EXHIBIT 5.10 THE ECONOMICS OF CABLE TV IN HONG KONG: SUMMARY
Breakeven price which must be obtained from average
customer to recover costs, as a function of
(a) Cost
(b) Penetration of households
Total cost of cable TV
service (NPV at 1988
of all costs to 2007)
BREAKEVEN PRICE PER MONTH
Network cost at
4.8%
43% penetration
HK$101
HK$93
HK$83
Cost
penalty
HK$9,570 m HK$9,125 m
Network 2,470 2,025
costs
Programm-
ing plus 7,100
operational costs
7,100
HK$96
HK$87
HK$80
HCV network (separate) (Telco)
HKT network
38 43 48
100
% penetration of households (year 2002)
Note :
(1) Breakeven price includes provision only for 6% cost of capital, net of inflation; no profit
element is included.
(2) Horizontal broken lines slope upwards to the right, slightly, reflecting the incremental
cost of connecting additional households.
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