Loss-making Cable TV's monopoly on pay television has been extended for another two years, it was announced yesterday. STAR TV, forced to abandon plans for subscription channels in Cantonese, attacked the decision, saying it contradicted the Government's intention to increase choices for viewers and develop the media industry. The regional broadcaster was reacting to a review of the pay-TV market outlined in a consultation paper which: Recommended no new pay-TV licences be issued until after another review in 1998 because deregulation would increase the losses of sole operator, Wharf Cable; Proposed a compromise by offering two video-on-demand (VOD) programme licences. Bids are expected to come from Hongkong Telecom, which plans to launch its video-over-the-phone service next year and another unspecified operator; Lifted an advertising ban on pay-TV; Disqualified newspaper owners from exercising control over domestic television licences except with permission of the Governor-in-Council; and Resisted lobbying from ATV and TVB to reduce the 10 per cent royalty paid on advertising revenues. The monopoly granted to Cable TV to help it recover the cost of installing its network was due to expire at the end of May. Wharf Cable invested $5 billion in start-up costs for Cable TV, but has attracted fewer than half the subscribers needed to break even. A spokesman said last night the proposals to deregulate the subscription television market were 'appropriately cautious'. STAR spokesman Douglas Gautier said public surveys and the Consumer Council had called for increased choice for viewers. 'The extension of the current pay-TV licence exclusivity runs contrary to that demand and a protection of the existing monopoly,' he said. Recreation and Culture Branch Secretary Chau Tak-hay denied there had been a policy U-turn. 'We are enhancing competition by offering two VOD programme service licences later this year if Legco approves,' he said. The review said consultants had found video-on-demand would be competing in the same market as pay-TV and deregulation would prevent Cable from breaking even before its licence expired in 2005. Democrat legislator Andrew Cheng Kar-foo said the decision was made because the Government did not want to issue more licences for fear of upsetting China. Mr Chau denied this was so. Editorial - Page 22 A threat to English-language programmes on TVB Pearl and ATV World was averted when the Government rejected calls to raise limits on shows in other languages. It said that programmes in English contributed to Hong Kong's 'international dimension' and appealed to large sections of the population.