users, had 220,000 broadband customers at the end of August, or 12.9 per cent of the total subscribers in Hong Kong. Market leader PCCW had 608,000 at the end of June.
Owing to the deteriorating operating environment of the long-distance business, City Telecom has allocated more resources to fixed-line services in recent years.
City Telecom reported that its net loss for the year ended August narrowed to HK$92.24 million as its operating margin improved and service tariffs rose. The company made a net loss of HK$213.32 million in the previous year.
The company's shares are up 17.5 per cent for the past month, closing at 75 HK cents yesterday.
