Good afternoon. Welcome to the PCCW 2020 annual results presentation. Presenting today are BG Srinivas, Group MD, and Susanna Hui, Group CFO. We'll start with the presentation, followed by Q&A. With that, let me turn over to BG.
Thank you, Marco. Welcome to you all once again. 2020 has been one of the most challenging year for all stakeholders. The COVID-19 has had its impact on both lives and livelihood globally, as well as regionally. As Hong Kong continues to battle its way out of the recession, we have also seen that this has had an impact on all industries at large, and particularly some industries more acutely impacted. PCCW Group has ensured, even during these challenging times, to deliver our services without interruption, and making sure that at the same time, we have invested during these times to deliver, bring out new products and services which address the digital ecosystem. We have also seen increasing trust in our enterprise clients on their digital transformation journey, and we are partnering with these clients to enable them on their transformation journey.
At the same time, we have seen opportunities during the COVID year with respect to consumers increasingly consuming content online, as well as increasing transactions online. Between our telco operations and media operations, we have ensured that we launch new applications and services to actually capture these market opportunities. We have also made sure we have put in precautionary measures to protect our employees, both health and safety, as well as our customers. I must say that I feel proud to mention that during this challenging year, we have delivered a very steady performance. With that, I would like to move on to the next slide. Both our media operations, that's Viu OTT, our Free TV, as well as Solutions business, has delivered double-digit growth rate during these challenging times.
At the same time, Viu OTT has expanded its business regionally and making sure that our dependency on a single market is not necessarily so. At the same time, Solutions business has also increased both its revenue streams and customer base outside of Hong Kong. At the same time, our core businesses, our quad- play, telco services, as well as Solutions, we continue to maintain market leadership in Hong Kong, and we will continue to invest in furthering our market share in Hong Kong, at the same time, selectively expanding our footprint in the Asia region. With this, I would like to request Susanna to walk us through the financials, and I will be back talking a bit more about our Media business as well as our Solutions business. Thank you. Susanna?
Sure. Thank you, BG. While the COVID-19 pandemic persisted throughout 2020, our business adapted very quickly to the challenging operating environment, as well as settling into the new normal and delivered a very steady performance for the year. If you look at our financial highlights here on this slide, the consolidated revenue was up by 1%, from $4.81 billion to $ 4.878 billion for the full year. If we were to exclude the lower handset sales on the HKT side, consolidated service revenue altogether registered a 4% rise from $4.374 billion to $ 4.54 billion. As you can see from further breakdown here on the left bottom, HKT revenue, as we have reported our results yesterday, the revenue was resilient and in fact grew slightly despite the drop in the roaming revenue.
In terms of PCCW Solutions, it also recorded strong growth in revenue, as BG just now has mentioned, and this was driven by the very strong demand for data center and expansion in Southeast Asia. Furthermore, both Free TV and Viu OTT maintained their growth momentum during the year, benefiting from the increased video and entertainment consumption at home. Looking at the EBITDA side, total consolidated EBITDA eased 3% to $1.536 billion, as COVID-19 took its toll on roaming business on HKT side, and also caused some delays in some of the projects on the PCCW Solutions side, which contracted the margin. Nevertheless, some of these adverse impacts were offset by the further narrowing of both OTT and Free TV losses. Moving on to the segment details, probably I will not go into the details of HKT.
I would invite all of you to go back to the webcast yesterday if it is about HKT details. Suffice it to say that the HKT service revenue was stable, a s I said, despite the significant drop in roaming revenue as a result of the global travel restrictions. If we are to exclude the roaming effect, as well as to exclude the lower handset sales, actually service revenue would have had a growth of close to 3%. The growth mainly came from a very strong demand for our dependable broadband services as people work, study, and entertain at home. Obviously, we also benefit from the enterprises demanding higher bandwidth to avoid business disruption, a s well as, of course, accelerating their digital transformation in face of the new normal. Yesterday, as we said, it was a 6% growth in local data revenue, 3% on broadband, and 10% on the enterprise revenue.
