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27Okt2000 CHINA: China opens Internet to the cable TV industry.
BEIJING - In a step that could dramatically boost competition in Chinese telecommunications, the government has repealed a rule barring the cable television and phone industries from each other`s businesses, a top regulator said on Wednesday.
"They are allowed to compete," Liu Cai, director general of policy and planning at the Ministry of Information Industry, told reporters at a reception.
The move might also create fertile ground for investment by foreign companies seeking to tap China`s booming Internet market.
China prohibits foreign stakes in cable stations, but has promised to allow overseas investment in Internet service providers after the country joins the World Trade Organisation.
The new rule could potentially make the country`s 2,000 cable operators ripe for foreign partnerships.
China erected a regulatory wall between the industries a year ago after deadly battles broke out in the southern province of Hunan between cable TV executives and telephone officials who muscled into one another`s turf.
Gunfights and riots broke out in some counties after cable TV officials chopped down telephone lines that carried video programming, and one state newspaper reported that more than 100 people were injured or killed in the clashes.
CABLE`S PRAYERS ARE ANSWERED
Despite the ban, however, some local branches of state phone giant China Telecom have continued to pipe television service to their customers, and many of the country`s 2,000 cable TV stations have carried Internet and data over their networks.
By blessing the convergence of the sectors, Beijing appears to be trying to spur competition to strenghten the telecoms industry ahead of China`s entry to the World Trade Organisation, after which foreign firms will be allowed to participate.
"Of course they can provide Internet services," Liu said of cable TV companies. "But they must have a licence."
Cable companies that already provide or hope to provide Internet access and data services should apply for licences at the Ministry of Information Industry, he said. The same goes for phone firms seeking to deliver TV services.
The two industries would not be allowed to produce TV programming, however, he said. The creation of such content would be left to China Central Television and local state-controlled broadcasters, he said.
On balance, the rules appear to be a bigger boon to cable.
The opportunity to sell Internet access might be just the trick to boost stations` profits, which are eaten into by pirate operators. The stodgy state programmes they are required to carry also make it difficult to raise high adertising revenues.
AN OPPORTUNITY FOR RUPERT MURDOCH?
Foreign media companies, such as Hong Kong-based Pacific Century CyberWorks and Rupert Murdoch`s Star TV, are seeking middlemen to carry their Internet video programming to Chinese viewers, and the new regulation could make cable stations their best bet.
The benefit of the new rule to phone companies is less clear.
China Telecom makes massive profits charging sky-high long distance fees. But because local phone fees are bound by price ceilings, two-thirds of the firms`s provincial branches are actually losing money.
They have turned to TV programming as a strategy to prop up their bottom lines.
But the requirement that cable and telephone firms draw their TV content from the same source makes it unclear how China Telecom`s video service would be able to distinguish itself.
(c) Copyright China Securities Bulletin.
Quelle: CHINA SECURITIES BULLETIN 27/10/2000
27Okt2000 CHINA: China opens Internet to the cable TV industry.
BEIJING - In a step that could dramatically boost competition in Chinese telecommunications, the government has repealed a rule barring the cable television and phone industries from each other`s businesses, a top regulator said on Wednesday.
"They are allowed to compete," Liu Cai, director general of policy and planning at the Ministry of Information Industry, told reporters at a reception.
The move might also create fertile ground for investment by foreign companies seeking to tap China`s booming Internet market.
China prohibits foreign stakes in cable stations, but has promised to allow overseas investment in Internet service providers after the country joins the World Trade Organisation.
The new rule could potentially make the country`s 2,000 cable operators ripe for foreign partnerships.
China erected a regulatory wall between the industries a year ago after deadly battles broke out in the southern province of Hunan between cable TV executives and telephone officials who muscled into one another`s turf.
Gunfights and riots broke out in some counties after cable TV officials chopped down telephone lines that carried video programming, and one state newspaper reported that more than 100 people were injured or killed in the clashes.
CABLE`S PRAYERS ARE ANSWERED
Despite the ban, however, some local branches of state phone giant China Telecom have continued to pipe television service to their customers, and many of the country`s 2,000 cable TV stations have carried Internet and data over their networks.
By blessing the convergence of the sectors, Beijing appears to be trying to spur competition to strenghten the telecoms industry ahead of China`s entry to the World Trade Organisation, after which foreign firms will be allowed to participate.
"Of course they can provide Internet services," Liu said of cable TV companies. "But they must have a licence."
Cable companies that already provide or hope to provide Internet access and data services should apply for licences at the Ministry of Information Industry, he said. The same goes for phone firms seeking to deliver TV services.
The two industries would not be allowed to produce TV programming, however, he said. The creation of such content would be left to China Central Television and local state-controlled broadcasters, he said.
On balance, the rules appear to be a bigger boon to cable.
The opportunity to sell Internet access might be just the trick to boost stations` profits, which are eaten into by pirate operators. The stodgy state programmes they are required to carry also make it difficult to raise high adertising revenues.
AN OPPORTUNITY FOR RUPERT MURDOCH?
Foreign media companies, such as Hong Kong-based Pacific Century CyberWorks and Rupert Murdoch`s Star TV, are seeking middlemen to carry their Internet video programming to Chinese viewers, and the new regulation could make cable stations their best bet.
The benefit of the new rule to phone companies is less clear.
China Telecom makes massive profits charging sky-high long distance fees. But because local phone fees are bound by price ceilings, two-thirds of the firms`s provincial branches are actually losing money.
They have turned to TV programming as a strategy to prop up their bottom lines.
But the requirement that cable and telephone firms draw their TV content from the same source makes it unclear how China Telecom`s video service would be able to distinguish itself.
(c) Copyright China Securities Bulletin.
Quelle: CHINA SECURITIES BULLETIN 27/10/2000