HKT to launch 4K ultra-high-definition service on broadband network

Net profit up 32 per cent to HK$3.95 billion

PUBLISHED : Thursday, 25 February, 2016, 9:07pm
UPDATED : Thursday, 25 February, 2016, 9:07pm

HKT Trust and operating arm HKT, which runs Hong Kong’s most extensive telecommunications infrastructure, is gearing up to launch a city-wide, 4K ultra-high-definition service on its broadband network this quarter after posting solid financial results last year that beat analysts’ estimates.

“HKT’s broadband strength will continue to be our advantage in tapping the market for new demand and upgrade to fibre services,” HKT group managing director Alex Arena said on Thursday.

“The suite of offerings will be complemented this year with a new integrated 4K all-in-one appliance.”

Arena first unveiled plans for an extensive 4K ultra-high-definition service in September with NowTV, the pay-television business of Hong Kong mogul Richard Li Tzar-kai’s PCCW group.

The service, which will offer each HKT Netvigator and NowTV subscriber a single desktop appliance for streaming video and other online applications, has been in pilot testing mode with selected customers since October. The commercial roll-out is likely to start next month.

Netvigator and NowTV have jointly developed a 4K all-in-one appliance using a new set-top box from Samsung Electronics as the hardware platform.

HKT’s broadband strength will continue to be our advantage in tapping the market
Alex Arena, HKT

Arena said the appliance would support so-called over-the-top (OTT) video services, internet protocol TV and digital terrestrial TV “at true 4K ultra-high-definition quality”.

“It is designed and built to accommodate new features in future,” he said.

The term 4K ultra-high-definition refers to the most advanced visual resolution technology at present, displaying more pixels than regular high-definition TV sets, with more lifelike colours and sharper focus.

HKT says a 4K ultra high-definition TV provides resolution of up to 4,000 pixels horizontally and 2,160 pixels vertically. Regular HDTV sets in the market offer display resolution of up to 1,920 by 1,080 pixels.

Arena said 52 per cent of Netvigator’s internet traffic consists of online video streaming content.

A Deutsche Bank study has forecast video streaming will make up 80 per cent of all internet traffic worldwide by 2019, which would augur well for HKT’s fixed-line and wireless network expansion.

In a filing to the Hong Kong stock exchange, HKT reported a 32 per cent increase in net profit last year to HK$3.95 billion, up from HK$2.99 billion in 2014, on the back of its strong mobile operations.

Its earnings last year included the full 12-month contribution from the former CSL New World Mobility, which HKT acquired in 2014 for US$2.43 billion.

Total revenue grew 20 per cent to HK$34.73 billion from HK$28.82 billion in 2014.

Adjusted funds flow, which is the measure on which the cash distribution of HKT’s share-stapled unit holders is based, rose 22 per cent year on year to HK$4.09 billion.

HKT beat projections by analysts at Barclays of HK$3.79 billion in net profit and HK$32.30 billion in revenue for last year.

“We think HKT represents a sound mix of growth and yield,” a Barclays report said. “Strong revenue growth driven by CSL consolidation and continuous fibre-to-the-home adoption with a higher margin trend is also driving sustainable cash flow growth for higher dividends.”

HKT’s total mobile subscribers last year reached 4.55 million. It had 568,000 optical fibre-to-the-home subscribers among its 1.57 million broadband subscribers.