International voice and data also grew at a decent 4% from the soaring demand for connectivity as a result of the global lockdown. Also, we benefited from the encouraging early take-up of our 5G services, which contributed to ARPU uplift of HKD 70 on average. In terms of EBITDA, HKT eased 2% to $1.6 billion at a very stable margin of 39%, mainly due to the higher solid EBITDA contribution from TSS, a combined efforts of stringent cost control, and as well as operational efficiency. Yesterday, the board of HKT has declared a 1% growth in terms of the distribution to the shareholders, this was made possible by all the savings in terms of the OpEx, due to the lower shop rental, as well as savings in discretionary spending, as well as disciplined CapEx and lower interest costs.
PCCW via its holding 50% stake in HKT, will receive dividend of $359 million for the full year 2020. Turning onto the next slide. Now TV. Basically, Now TV was integrated into HKT starting the last quarter of the year 2020, therefore, the last quarter numbers have already been included in HKT. To facilitate a year-on-year comparison, we have included the full year figures here. You can see here that in terms of revenue, it came in lower for the full year by 6% to $322 million. This is mainly affected by the suspension of live sport events in the first half, also prolonged local anti-epidemic restrictions on the pubs and bar sectors as well. Fortunately, this was partially offset by the growth in terms of the subscription of our Now E service, which targets the digital natives as well as the mobile population.
Also a pickup in terms of commercial subscriptions from hotels because of the staycation and the subscription from new offices, as well as a rebound in advertising revenue in the last quarter. In terms of EBITDA, our targeted content cost streamlining and lower marketing spend also helped to lift our margin from 17% to 18%, therefore, a very stable EBITDA of $58 million for Now TV was reported for the full year, despite the lower top line. Obviously, looking ahead into 2021, we expect that with the exclusive broadcasting rights in EURO 2020 and also more synergies coming from integration into HKT, basically the contribution will be even more. Turning onto the next slide. This is the OTT side. As just now BG has briefly touched on, the top line increased very significantly by 11%, from $137 million to $152 million for the year.
Mainly driven by a very strong 20% growth in video streaming revenue from $113 million to $135 million. This is particularly from the premium Viu service, which itself climbed 30% year-on-year as well. I will leave the operating metrics to be covered by BG later. Overall, with greater scale, we see EBITDA loss halved to $20 million. Turning to the next slide, Viu TV. Our Free TV business also reported a very strong revenue growth of 22%, from $33 million to $41 million for the year. In particular, advertising revenue was up 29% from $ 27 million to $35 million, despite a weak economy and a market-wide decline in terms of advertising during the pandemic. The growth came from an expanded viewership across both our linear channels as well as digital platform.
As we pulled in more viewers with our exciting and locally relevant content slate, for example, the recent talent show, "King Maker", which attracted a very strong following. With the expanded advertising revenue and the disciplined spend, EBITDA loss narrowed by a sizable 40% from $35 million last year to $21 million this year. As for our IT Solutions business, we had a good year for 2020, as total revenue climbed 12% to $607 million from last year's $541 million. This growth was primarily driven by the very strong demand for our data center services. Basically, we are operating at almost like full capacity. It was also made possible by the very solid project delivery in Hong Kong, as well as our business expansion in Southeast Asia, as BG mentioned.
You see here from the chart that the recurring revenue increased very significantly by 27%, from $323 million to $411 million. As I said, mainly due to the contracts in Southeast Asia, increased demand in our data center from hyperscale providers and leading financial institutions, and so on. Data center revenue was up by 15% year-on-year, and we have signed up, obviously, new leases in face of the increased demand to expand our data center capacity. Looking at the project-based revenue, it dropped by 10%. This is largely due to the lockdowns in the region, which delayed some of the project completion and compressed margin. We think that with the vaccine coming and hopefully the impending easing of the travel restrictions, this will come back to normal and we will continue to deliver in terms of our projects.
Overall, EBITDA was down from $130 million to $102 million, largely due to the COVID-19 impact, which affected some of the utilization of our staff. Of course, the good news is that we have a very healthy, very strong project pipeline, especially with the new wins of some of the mega contracts. Our secured orders increased very significantly by more than 170% to $3.2 billion from last year's $1.2 billion. This is again due to the very big wins from the public sector in both Hong Kong and Asia. Turning to OpEx. Overall, we have achieved a 10% savings in total core OpEx, which was down from $730 million to $660 million. The OpEx revenue ratio improved from 16% to 14%. This is due to the very stringent cost initiative put in place across the entire group in view of the COVID-19 challenging operating environment.
