City Telecoms Hong Kong Broadband Network service had 120 thousand IPTV subscribers at the end of February 2007, up from 116 thousand at the end of August 2006. As a whole, its broadband business was flat as well, growing to 227 thousand subscribers at the end of February 2007, compared to 220 thousand subscribers at the end of August 2006.
City Telecom is positioning itself as a premium service provider with broadband services in the 20 to 100 Mbps range using its fiber based access network. It is phasing out its 10 Mbps offering. At 25 Mbps it has a significant performance margin over its DSL competitors such as PCCW. Its 25 Mbps service is priced at $27 US per month and its 100 Mbps service is priced at $38 per month.
City Telecom is struggling to get ahead in the Hong Kong market. PCCW has the momentum today. City Telecom's financial position is improving with higher ARPUs generated from stronger uptake of its higher speed services. This has resulted in the company returning to profitability.
It introduced its IPTV service with a first year free offer and quickly generated 100 thousand subscribers. I believe that that this strategy caused a high level of churn with the service as people had to start paying for it. I think it has done well to maintain this customer base even though further growth has been slow.
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