PCCW Adds 26K IPTV Subscribers in 2H08

PCCW added 26,000 IPTV subscribers in 2H08 leaving it with a total of 953,000 IPTV subscribers at the end of 2008. This is consistent with its increase of 27,000 broadband subscribers over the same period, giving 1.302 M at the end of 2008. It also added 18,000 IPTV paying subscribers in 2H08, leaving it with 686,000 at the end of the year.

PCCW continues more than five years of growth with its IPTV service.

PCCW IPTV Innovation

Light Reading published an article that summarizes a speech given by PCCW at the IPTV World Forum Asia. It discusses how PCCW has turned IPTV from a defensive service into an offensive service through innovation.

This blog has chronicled many of PCCW's innovations over the last two years. Click on the PCCW link below to see other articles.

PCCW is really the poster child how to use IPTV to improve revenues, improve market position, and to reduce churn.

PCCW adds 45K IPTV Subscribers in 1H08

PCCW, the incumbent Telco in Hong Kong, added 45 thousand IPTV subscribers in 1H08, ending the half with 927 thousand nowTV subscribers. It hat 932 thousand subscribers at the end of July 2008.

This includes 40 thousand new premium viewers giving it 668 thousand subscribers that are paying for premium services. This has increased its nowTV ARPU to $US27 per month.

PCCW provides 160 channels with 85 exclusive channels. It also offers an HD set-t0p box that provides access to the digital terrestrial HD channels. It also supports a second set-top box to its premium service subscribers.

PCCW's fixed line business has actually been flat or has increased since 2H05.

PCCW continues strong IPTV growth. Larger companies such as Verizon and France Telecom have surpassed it in terms of the number of subscribers, but it is the clear leader in terms of market penetration. It is also the leader in terms of business and content strategy. It has demonstrated how to turn a free service into a significant revenue generator.

Deutsche Telekom has 154K IPTV Subscribers

Deutsche Telekom announced that it had 154 thousand subscribers at the end of 1Q08. It also announced that it had dropped the price of its starter package by 17 percent in March 2008.

Deutsche Telekom seems to be struggling with IPTV. It previously said that it had 150 thousand signed up at the end of 2007. Apparently, it did little more than install the unfulfilled orders during the first quarter.

I think that Deutsche Telekom must bundle a basic set of IPTV channels into its basic broadband service. This will be straightforward for ADSL-2+ customers but more tricky for VDSL users. It could use ADSL-2+ for the basic offering and VDSL for premium customers.

This approach has worked very well in France. Telia Sonera's IPTV service really took off only after it included IPTV channels in its basic offering. PCCW in Hong Kong has shown how this strategy can significantly increase ARPUs.

NEC to offer IPTV System

NEC will launch an IPTV system to the international market. It expects that this system will generate 50 billion yen ($US488 M) in sales by 2010. This IPTV system will include:

1. NEC products, from network architecture to delivery servers and household terminals, which will make it possible to guarantee the Quality of Service (QoS), Quality of Experience (QoE) and advanced security demanded along with interactive services.
2. Release of a video on demand server in April as the core system for new IPTV solutions.
3. PCCW/CASCADE's "QualiTVision*" middleware which has enabled IPTV deployments in Hong Kong and Thailand.

NEC is coming late to the game. Nearly all of the major carriers have committed to their IPTV architectures. Its opportunities are likely to come from Eastern Europe, the former Soviet states, Latin America, and the developing countries in Asia. Penetrating China is likely to be difficult for NEC, but it still may have some opportunities in India.

PCCW at 882K IPTV Subscribers

PCCW ended 2007 with 882 thousand IPTV subscribers up from 758 thousand at the end of 2006. At the end of 2007 628 thousand of these subscribers were paying for the service compared to up from 501 thousand at the end of 2006.

PCCW's IPTV ARPU grew from $18US at the end of 2006 to $US26 at the end of 2007. It has found that its premium sports and HD offerings are important reasons for this increase. Its advertising revenue is starting to gather momentum.

