Hong Kong -- The economic downturn here has led monopoly
pay television provider Cable TV to indefinitely suspend the expansion of the hardwire,
fiber optic cable network that carries its service into subscribers' homes.
Chairman and managing director Stephen Ng Tin-hoi said
"economic reasons" meant that the Wharf Holdings-owned service will "slow
down [its] fiber optic building" program once it passes 600,000 homes this month.
But an analyst said Cable TV was paying the price for not
integrating its network rollout with that of Wharf's fixed-line telephone provider,
New T&T. "They don't have any integrated business plan or capital
expenditure, so there are not the essential synergies. New T&T says it is too
complicated to run the two together," the analyst said.
"It means that Cable TV is on its own and, if the
economy slows, then they have to reduce expenditures, especially after raising
subscription [fees] twice in seven months," he added.
The 600,000-home total was the last target agreed to with
the government when Cable TV received its license June 1, 1993. Although Cable TV's
bid was the only one submitted to officials, the government insisted that Ng's
business plan include a fiber optic network.
Some 160,000 of Cable TV's 400,000 subscribers are
currently hooked up to the fiber optic network, with the remainder receiving signals via
Cable TV's wireless system.
Cable TV has either had to build trenches or to reach
agreements with Hong Kong's subway operator, the Mass Transit Railway, to run its
wires through its ducts and tunnels -- which can double and possibly triple building costs
when compared with above-ground wiring methods.
Ng said Cable TV was likely to pass 600,000 homes with its
fiber optic backbone slightly ahead of the June 1 deadline, with about 40 percent of the
households agreeing to take its service.