This includes also conscious efforts in terms of optimizing the distribution channels from offline- to- online, O2O, and shop consolidation, disciplined discretionary spending including publicity and promotion, and so on. On the HKT side, OpEx savings was at 8%. Similarly, Media and Solutions OpEx also registered savings. Turning to the next slide, CapEx. Total core CapEx dropped by 10% from $412 million to $371 million. If you look at the breakdown here, in terms of the HKT CapEx, it also dropped by 10% from $346 million to $312 million, even though we have basically rolled out majority of our 5G network during the year 2020. This was made possible because a lot of the infrastructure, TSS CapEx and so on, were made. CapEx for the Media also dropped noticeably after the studio upgrade was completed in the previous years.
On the other hand, CapEx for Solutions necessarily increased from $38 million to $45 million during the year, as we just now shared with you. The business expanded its data center capacity and upgraded some of the servers and systems in Hong Kong in view of the very strong demand for data center. CapEx to revenue ratio was at 8%, down from 8.8% last year to 8% this year. Turning to the next slide. This is the debt maturity profile. We have broken down into HKT and PCCW for easier reference. HKT, we have covered yesterday. All the outstanding, in terms of maturity, were well spread out, and half of it was in bonds, half of it was in banking facilities. The bottom half shows the PCCW debt profile. Sorry, I have to take this off because I can't breathe, if you don't mind.
Sure.
The bottom chart shows the PCCW debt profile. In January this year, we have issued $750 million perpetual securities, which were used to repay the bank loans and for general corporate uses. You can see here that there is a significant reduction in terms of cleanup, in terms of all the bank outstanding. The only debt outstanding would be the two bonds outstanding. These perpetual securities were classified as equity in terms of accounting. We have basically taken steps to strengthen and recapitalize the balance sheet. Turning to the next slide. Looking at the liquidity as at the end of 2020. This slide here shows the breakdown in terms of debt and liquidity comprising cash balance and undrawn facilities for both HKT and PCCW. Gross debt of HKT increased mainly due to the consideration paid to PCCW for the transfer of Now TV. It still has $ 1.4 billion liquidity.
Comprising $300 million cash and undrawn facilities of $1.1 billion. On PCCW side, most of the proceeds from the PERPs were used to pay down the debt. If you look at the post-PERP issuance debt level, it was down to $ 430 million, and now we have a cash balance of $ 400 million and $ 1.4 billion undrawn facilities. In terms of the debt to EBITDA ratio, basically, the PERP securities will be counted 50% as debt. We have calculated the corresponding gross debt to the EBITDA ratio, which is 4x right now. In terms of core debt to EBITDA ratio, it was around 3.6x. One point to note is that, the contribution of Now TV was only counted in the last quarter in HKT for only one quarter.
That might distort the debt to EBITDA ratio for HKT a bit. Finally, in terms of dividend, the board today has recommended a final dividend of HKD 0.23 per share, which together with the interim dividend, amounts to a full year dividend of HKD 0.3218 in total, which means that we are maintaining the dividend at the same level as 2019 full year. The dividend pass-through from the HKT dividends is at 89%. It's stable at 89%. Yield is, based on the current share price, is around 7.3%. If you look at the slide here, CAGR , if we just look at the cash dividend for the past many years, it was a CAGR of 8% for the cash dividend growth. With that, concludes my presentation on financials, and I will pass back to BG for the operational review.
Thank you, Susanna. Jumping back to the Media business. Our Viu OTT showed a remarkable growth of 29% in jump in monthly active users across all the markets we operate. We also saw in the first half of last year that the ad spend had reduced in some of the markets, and we've used the opportunity to push our premium content behind the paywall, thereby driving increased paid subscribers. The overall paid subscribers jumped 47% during the same year. We will continue to have our business model both focused on monetizing both SVOD and AVOD , thereby fine-tuning our value proposition in each of the markets and making sure that we have twin engines for revenue growth. As you can see, the revenue jumped 30% during the year, the Viu streaming business, and the overall subscription grew by 62%.
We've also ensured in Greater Southeast Asia, which is a high-growth market, we have come out as a leader, both in terms of number of users as well as leading position in streaming minutes as well as paid subscribers. While the market grew by 17% across Greater Southeast Asia, Viu business grew by 63%, a significant jump compared to last year. We do believe that there is significant market opportunity as we look into the forecast for the next five years. The market is forecast to grow at 19% CAGR . We are well-positioned to leverage this market opportunity as we continue to invest in these markets. Our premium content has definitely helped in making sure of our leadership position. We clearly see the Korean content, which typically leads in these markets.
