Cable TV slams rule anomaly
Wharf (Holdings)-owned Cable TV hit out yesterday at an 'anomaly' which it says prevents it setting up a video-on-demand (VOD) service similar to that planned by Hongkong Telecom that it tried to block.
Its comments followed a Recreation and Culture Branch review of pay-television which recommended no further cable licences be issued for the time being because of Cable TV's difficulties in breaking even.
However, the review recommends licences be issued for two VOD operators.
The review effectively extended Cable TV's exclusivity in the cable television market until 1998 but also proposed excluding television licensees such as Cable TV from running VOD services to prevent them dominating the industry.
Cable TV sees a situation where it has to compete with the VOD services but is prevented from operating one itself.
Managing director Stephen Ng Tin-hoi said the new technology, which allows viewers to order the playing of movies and programmes over telephone lines, was a logical extension for his company's service.
Wharf would have a synergy through its ownership of Cable TV, which is laying a fibre-optic cable network, and telephone company New T&T.
Hongkong Telecom, which has encountered a 12-month setback in developing its VOD system, is expected to apply for one of the licences.
Wharf Cable's application for the High Court to order that VOD be governed like other television services, which could have blocked Hongkong Telecom, was rejected last week.
Mr Ng said he understood Cable TV was disqualified from applying for a VOD licence because it was licensed under the Television Ordinance.
This was an anomaly because other companies in the television business which were licensed under other ordinances were allowed to apply for a pay licence.
He did not name any company but it is understood he was referring to Star TV, which is a satellite broadcaster licensed under telecommunications ordinances.
Mr Ng said Cable TV did not operate a monopoly because pay-television was only 'a small subset of the total TV picture'.
He said the company, which has come under fire from analysts because of its performance, had about 200,000 subscribers and had enjoyed higher net subscriptions over the past half-year of 10,000 a month.
The rate of subscribers cutting off the service had dropped to 2 per cent per month compared with 4 per cent per month 12 months earlier, he said.
Cable TV, which last week reported an $825 million loss for last year, expected to 'cross the break-even line on a month-to-month basis' by the end of 1997.
