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Georgina Lee

Hong Kong Broadband Network (HKBN) said it was raising tariffs again as increased user revenue meant it would not have to sacrifice margins by aggressively competing on price with rivals.

Ricky Wong Wai-kay,  chairman of the fixed-line unit of loss-making City Telecom (HK) (CTI), said yesterday he hoped that strong growth of its broadband business would help cushion losses from its pay-television business, which for the past year has helped drag CTI into a loss.

He said HKBN grossed 20 per cent more broadband revenue for the six months  to last month, and he expected  customers to spend at least 40 per cent more on their monthly bills this year than a year ago.

Average revenue per broadband user jumped to $100 from $80 during the period, Mr Wong said.

The tariff for the 100 megabits per second (Mbps), contract-free broadband service will be lifted to $238, after last year's rise to $188.

'With the increase in our broadband subscribers and the business' average revenue per user [arpu],  we feel that we no longer need to compete with rivals on price,' Mr Wong said.

HKBN is known in the industry as an aggressive telecommunications service provider.

Even Mr Wong has described his company as a 'cheap telecoms' - matching offers from competitors  and sacrificing margins readily to lock in customers with a fixed-line voice service for less than $30 a month.  It is the only internet service provider that can offer speeds of up to 100 Mbps and 1,000 Mbps.

Yesterday,  the company also announced  it would upgrade its slowest speed offering, at 10 Mbps, to 20 Mbps, effective next month.

The 20 Mbps will be about $20 more expensive than its 10 Mbps.

'With our 20 Mbps and 100 Mbps internet offerings, we hope we could use our broadband business to drive the development of our company going forward,'  Mr Wong said, adding that more than 90 per cent of its  200,000-plus broadband customers were using  the 100 Mbps service.

Rival PCCW has recently upgraded the speed of its Netvigator broadband service to 18 Mbps for some of its customers.

Hutchison Global Communications  offers speeds of up to 25 Mbps.

Mr Wong said with bandwidth-soaking applications such as music and movie downloads, and sharing of photos and files across the internet soaring, he remained hopeful that higher-speed offerings would win new business.

He said he expected its pay-television business, with about 110,000 customers, would remain at a loss for  the year to August.

Last year CTI made its maiden net loss - at $206.35 million - in 13 years of business.

Mr Wong  had said CTI was prepared to spend more on boosting its customers to one million, from 631,000 in August last year, even if it meant  the firm would be unprofitable until next year.



HKBN lifts charges as Net users spend more