PCCW now offers HD content that includes live sports events, documentaries, and entertainment programming.

PCCW is still the IPTV service to watch. It has shown how to develop a viable business model that includes a basic free service. It is also a leader in IPTV advertising and IPTV interactive services.

ICTV Providing Interactive TV to PCCW

I went to the ribbon cutting for ICTV's new offices in downtown San Jose. It was quite a ceremony with the mayor of San Jose and two council members attending. The company moved to a downtown high rise rather than a Silicon Valley tilt up in order project an image appropriate for a media entertainment company.


ICTV gave me a demo of the kind of interactive services that its systems can provide. It showed a browser like screen on the TV that included one or more video windows along with surround texts and menus that can be selected using the remote control. It is proposing a business model in the U.S. where the programming would be built by programmers such as CNN and then delivered to cable companies as MPEG-2 streams. These cable companies would then deliver them over their video on demand infrastructure. This approach means that any digital set-top box capable of receiving video on demand services will be able to receive this interactive content.


PCCW accounts for 850 thousand of the one million viewers supported by ICTV's systems and services. PCCW uses ICTV for its TV based shopping service as well as for PCCW's successful film trailer service. A PCCW viewer can watch trailers for movies currently at the theater and then reserve seats and buy tickets for a particular showing. PCCW told me that it is selling more seats using the TV service than are being sold over the Internet.

ICTV looks like it has a good approach that will complement both cable and TelcoTV services. PCCW is showing that it is an effective way to enhance an IPTV service. From what I saw, I think that other IPTV service providers should take a look at it themselves.

PCCW Introduces ! Gig FTTH Services

PCCW, the incumbent telco in Hong Kong, now offers the PCCW 1000M+ gigabit Ethernet FTTH service two two thirds of Hong Kong's households. It also offers the 100M 100 Mbps Ethernet FTTH service. It stated that it plans to offer a 1.25 Gbps service some time in 2008.

The 100M service is priced at $US75 per month and the 1000M+ service is priced at $280 per month.

PCCW is stepping up the level of broadband competition in Hong Kong. These FTTH are premium services but are well priced for technology based small and home businesses.

PCCW's new offerings now compete directly with City Telecom's Hong Kong Broadband FTTH services in Hong Kong. This will put pricing pressure on City Telecom in order to maintain an advantage in this market.

PCCW Adds 92K IPTV Subscribers in 2007

PCCW, the incumbent carrier in Hong Kong, has announced that it reached more 850 thousand IPTV subscribers in August 2007. This is up 92 thousand from 758 thousand at the end of 2006. This is also up more than 32 thousand from the 818 thousand that the company had at the end of its first half in June 2007.

At the end of June PCCW also had 560 paying subscribers. PCCW offers a basic set of TV channels as part of its broadband subscribers, so there is no requirement to pay anything additional to get TV service. This is up 59 thousand from 501 thousand at the end of 2006. The company is adding new paying subscribers at almost the same rate as total subscribers. Its total number of subscribers increased 60 thousand in the 1H07.

The average customer spending for its IPTV service grew to US$21 at then end of June 2007 up from US$18 at the end of 2006. It attributed this increase in customer spending to several factors:

• Popularity of its Mega Sports package at US$28 per month
• Success in up selling its customers to two different packages priced at US$24 and US$47 per month each.
• New service installation set-top box rental fees
• Building momentum in advertising revenues
• Stock trading service introduced in August 2007

PCCW offers 150 channels today including exclusive access to sports, movies, news, and entertainment channels. In 4Q07 it will start to offer a split screen presentation showing four live football matches at one time along with football betting and network based PVR (NPVR).

PCCW stated that it was the first to offer HD in Hong Kong in July 2007.

PCCW also provides interactive services that enhance its sports viewing experience including:

• Access to promotional videos for all of its sports channels
• Head-to-head statistics, team line ups, player profiles available while watching a match
• Instant voting and results presentation for the player of the match

PCCW continues to be arguably the most innovative TelcoTV service globally. It is offering serices that the others are only thinking about right now.