We have partnered with all the major production houses in Korea to bring in the best premium quality content to our users. At the same time, we have invested significantly in producing Viu Originals. As you can see from the slide, Viu original titles won 33 awards in the Asian Academy Creative Awards. With a combination of both premium content, which we source, as well as our own originals, we have been able to make sure that our users not only enhance, but also the fact that they stay with us because of this kind of a hybrid quality of premium content. We are also leveraging data analytics both to ensure that we analyze our viewership behavior, as well as it helps us to design and plan our content strategy better. Moving ahead, a brief view on the Free TV business.
As was mentioned earlier, we saw a significant drop in the ad spend in Hong Kong, and in spite of that, the Free TV has demonstrated a very aggressive growth rate of 22% for the full year. We have also seen enhancement of the ratings up by 89% for the full year. This is for the prime time. Also, the digital stream use increased 30% during the same period. We have also lined up strong programming content for this year as well, building on the momentum of what talent and formats which we designed last year. We have also invested locally in development of local artists. As you can see from the slide, several of them have gained recognition in the market, winning awards.
We will continue to focus on this strategy of developing talent, nurturing them, and making sure we are able to build on this development of talent as we go forward on these talent shows, as well as making sure that these talents work with us and they partner with us to come out with better shows. Moving on to the Solutions business. As was mentioned, we had a healthy growth of 12% for the full year. The revenue stream was broad-based across various industry segments. As you can see, the public sector both showed growth in Hong Kong as well as in Singapore. Telecom across the region, including Hong Kong and Mainland China. We have also had a broad set of services, thereby enabling our customer footprint to enhance within each customer with multiple services. Digital, Cloud and Solutions, as well as application development, demonstrated growth during 2020.
We also had several large deal wins during the year, which you can see the secured order backlog has gone up by 172%, a significant jump, and stays at a healthy backlog of $3.2 billion. We believe this would help us continuously drive revenue streams for the coming years by these kind of large deal wins. We have selectively expanded our footprint in the region. Singapore, Malaysia, as well as Philippines and Indonesia, we have seen new projects wins. At the same time, we have leveraged Philippines and Malaysia as our offshore delivery centers, both tapping into the local talent as well as reducing our cost structure to support markets like Singapore and Hong Kong. We also are leveraging our capabilities developed in Hong Kong on public sector as well as our telecom sector to go after customers in the region.
We have also invested in data center in Malaysia to leverage market opportunities in Southeast Asia for our data centers. In Hong Kong, we are working very actively with the government across various government entities, both driving digital transformation initiatives as well as fostering fintech innovation. Across board, we are working very closely with the government entities, enabling automation, enabling process simplification, and in the process, enabling building out the smart city. Our data center business continues to expand. We will be completing the phase two of Fo Tan this year. One-third of the capacity is already pre-sold. The new data center in Tsuen Wan West is going to be completed next year. The first phase will be completed next year. We already have secured contract extensions with our large clients in the region, both global and regional players.
Our data center capacity is at a steady stream of 95%, and we believe this will further drive growth into our new data centers, which we are investing into. Here are a couple of deal wins and case studies during the year. As you can see, these are some of the marquee customers, large deal wins. The Treasury of Hong Kong government, the government of Singapore, and one of the large hyperscale cloud service provider in the region. We also saw wins in Taiwan. This is one of large retail chain where we are supporting this retailer in enhancing their e-commerce platform and driving automation. We also work closely with Gammon Construction in facilitating and upgrading quarantine facilities in Hong Kong. We are also working with one of the large leading banks in Hong Kong, supporting them on their credit risk analysis, leveraging both data analytics and AI technologies.
As we get into 2021, we do believe with the rollout of COVID vaccines, we do believe the fact that the economic recovery is bound to happen. As a group, across our telecom services, our Media and Solutions, we are very solidly placed to both address the digital transformation initiatives of enterprise clients, as well as the consumers who are increasingly consuming content, increasingly interacting. With the 5G rollout within HKT, we are well poised to also tap into new applications, which will be addressing some of the government and enterprise initiatives on IoT. With this, I would like to pause and happy to take questions. Thank you.
If you have questions, please submit them on the online platform. The first question is, how do you plan to continue driving growth for Viu in the coming years?
