News and Research on City Telecom HK Ltd. (CTEL)
Business Description
City Telecom (H.K.), Ltd. provides residential and corporate fixed telecommunications network and international telecommunications services in Hong Kong. The Company offers fixed telecommunications network services to the residential mass and small-to-medium enterprise market segments.
In addition to providing fixed telecommunications network services, the Company also offers international telecommunications services in Hong Kong and Canada. The Company offers various international telecommunications services and products, including direct dial services, international calling cards and mobile call forwarding services.
The Company's integrated suite of services include: high-speed broadband Internet access services that provide the Company's customers with symmetric upstream and downstream access speeds with options for 10 Mbps, 25 Mbps, 100 Mbps and 1,000 Mbps; fixed line local telephony through its voice-over-Internet-Protocol technology; pay television, where the Company deliver approximately 79 channels, including self-produced news, children’s programming, international drama and movies and local interest programming using its IP platform; and corporate data services, which includes provision of bandwidth to corporate customers.
As of August 31, 2006, the Company had a total of approximately 617,000 fixed telecommunications network services subscriptions, consisting of 220,000 broadband Internet access, 281,000 local VOIP and 116,000 IP-TV services subscriptions.
Fixed Telecommunications Network Services
Metro Ethernet Network Infrastructure: The Company's Ethernet infrastructure is a system of Category-5e copper wiring that connects its subscribers’ premises to its local area network (LAN), switches within a residential or commercial building. The Company offers a suite of services on a single IP network platform, including broadband Internet access, local VOIP, IP-TV and corporate data services.
Internet Access: Hong Kong Broadband Network Limited (HKBN), a wholly owned subsidiary of the Company offers broadband Internet services in Hong Kong using wireless technologies such as local multi-point distribution systems. The Company uses its broadband subscription base to up-sell its other fixed telecommunications network services, such as local VOIP and IP-TV. In addition to broadband Internet access services, the Company provides 56k dial-up Internet access and limited corporate Internet access via resale of another carrier’s service.
The Company offers broadband Internet access to its residential and corporate customers at access speeds of approximately 1,000 Mbps. It offers broadband service for bb10, bb25 and bb100. Its broadband Internet access packages offer a free e-mail service and various value added services, such as bbDrive, an on-line virtual hard drive with approximately 10Gb of storage, bbGuard, an anti-spam and anti-virus package, and bbWatch, a full-screen IP-TV service that is viewed on a personal computer.
In addition to the residential packages, the Company has developed broadband promotions that target corporate customers. It offers prepackaged plans that provide access at speeds of approximately 1,000 Mbps, which include on-site training, on-site maintenance support, data transfer and e-mail services.
Competition
The Company’s major competitors include PCCW-HKT Telephone Limited (PCCW-HKT) (through its subsidiary PCCW-IMS Limited), i-Cable and HGC.
Local VOIP: The Company offers its on-network local VOIP services in Hong Kong. To provide local telephony service, it installs P-based voice switching equipment in locations covered by its Metro Ethernet network. In addition, the Company installs such voice switching equipment together with its new installations of broadband equipment in some buildings. It offers a range of value added services, including call waiting, caller display and conference call services. The Company offers hardware-based off-network local VOIP services, which refer to as bb Phone services. bb Phone allows subscribers to use its local VOIP services through the broadband network of other operators. As of August 31, 2006, the Company had 281,000 local VOIP subscriptions.
In October 2005, the Company launched its global software-based VOIP services branded as 2b, which provides a global Hong Kong-telephone number service. This service is primarily targeted at the overseas Chinese community.
Competition
The Company’s competitors include PCCW-HKT, HGC, New World and Wharf T&T.
IP-TV: The Company’s IP-TV service provides DVD video delivered through its Metro Ethernet network to an IP set-top-box connected to the subscriber’s television set. This pay television service offers 79 channels consisting of a self-produced news channel and education and recreation channels (including children’s programming), and channels whose content is obtained from other content-providers. As of August 31, 2006, the Company had 116,000 subscriptions.
Competition
The Company’s two main competitors in the pay-TV business include i-Cable and PCCW-HKT. Television Broadcasts Limited (TVB) and Asia Television Limited (ATV) are indirect competitors to the company’s pay-TV services in the Hong Kong television market. Other competitors include satellite TV operators, such as Star TV.
International Telecommunications Services
The Company provides international calling card services and international direct dial services in Hong Kong. It offers its international telecommunications service under the IDD 1666 and IDD 0030 brand names. IDD 1666 provides subscribers with international direct dial using the access number 1666 in Hong Kong. IDD 0030 provides subscribers with international direct dial using the access number 0030 in Hong Kong. The Company’s Mobile Call Forwarding Services allows call forwarding of Hong Kong mobile numbers so that subscribers can receive calls while overseas.
International Telecommunications Network: The Company’s international telecommunications network infrastructure is a system of switches, self-owned and leased backbone capacity, interconnection arrangements and undersea cables that connect the subscriber’s telephone call to its destination. The Company provides undersea cable-based fixed telecommunications network services.
Interconnection Arrangements: The Company has entered into interconnection arrangements with other local fixed network operators in Hong Kong and overseas carriers to transmit calls between Hong Kong and overseas destinations for its off-network customers.
International Telecommunications Switching Systems: The Company owns three international telecommunications switching systems in Hong Kong and two in Canada, comprising one in each of Vancouver and Toronto. The Company’s three international telecommunications switching systems in Hong Kong handle telephone calls originating and terminating in Hong Kong. The Company’s telecommunications network mainly consists of Nortel Networks Limited switching equipment and compression units supplied by Cisco Systems, Inc. and ECI Telecom, Ltd.
Competition
The Company’s competitors in the international telecommunications business include PCCW-HKT, HGC, New World, and Wharf T&T.
History
City Telecom (H.K.), Ltd. was incorporated in 1992.
