Star TV in exclusive carriage deal with i-Cable

PUBLISHED : Saturday, 11 May, 2002, 12:00am
UPDATED : Saturday, 11 May, 2002, 12:00am

Star TV has announced an exclusive carriage agreement with i-Cable Communications on Star's most important channels, ruling out the possibility of it partnering the pay-TV venture of Television Broadcasts (TVB).

Yesterday's announcement comes at a critical time for TVB, which is deciding whether to go ahead with its pay-TV venture in the hope of a last-minute investment proposal or to scrap the project. The company has delayed announcing its decision from last month to this month.

The decision by Star TV in favour of the incumbent in Hong Kong's pay-TV market was another blow to the three new entrants, including TVB's Galaxy Satellite Broadcasting, analysts said.

Prominent Star TV channels ESPN, Star Sports, National Geographic and Phoenix InfoNews will be exclusively shown to i-Cable's more than 570,000 customers under a multi-year carriage agreement.

Star TV and i-Cable have strengthened their partnership from last August's non-exclusive agreement, which would have allowed Star TV to work with new pay TV licencees Galaxy, British Yes TV and Taiwan-based Pacific Digital Media.

Lehman Brothers analyst Stephen McKeever said: 'It clearly shows that Star TV believes there will be only one dominant player in Hong Kong's pay-TV market.

'The deal will be a coup for I-Cable to maintain [its dominant market position].'

But he believed TVB would seek regulatory relaxation in its compulsory stake disposal and delay its launch schedule.

However i-Cable probably had to pay a higher premium to get exclusive carriage, according to Salomon Smith Barney media analyst Norman Waite.