PCCW also has been able to turn a "free" TelcoTV service into a money maker. Its TV service has been an important factor in maintaining its broadband growth and in stopping the loss of telephone customers. It is the only incumbent in a developed country that has been able to turn this loss around.

It is well worth taking a look at its 1H07 presentation.

PCCW Adding HD Channels in Hong Kong

PCCW in Hong Kong will broadcast more than 90 Barclay's Premier League football matches in HD starting in August 2007. PCCW will also broadcast other sporting events in HD, including 38 Italian Series A matches, 31 UEFA EURO 2008 matches and the Stanley Cup Playoffs, All Star and Regular Season Games and the Stanley Cup from the U.S. National Hockey League's 2007/08 season.

In addition, PCCW will provide value-added services to tie in with the launch of the 2007/08 season of the Barclays Premier League. For example, viewers will be able to view four live matches simultaneously via a split-screen function, as well as other interactive features that allow viewers to retrieve information on any Premiere League team or player by using the TV remote control.

To view HD programs, subscribers need to replace the standard set-top box with an HD version at the promotional rate of US$5/month (regular price US$10/month) for the set-top box rental. Customers subscribing to the US$62.50 Super Value Pack will receive the HD set-top box at no additional cost. The HD Sports package will be available to now TV Mega Sports Pack subscribers at at promotional rate of US$8.75/month (regular price US$11.25/month). There is a one-off charge for HD service installation and activation.

Also in August, PCCW will offer a dedicated HD channel, VOOM HD, which offers a collection of HD programming, including adventure travel, fashion, luxury lifestyles, art, live concerts, action sports and video games. Additional HD programming will be offered later.

This is the first HD IPTV offering in Asia. It shows that HD is becoming a global phenomenon. The low cost of HD sets will push all IPTV service providers into HD over the next couple of years.

PCCW Achieves Forecast

PCCW in Hong Kong ended 2006 with 758 thousand IPTV subscribers, which is 8 thousand than the 750 thousand that it had forecast for the year. This is an increase of 209 thousand increase over the 549 thousand IPTV subscribers that it had at the end of 2006. PCCW's broadband subscribers grew to 1.117 million at the end of 2006 from 953 thousand at the end of 2005.

PCCW received HK$739 million (US$95 million) in IPTV and content revenue in 2006. 501 thousand of the 750 thousand IPTV subscribers are pay TV subscribers. (The remaining 249 thousand IPTV subscribers take only the free channels included in the broadband subscription.) The ARPU for IPTV and interactive services grew to HK$140 (US$18) at the end of 2006 compared to HK$114 (US$15) at the end of 2005.)

PCCW added more than 30 TV channels in 2006 bringing its total to 120. This included exclusive rights for broadcasting the English Premier League (EPL) and the Union of European Football Associations (UEFA) soccer matches. PCCW plans to introduce HD in H2 2007 using ADSL-2+ at 18 Mbps..

PCCW's 2006 results are available at http://www.pccw.com/eng/Investors.html. Take a look at both the Annual Results Announcement and the Annual Results Presentation.

PCCW continues to add IPTV subscribers at a strong rate and to meet its own forecasts for its business. I have stopped second guessing them and accept their projections even though they are in a saturated broadband market. PCCW's IPTV service has been an important factor in its ability to add broadband market share and to retain basic telephone customers.

PCCW Introduces Photo Service

PCCW the incumbent telco in Hong Kong has added a digital photo service to its highly successful now TV IPTV service. This service is called snaap! and delivers photos and video clips to TVs, to PCs, and to mobile phones.

This service makes 100 MB of storage available free of charge. Customers can subscriber to an upgraded version of the snaap! service that provides 5 GB of storage and 20 free photo prints per month for $5 U.S.

PCCW continues to lead the IPTV market with new services. We expect that this kind of home media service will be imitated by other IPTV providers globally.