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William Yeung - HK Broadband Network - BBWF 2011 Keynote Day 3
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William Yeung - HK Broadband Network - BBWF 2011 Keynote Day 3

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Broadband World Forum 2011 - William Yeung - HKBN - Keynotes Day 3

Broadband World Forum 2011 - William Yeung - HKBN - Keynotes Day 3

Published in: Business, News & Politics

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  • 1. FTTH deployment in Hong Kong:Successful story of a forerunner Mr. William Yeung, CEO Hong Kong Broadband Network Limited 29 Sept 2011
  • 2. We offer 1Gbps for EUR18/month 2
  • 3. Agenda1. Successful Model2. Critical Drivers3. Sustainable Business 3
  • 4. Successful Business Model1. Outperform Competitors on Financial Performance 1H FY2011 Results HKBN PCCW i-Cable HTHK (HK$mn) Revenue 826 12,186 1,051 6,018 EBITDA 303 3,775 68 1,243 Net Profit 168 824 (55) 494 Total Assets 2,284 36,162 2,232 19,521 Equity 1,760 (3,216) 1,693 10,076 EBITDA Margin 36.7% 31.0% 6.5% 20.7% Net Margin 20.3% 6.8% -5.2% 8.2% Return on Total Assets 14.7% 4.6% -4.9% 5.1% Return on Equity 19.0% -ve Equity -6.5% 9.8% Source: Interim Reports by City Telecom (Parent Company of HKBN), PCCW, i-Cable and HTHK 4
  • 5. Successful Business Model 2. Consistent Organic Growth Change from 1H FY11 FY05 FY06 FY07 FY08 FY09 FY10 FY05 to 1H (Proforma)* FY11(x) Broadband 000 229 220 247 316 391 526 551 2.4x Voice 000 294 281 308 329 382 431 449 1.5x IPTV 000 109 116 128 156 170 153 159 1.5xTotal subscriptions (000) 000 632 617 683 801 943 1,110 1,159 1.8xTurnover HK$ mn 1,137 1,160 1,141 1,303 1,478 1,575 1,652 1.5xEBITDA HK$ mn 66 245 354 378 508 469 606 9.2xProfit After Tax HK$ mn (206) (92) 29 125 213 217 335 2.6x* Financials based on 2 times of 1H FY11 5
  • 6. Successful Business Model3. From the 4th Player to the 2nd Largest Player Broadband Subscribers (‘000) 1,800,000 HKBN PCCW 1,500,000 (Note 2) HGC 1,200,000 i-Cable 900,000 600,000 300,000 0 ? Others 2006 2008 2010 2012 2014 2016 Source: PCCW, CTI, i-Cable and HTHK Interim and Annual Reports, JP Morgan’s HTHK report “Hutchison Telecom Hong Kong Holdings Ltd” dated 12 Aug 2009, and Company information Note: 1.HTHK no longer discloses broadband subscribers as of 31 Dec 2009, hence, all subsequent data is estimation only 2.Shadow area represents Company estimation only 6
  • 7. High Growth for Fibre Only 34% FTTH/B penetration 7
  • 8. Drivers for SuccessThree “must-have” criteria for compelling “Returnon investment” (ROI) 1. Recession resilient 2. Dense Population 3. Pro-competition landscape 8
  • 9. Drivers for Success 1. Recession resilient Change from 1H FY11 FY05 FY06 FY07 FY08 FY09 FY10 FY05 to 1H (Proforma)* FY11(x) Broadband 000 229 220 247 316 391 526 551 2.4x Voice 000 294 281 308 329 382 431 449 1.5x IPTV 000 109 116 128 156 170 153 159 1.5xTotal subscriptions (000) 000 632 617 683 801 943 1,110 1,159 1.8xTurnover HK$ mn 1,137 1,160 1,141 1,303 1,478 1,575 1,652 1.5xEBITDA HK$ mn 66 245 354 378 508 469 606 9.2xProfit After Tax HK$ mn (206) (92) 29 125 213 217 335 2.6x* Financials based on 2 times of 1H FY11 9
  • 10. Drivers for Success2. Dense Population CAPEX per GDP/ Home Capita Pop Area Density passed Country (2010, US$) (million) (mi2) (mi2) (US$) HK 31,591 7 428 16,355 200 US 47,284 311 3,717,813 84 1,000 to Japan 42,820 128 145,868 877 4,000 Source: IMF 2010 data and Company Information/Estimates 10
  • 11. Drivers for Success3. Pro-competition landscape 11
  • 12. Sustainable Business Model 1. World Trend…. We are not alone! Japan’s Fibre vs Copper Trends US Verizon’s Fibre vs Copper Trends 20.0 7.0 18.0 6.0 16.0 Copper (xDSL) Subscribers million Copper (xDSL + CATV)Subscribers milliion 14.0 5.0 12.0 4.0 10.0 8.0 3.0 6.0 Fibre (FTTH) Fibre (FiOS FTTH) 2.0 4.0 2.0 1.0 - - Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Oct-06 Oct-07 Oct-08 Aug-06 Aug-07 Aug-08 Aug-09 Oct-09 Apr-06 Apr-07 Apr-08 Apr-09 Feb-06 Feb-07 Feb-08 Feb-09 Jun-06 Jun-07 Jun-08 Jun-09 FY06 FY07 FY08 FY09 Source: Japan’s Ministry of Internal Affairs and Communications Source: Verizon FY09 / FY10 Annual Report 12 12
  • 13. Sustainable Business Model2. Talents as Unique and Ultimate Edge 3Es • Entrepreneurship • Execution • Engagement 13
  • 14. Sustainable Business Model2. Talents as Unique and Ultimate Edge • Entrepreneurship Management compensation tightly pegged with KPI 14
  • 15. Sustainable Business Model2. Talents as Unique and Ultimate Edge • Execution Pledge Ceremony for 3,000+ talents in Hong Kong and Guangzhou – launch of customer acquisition campaign for 100Mbps at EUR9/mth 15
  • 16. Sustainable Business Model2. Talents as Unique and Ultimate Edge• Engagement “Japan Study Mission Trip” 2009 “Awesome Germany Trip” 2010 16
  • 17. Sustainable Business Model2. Talents as Unique and Ultimate Edge• Engagement “Get Everybody Moving (G.E.M.) Sparkling G.E.M. Evening” 2011 17
  • 18. Sustainable Business Model2. Talents as Unique and Ultimate Edge• Engagement “CxO of the Future” 2011 Management “Reading Day” 18
  • 19. Going Forward – Continue to monetize our “Dumb” Pipe • Free TV business venture • Multimedia production center • And more …... – “Partnership” with players in the ecosystem ( contact me at william@hkbn.com.hk ) 19
  • 20. Thank You 20