Set-top box maker eyes value-added services

PUBLISHED : Friday, 01 July, 2005, 12:00am
UPDATED : Friday, 01 July, 2005, 12:00am

DVN (Holdings), a set-top box design company backed by Motorola, is looking to new interactive services to stem five years of losses, according to president Terry Lui Pan.

After the company's annual meeting yesterday, Mr Lui said until now DVN had been relying on the sale of set-top boxes for most of its revenue.

However, from the fourth quarter this year, it would launch value-added services, such as interactive advertising and gaming, on its set-top box platform to attract new customers, he said.

'The services are being tried in Qingdao and Foshan. We will launch them in collaboration with cable television operators by the fourth quarter,' Mr Lui said. 'We have been in the set-top box business for five years and value-added service business has provided us with [new growth] opportunities.'

DVN, in which Motorola had invested US$15 million for a 20 per cent stake, designs digital set-top boxes for original equipment manufacturers who pay software licence fees. Last year, set-top boxes accounted for 67 per cent of its $169.24 million revenue.

The firm also designs and installs digital broadcasting systems for Chinese cable television operators. The State Administration for Radio, Film and Television (Sarft) has directed mainland cable television operators to upgrade their analogue broadcasting networks to digital.

Under Sarft's timetable, the 2008 Beijing Olympics are scheduled to be aired on digital networks, while the country will cease analogue transmissions by 2015.

DVN's role in the digitalisation pilot programme in Qingdao and Foshan involves supplying set-top boxes to state-subsidised cable television network operators which buy the devices and distribute them free.

Last month, DVN signed a contract with Guangxi Broadcasting and Television Info-Network to help the operator build its digital television platform and design three million set-top boxes for the provinces. Other services such as television short messaging will also be launched there.

Mr Lui said the company was talking with other cable television operators in other provinces and key cities on becoming their exclusive partner for digitalisation.

DVN made a net loss of $59.73 million last year, down from $140.07 million in 2003.