i-CABLE, once the leading provider of pay-TV services in Hong Kong, is on course to license its content to mainland Chinese telecoms giant China Mobile. The deal caused i-CABLE shares to more than double on Monday as investors sensed a possible turnaround in its fortunes.
The company revealed a memorandum of understanding that could see programming made by i-CABLE’s iTL subsidiary licensed to the carrier. i-CABLE said the non-exclusive deal would be expected to run for 20 years. The two companies are also in discussions about sharing and upgrading network resources.
i-CABLE operates as a cable TV platform and covers some 95% of Hong Kong households. It has lost ground notably to its main IPTV-based competitor, PCCW’s NowTV. After mounting losses, its major backer Wharf Holdings refused to provide further finance and sold it instead in April 2017 to a local consortium called Forever Top.
Half year financial results published last week showed that i-CABLE’s losses continuing to deepen. For the six months to June, i-CABLE suffered losses of $32.2 million (HK253 million,) on revenues of $74 million (HK$587 million).
In contrast, China Mobile is one of the most valuable telecoms groups in the world and at the end of July claimed 910 million mobile subscribers.
i-CABLE’s stock continued its upward rise in early trading on Tuesday. At HK$0.23 per share, the company is valued at $182 million (HK$1.43 billion).