Thank you. As I mentioned during the presentation, in Greater Southeast Asia, we see a lot of market opportunities for further growth. We are well-positioned across all these markets. Our premium content, both our ability to source the best quality content, which is Korean, as well as, as you saw, the quality original productions helped us to derive growth. We are leveraging data analytics very aggressively in terms of both analyzing our consumer behavior, as well as targeting new customer sets. We are also leveraging these data analytics to also build on what kind of content makes more business sense in these markets. We'll continue to invest in quality original production, as well as making sure our technology platform is enhanced to drive better user experience. With this, we are well poised to continue to build on double-digit growth rate in the region.
The next question is, what caused the decline in EBITDA for Solutions, and do you expect it will rebound in 2021?
In the first half of last year, when the lockdown was imposed in some of the markets, including Hong Kong, it took some time for our enterprise clients to get back business. In that context, the utilization dropped during the period, and hence, there was an EBITDA impact. There was also a few of bad debts which we had to clean up for the first half of last year, in 2020, which also had a one-time impact on the EBITDA. The project delays, particularly which impact milestones, were again recent because of lockdown. We do believe that in 2021, some of this will be offset by the new deal wins with higher margins.
The next question is, how does Viu TV plan to maintain its revenue growth, given the intense competition with other Free TV operators, as well as digital entertainment services?
If you take the Viu TV's performance in the last couple of years, in spite of intense competition, Viu TV has demonstrated, particularly with respect to the quality of local production, both drama series as well as reality shows, in order to capture viewership. At the same time, Viu TV works very actively with the advertisers in enhancing their advertising campaigns. In spite of the competition, we have been able to grab market share in a declining ad spend market, and that clearly demonstrate the team's strength, both in terms of making sure that our content is attractive across all genres, as well as the fact that the advertisers are happy to work with Viu TV in enhancing their own advertising campaigns.
The next question is, where do you plan to add data center capacity in the region?
Significant part of our data center capacity will continue to be enhanced in Hong Kong, where we have already made investments. The Fo Tan data center will get ready this year, and Tsuen Wan West, the first phase will get ready next year. The next three years, we will have significant expansion of our data center capacity in Hong Kong. At the same time, we see specific opportunities in Southeast Asia. We have made an investment into data center in Malaysia, and that is something we will expand as and when the customer increases their footprint in our data center.
The next question is, do you expect the weak economy to impact the revenue growth and EBITDA margin of the Media and Solutions businesses in 2021?
We do believe that the revenue growth, even in the most challenging year, 2020, we have demonstrated double-digit growth for both these businesses. Even in 2021, we are targeting to drive revenue growth because there are market opportunities. As you saw, we have a very healthy secured order backlog in Solutions, which will help build the revenue momentum. At the same time, our Viu OTT business, we see market opportunities across Greater Southeast Asia, and we will capture those market opportunities. As far as EBITDA margin is concerned, on a year-on-year basis, we have shown that the Viu OTT business has the ability to improve margin effectiveness and thereby, in the next coming years, we should see better EBITDA margins for both Media and Solutions.
The next question is, when do you expect the OTT business to become profitable?
As I just mentioned, year-on-year, we are driving improved efficiencies for the OTT business. Our ability to leverage data analytics to both plan and source our content, as well as understand consumer and user preferences, and ability to target acquisition of new customers has helped us. As we have scaled this platform with acquisition of more and more user base, we have been able to drive increased efficiencies. In the next one to two years, we do believe that we are poised to break even.
The next question is, could you please give us CapEx guidance for 2021?
2021, the only enhancement, which is again in line with the business plan, is our investments into data center. We don't see any significant spike because of these investments. These are planned investments like we do for every year. The data center is the only business which drives more CapEx spend. On Viu OTT, it's again the content. Again, the content investments will be in line with the revenue growth. In terms of percentages, it will be in line with what we have seen in the last one to two years.
The next question is, roughly how much of the digitization-driven OpEx savings was done in the past years, and how much more is to come?
Susanna, you want to take it?
How much of the digitization-driven OpEx savings was done in the past year, versus how much more to come? I think this is an ongoing process. We have started to embark on this digitization journey probably a couple of years back. I think we have completed quite a lot, but it is an evolving journey, and we will continue to obviously improve and enhance the entire process, which, of course, will accumulate in terms of the OpEx savings in the years to come as well.