Firm ready to suffer further in order to boost subscriber base
City Telecom (HK) is prepared to spend more on marketing to acquire the 369,000 customers it needs to boost its customer base to the one million mark - even if the effort keeps it in the red for two more years, according to chairman Ricky Wong Wai-kay.
Mr Wong yesterday said competition in the city's five-player fixed-line telephone sector would decline in the next two years and the company was therefore ready to face up to further losses that could be deepened by price cuts aimed at pricing their competitors out of the market eventually.
'If we were to see our net loss widen next year, this is only because our subscriber growth would have increased by the same magnitude,' said Mr Wong, who unveiled a loss of $206.35 million for the year to August, compared with a profit of $49.55 million in the previous year.
'It is the norm of the telecoms industry that one must suffer at the beginning of your investment and harvest only at the very end. We could have rough times for one or two more years,' he said.
The company warned investors as early as May, during its interim results announcement, that it would continue to register losses until at least the current financial first half to February next year.
Nevertheless, yesterday's net loss - its first full-year loss in 13 years - surprised analysts.
