iTV chief expects to break even in 2 years

Hongkong Telecom's Interactive TV service (iTV) has 70,000 subscribers and another 30,000 people signed up and waiting to be connected, its new head says.

Allen Ma, chief executive of Hongkong Telecom's Interactive Multimedia Services division, also said the iTV service, which delivers movies and other multimedia content via telephone wire to subscribers' televisions, was bringing in about $14 million per month, mostly from subscription fees.

Mr Ma, former head of Hongkong Telecom's mobile-phone division, predicted that iTV would begin to break even operationally within two to three years.

The company says it has invested $1.3 billion in iTV to date, and plans to invest another $10 billion over the next decade. However, a report in the Hong Kong Economic Journal claimed Hongkong Telecom had decided temporarily to halt large-scale investment in iTV due to slow subscriber uptake.

Mr Ma conceded that the roll-out of fibre-optic cable and switching equipment necessary to hook up subscribers, controlled by another division called Hongkong Telephone, would be slowed down.

'The problem is not the economy, but whether we can introduce new content services,' he said.

Hongkong Telecom announced a partnership yesterday with Reuters and ATV to provide news stories via digital video to iTV subscribers at no charge.

Viewers could click and watch their choices immediately in video of quality better than laser disc, officials said.

Though users can download the videos on demand, the stories on offer will only be updated by Reuters and ATV up to four times daily.