Hong Kong’s City Telecom to sell off network for $644m
City Telecom, one of the biggest telecoms operators in Hong Kong, has signed an agreement to sell its telecom and broadband assets to local company Metropolitan Light Co. for around HK$5bn ($644m).
The buyer will receive HK$2.65bn from funds advised by London-based private equity firm CVC Capital Partners, and has access to HK$2.5bn of debt funding from banks including JPMorgan Chase & Co. and Standard Chartered Plc, according to City Telecom.
City Telecom spent around $400m on building its fibre-based broadband network, which currently covers just under two million homes across Hong Kong, and provides broadband and telephony services to residential and business customers through its subsidiary Hong Kong Broadband Network (HKBN).
HKBN will continue to have access to the broadband network it built for the next 20 years under the terms of the agreement, and plans to share part of its profits from the deal with shareholders.
The majority of the funds generated however will be used to consolidate its multimedia aspirations: City Telecom already operates a small IPTV service, and has recently applied for a free-to-air DTT licence.
If its spectrum application is successful then the company appears intent to invest heavily in content production facilities, as well as production professionals, in order to become a major content provider in Hong Kong and in the broader APAC region.