24 24 MTRMTR CORPORATIONCORPORATION LIMITED NEW DIM and otherbusinesses Station commercial Executive management’sreport of its advertising media through format refinements and million. The Company continued to enhance the attractiveness During the year, advertising revenue rose by 4.7% to HK$534 Advertising opened in September. economy and the contribution from 360, which over 2005. The revenue increase was supported by the strong telecommunications, revenue would have increased by 8.0% a much smaller one-off gain in 2006 also relating to to the termination of a telecommunications contract and HK$1,606 million. Excluding the one-off gain in 2005 relating other businesses increased by 3.3% in 2006 over 2005 to Revenue from the Company’s station commercial and en

advertising. giving advertisers another venue for product display or poster were introduced at Causeway Bay and Kowloon Tong stations, debute during off-peak hours. New 6-sheet scrolling units advertising train, the “Spectacular Mobile Showcase”, made its were introduced in eight MTR stations in May. In June, a new Among new formats introduced, Real Time Projection Zones slowed in the second half of 2006. innovation, although the growth of the advertising market s i o n s 25

25 ANNUAL REPORT 20062006

and other businesses increased businesses other and Our success in leveraging our railway assets assets railway our leveraging in success Our commercial station from revenue as continued, New plasma rings were MTR offers an increasing MAIN IMAGE installed at three stations RIGHT variety of channels to advertisers

s n o i s en NEW DIM NEW 26 MTR CORPORATION LIMITED BELOW would have decreased by 3.2%. the one-off items in 2005 and 2006 mentioned earlier, revenue to HK$259 million as compared with 2005. However, excluding Revenue from telecommunications services decreased by 22.5% Telecommunications in MTR stations. customers to settle their bills at all Customer Services Centres In February, a new service was introduced allowing CLP Power feeback was received from both passengers and advertisers. Company’s successful portfolio of free publications in April. Positive advertisers. A new infotainment magazine, entertainment to passengers, as well as more creative media to by a multimedia system that offers more information and On the Airport Express, the seatback TV in carriages was replaced network. would not miss a beat in stock movements when using the MTR provide real-time updates on the Hang Seng Index, so passengers system of the Concourse Plasma Network was upgraded to Central and Mong Kok stations during the year. The backend end. Three new Plasma Rings were installed at Tsim Sha Tsui, number of trackside plasmas increasing from 68 to 100 by year The MTR Plasma TV network expanded considerably, with the total Station commercialandotherbusinesses Executive management’sreport Higher rental rates boosted station commercial revenue ” metro pop” , joined the

expanded its presence in the market. The company’s optical fibre During the year, TraxComm Limited recorded higher revenue as it revenue shortfall. continued to show positive growth, partially offsetting this telecommunications business, such as rooftop site rental, led to revenue reduction for the Company. However, other continued to experience a steady decline. This migration has and corresponding revenue generated by the 2G platform as intense competition leading to price reductions, call minutes Due to the migration of mobile subscribers from 2G to 3G as well business activities Revenue from station commercial and other MTR system which have undergone renovation. Lam and Tsing Yi. This brings to 38 the number of stations in the Tau Kok, Choi Hung, Kowloon Tong, Shek Kip Mei, Lai Chi Kok, Po of 11 stations: Admiralty, Fortress Hill, Tin Hau, Quarry Bay, Ngau During the year, renovations were completed in the retail zones rise by 13.7% over 2005 to HK$391 million. rental rates, which offset a temporary net loss of retail space, to Station commercial facilities revenue benefited from higher Station commercial bandwidth services has increased to over 180 Gbps. network now covers 40 locations, whilst the capacity of its by advertising income and kiosk rental. Growth in revenue from station commercial and other activities was led Advertising Kiosk rental services Telecommunication Consultanc business revenue Ngong Ping360 Others y in HK$million 2002 979 18 93 23 63 39 6 8 9 1,117 2003 19 14 11 38 27 8 3 5 6 5 1,311 2004 18 12 29 23 46 2 6 8 8 7 1,555 2005 15 51 34 33 21 6 0 4 1 4 1,606 2006 159 534 391 259 199 64

