Wharf Cable is to begin broadcasting commercials next week and plans to transmit half the amount of advertisements aired by the terrestrial channels. After broadcasting commercial-free since 1993, Wharf said the Legislative Council made the necessary amendments to the company's licence and its best estimate was that it could begin airing advertisements from Monday. The Government has given approval for Wharf Cable to broadcast 10 minutes of commercials per hour, the same as TVB and ATV. But the company initially plans to air only five minutes per hour on eight of its 15 channels. Samuel Tsang, enterprises director for Wharf Cable, said special considerations would be made for live sporting events where commercials would only air in natural breaks, such as half-time. For movies, commercials would only be broadcast a minute before the film, without further breaks. When asked if the company was airing five minutes of commercials because it could not attract enough advertisers, Mr Tsang said five minutes was the company's current policy. He said the company had attracted 20 international and local advertisers to date. 'We want to develop our own strategy. Our subscribers are young, higher educated and more affluent in household income, so we decided to cut half of our advertising allowance,' Mr Tsang said. 'This is sort of a win-win solution for advertisers and our audience. From an advertiser's point of view, they will receive a higher profile for their commercial messages and for the audience the programming will be more fluent and enhance viewing interest.' Garmen Chan, Wharf Cable's external affairs director, said the company had more than 330,000 subscribers and was gaining about 10,000 new homes per month. He said about 1.4 million of the territory's approximately 1.7 million homes were cable- ready and the entire fibre-optic network would be complete by the end of 2000. Wharf hopes to reach the break-even point by the end of the year and record its first operating surplus in 1998. It reported a loss of $580 million last year. 'We knew from the beginning when we received our licence that there would be a moratorium for advertising so it is not a matter of revenue loss,' Mr Chan said. 'As far as profits go we are expecting some returns by the turn of the century. For 1998 we don't expect to have to pump money into the project any more because we will have operating profit.' Mr Tsang dismissed a government study conducted by management consultants KPMG, which estimated Wharf Cable would receive no more than 6 per cent of local advertising revenue. 'From an operating point of view that is too optimistic. For the launching stage we are taking a conservative approach,' he said. 'Since we are starting in the middle of the year most [companies'] advertising budgets have been committed according to their own plan. 'For the coming six months we will try to consolidate and test our marketing mix to see whether the market agrees with our strategy.' Mr Tsang said subscription fees would continue to account for about 90 per cent of revenue and the advertisements less than 10 per cent, a scenario experienced by European cable operators.