PCCW charts plans to expand media, IT services footprint

Company to enter Thailand’s over-the-top market with its Viu services this year

PUBLISHED : Monday, 16 January, 2017, 9:12pm
UPDATED : Monday, 13 February, 2017, 5:34pm

PCCW, the flagship company of tycoon Richard Li Tzar-kai, is looking to expand its regional presence in the media and information-technology service businesses after reporting a 1 per cent increase in its core profit for last year.

The company posted a net profit of HK$2.39 billion for its core operations, up from HK$2.37 billion in the same period last year. 

Core revenue dropped 2 per cent to HK$38.2 billion from HK$39.1 billion the previous year, largely due to a slowdown in its mobile handset sales. PCCW’s chief financial officer Susanna Hui attributed the dip in handset revenues to the lack of flagship handsets released last year .

The company’s core operations excludes its property development and investment business, Pacific Century Premium Developments.

The consolidated revenue for PCCW dipped 2 per cent to HK$38.4 billion, while its core operating earnings before interest, taxes, depreciation and amortisation – a measure of a firm’s operating profitability – rose 3 per cent to HK$12.5 billion after the integration of mobile operator CSL at PCCW’s telecommunications arm HKT and further investments in its media business.

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“We have continued to stay focused on our core business ... in the last two years we have expanded our footprint with our regional expansion strategy, particularly on Viu OTT (over-the-top),” said Bangalore Gangaiah Srinivas, the managing director at PCCW Group, during a results presentation on Monday.

OTT refers to audio, video, and other media transmitted via the Internet without an operator of multiple cable or direct-broadcast satellite television systems controlling or distributing the content.

PCCW plans to enter the Thailand OTT market with its Viu OTT service in the first quarter of this year. The company’s OTT services are already available in Hong Kong, Singapore, Indonesia and Malaysia, he said.

“[PCCW’s OTT service] is definitely in a growth phase, there is decent growth across region. For this business to break even, it will take four to five years,” said Srinivas. “We have seen revenue pick up in Hong Kong and Singapore on the [Viu OTT] platform, and good traction in India on the customer base.”

“We clearly see the benefits of scale to be a regional player ... we have already emerged as a leader of sorts,” he added.

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PCCW’s IT services business, PCCW Solutions, is also expanding outside of Hong Kong and China to drive growth. The company commenced operations in Taiwan and Singapore, and established a new delivery centre in the Philippines in June 2016.

Prior to its earnings announcement on Monday, PCCW shares rose by 4.33 per cent to close at HK$4.58. The company also announced a dividend of 20.17 HK cents per ordinary share.

Pacific Century Premium Developments, PCCW’s property development and investment business, reported on Monday a 5 per cent increase in consolidated revenue to HK$174 million for the year ended December 2016, compared to HK$165 million in 2015. Consolidated net loss amounted to HK$364 million, as the company focused on completing projects in Japan by late 2019 and its Indonesia office building development by this year.

PCCW’s telecommunications arm HKT on Friday reported a 24 per cent increase in net profit to HK$4.93 billion for 2016, as HKT group managing director Alex Arena called for the government to release more spectrum in preparation for 5G services.