27 ANNUAL REPORT 2006 In all, 32 new shops and 15 new new 15 and shops new 32 all, In LEFT network retail railway the joined trades skating rinks, children’s clothing stores and laundry services. services. laundry and stores clothing children’s rinks, skating transport sectors in . MTR Corporation’s share of the the of share Corporation’s MTR Kong. Hong in sectors transport million. HK$68 to 2005 over 70% by rose OHL in profit increasing an by driven was growth business years, previous in As As usage. card Octopus higher and providers service of number had providers service of number total the 2006, December 31 at and circulation in Cards earlier. year a 349 from 431 to risen 13.2 from risen respectively had value transaction daily average HK$73.3 to million HK$64.7 from and million, 14.7 to million providing institutions Financial period. same the during million the over 22 to 19 from rose service add-value automatic Octopus add-value per increase the offering now institutions five with year HK$500. of accepting were minibuses green 59 further a end, year By represents which 2,806, to total the bringing card, Octopus minibuses red of number the whilst fleet, entire the virtually The 2005. in 171 from 215 to increased card the accepting payment Octopus the in participate that parks car of number total. in 231 to 203 from rose system participating chains retail sectors, service public and retail the In supermarket, included year the during system Octopus the in into entry gained also system The bakeries. and shops biscuit exhibitions, churches, including 2006 in sectors new several Octopus Holdings Limited Holdings Octopus its on built (OHL) Limited Holdings Octopus year, the During non- and transport the to services payments providing in success patronage has been very encouraging with local and overseas overseas and local with encouraging very been has patronage 2007. March in million 1 over reaching visitors Although the launch was delayed some weeks by teething teething by weeks some delayed was launch the Although tourists and public Kong Hong the of response the problems, and enthusiastic been has attraction new important this to opened in September and recorded revenue of HK$64 million up up million HK$64 of revenue recorded and September in opened 2006. of end the to Ngong Ping 360, the cable car running from to the the to Chung Tung from running car cable the 360, Ping Ngong Island, Lantau on Ping Ngong at complex temple and Buddha Big attractions, tourist various offering village theme a with together HK$159 million. HK$159 360 Ping Ngong Miscellaneous business revenue including car park rental, rental, park car including revenue business Miscellaneous publications and connections station new sales, ticket souvenir reaching year, previous the over 1.9% of increase an registered to win prizes worth up to HK$50,000, with the objective of of objective the with HK$50,000, to up worth prizes win to for sales stimulating and brand shop MTR the enhancing tenants. our We also expanded our cross-selling promotions to include a include to promotions cross-selling our expanded also We cash and offers discount offering cards scratch instant of scheme draw lucky grand a with shops, network MTR in use for coupons the station retail network, including LUSH, CEU, AEON, Sanrio Gift Gift Sanrio AEON, CEU, LUSH, including network, retail station the Durance. and Gate Elements, resulted in total station retail area decreasing by 12% or or 12% by decreasing area retail station total in resulted Elements, metres. square 16,867 to metres square 2,203 to added were brands or trades new 15 and shops new 32 all, In operation as a result of the renovations. However, the temporary temporary the However, renovations. the of result a as operation to Station Kowloon at space retail of metres square 2,671 of loss centre, shopping new the with works integration station facilitate A total of 468 square metres of new retail area came into into came area retail new of metres square 468 of total A 28 MTR CORPORATION LIMITED end of 2007 is on schedule. completed in October and the opening of Phase 1 by the Songjiang New Town Station to Guilin Road Station were Shanghai Metro Line 9 proceeded well. The civil works from In Shanghai, the project management consultancy work on valuable new contracts that are in line with our strategy. the year, we saw good progress on existing projects and secured activities generated revenue of HK$199 million in 2006. During consultancies which can enhance the skill sets of our staff. Such opportunities in the Mainland of China or in Europe, or focused on key cities where such work may lead to investment The Company’s strategy for consultancy business remains External consultancy enabling them to enjoy benefits at ten participating partners. Octopus cardholders had registered their cards for the programme, cards, continued to thrive. As at year end, over 1.2 million earn and redeem rewards points with their registered Octopus The Octopus Rewards Programme, through which people can above Station commercialandotherbusinesses Executive management’sreport Ngong Ping 360 has had an encouraging start since opening in September the new vehicles and the new signalling systems. achieved included the reliability demonstration period for both SkyPlaza and the saw good progress. Major milestones Mover System to connect the Hong Kong International Airport to In Hong Kong, the project to construct an Automated People Guangzhou Metro. system design for a digital trunked radio system for the our contract with Motorola Asia Pacific Ltd. to support the Maintainability and Safety for five years. We also renewed to provide consultancy service on Reliability, Availability, we entered into an agreement with Chengdu Metro Corporation Supervision Control System for Beijing Metro Line 5. In Chengdu, a contract in Beijing to provide consultancy for the Integrated Among new contracts signed, the Company secured Ziyang Locomotive Works. Mass Transit, as well as a rolling stock consultancy for the CSR operation and management consultancy service for Tianjin Binhai training contracts for and Tianjin Metro, an completed satisfactorily during the year, including management Several consultancy projects in the Mainland of China were

29 ANNUAL REPORT 2006 The cable car and theme village have have village theme and car cable The ABOVE visitors overseas and local with popular proven

faced a variety of challenges and following a review of its its of review a following and challenges of variety a faced the took we 2006, of middle the in prospects and business business. the exit to decision Solutions (International) Ltd with a view to building a business business a building to view a with Ltd (International) Solutions had business The components. related rail of sourcing the in Rail Sourcing Solutions Sourcing Rail Sourcing Rail subsidiary owned wholly a up set we 2004, In In the UK, we secured consultancy assignments with with assignments consultancy secured we UK, the In London Cross and Rail Network Lines, Tube Rail, Metronet Limited. Links Rail advice to the Roads and Transport Authority on the city state’s state’s city the on Authority Transport and Roads the to advice designed being currently are which Line, Red and Line Green constructed. and years to 2008. to years engineering provide to contract a awarded were we Dubai, In second contract is with the Taiwan High Speed Rail Company and and Company Rail Speed High Taiwan the with is contract second centre control operation and service train station, covers two for maintenance system signalling as well as management, In Taiwan, two new contracts started in early 2006. Under the first, first, the Under 2006. early in started contracts new two Taiwan, In three for support maintenance and operational provide will we The Corporation. Transit Rapid Kaohsiung the to 2009 to years