Internet Protocol TV is Paying off for PCCW
From BusinessWeek: The Second Coming Of Richard Li
"At a sprawling control room in an old industrial building overlooking Hong Kong's Victoria Harbor, technicians tinker with tall racks of networking equipment and a wall of TV screens blinking everything from cricket matches and cartoons to fashion shows and porn. It would be a familiar scene at the home of any cable- or satellite-TV operator. But this network belongs to a telephone company -- PCCW Ltd., Hong Kong's leading fixed-line operator. For two years, PCCW, formerly Pacific Century CyberWorks, has been delivering pay TV over its broadband telecom lines."
"PCCW is showing that IPTV can succeed. Even though its service has limited interactivity, PCCW's NOW unit has signed up more than 450,000 customers. It trails i-Cable Communications Ltd., the cable monopoly owned by Wharf (Holdings) Ltd., which has 718,000 subscribers, but the gap is closing. In fact, PCCW accounts for some 30% of all IPTV subscribers worldwide. "PCCW is definitely at the forefront" in the world in IPTV, says analyst Michelle Abraham of Scottsdale, Ariz., consultancy In-Stat."
"If PCCW can maintain the momentum, it could not only prove broadband TV is commercially viable. It also could become one of Asia's better corporate turnaround stories -- and finally vindicate Richard Li's vision for PCCW. The second son of Hong Kong magnate Li Ka-shing, Richard Li, 38, was often ridiculed in the 1990s for his brash style and controversial deals. He launched PCCW in 1999, intent on creating an Asian Internet powerhouse. PCCW didn't live up to the hype, but Li was able to use its stock, inflated by the dot-com euphoria, to buy Hong Kong Telecom from Britain's Cable & Wireless in 2000. PCCW stock later plunged when the Net bubble burst, and its debt soared to $12 billion. Meanwhile, PCCW's fixed-line business lost customers as Hong Kong's phone market was deregulated. Li's telecom gambit looked like a fiasco."
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