Hong Kong Cable Television, facing the local broadcasting might of TVB and the combined forces of Star Television and Cable & Wireless HKT, has it all to play for. A few days after television providers had queued up to break its monopoly of pay television, the cable company took action to ensure it won't be forgotten when the revolution in home entertainment arrives in our living rooms next year. It announced it had bought exclusive rights to the 2002 World Cup. The convergence of television and telecommunications is on its way, when viewers will be able to flick between dozens of digital television and radio channels, order videos on demand, surf the Internet at 30 to 40 times the current speed and do their shopping, all from one remote control. Hong Kong Cable, which has enjoyed a monopoly of pay television for six years, needed a major marketing coup like the World Cup, the most popular sporting event in soccer-mad Hong Kong. 'This will be a boost for Cable in face of new competition. We have to stay ahead,' said Musseta Wu, Cable's controller of programming and promotions. The two terrestrial channels, TVB and ATV, were the first to cry foul, given the huge public interest in the tournament that will be held for the first time in this time zone and the fact that only a minority of people have so far chosen to subscribe to the Cable service. Ann Chow Wai-yee, ATV's media relations manager, said: 'We think this is a loss for Hong Kong citizens. In England, Australia and other countries the rules are that the main sports should be shown free of charge. ATV regrets that Hong Kong does not have this rule. We hope that in the coming three years there will be a change.' Winnie Ho Wai-sheung, TVB's corporate and community relations manager, agreed: 'The people most disappointed will be the soccer fans,' she said. 'Even if they are willing to pay for Cable, many may not have access to it.' The Government has no plans to intervene. Eva Chung, deputy secretary of the Information Technology and Broadcasting Bureau, said: 'We recognise this is a commercial deal and that they have not contravened any prohibitions under the existing regime. We have not reached the stage where we can define certain events as of national interest. We don't think that is necessary for Hong Kong.' Cable won't reveal how much it paid to win the cup, although it is understood to be between US$10 million (HK$770 million) and US$15 million. But Ms Wu said it was not just dollars that counted. 'We had to show them our ability in programming, technology, promotion and public access,' she said. Cable spent a year negotiating with ISL Limited, a company handling the rights in association with soccer's world governing body FIFA. Previously, they went to the Asian Broadcasting Union, of which both TVB and ATV are members, with the event shown on both channels. Ms Wu offered the consolation that Cable was ready to talk with ATV and TVB about some form of terrestrial coverage, but so far there had been no approaches. Cable promises to show the World Cup as never seen before, broadcast on multiple channels with viewers not only able to chose languages, but the angle from which they want to watch a match, or a particular player to follow. Sports viewing is on the verge of technological revolution. At issue, though, is how many people will be tuning in at all. 'In reality and theory 90 per cent of households in Hong Kong can be cable connected,' said Ms Wu. 'There are three years between now and the World Cup. We can't say we'll be 100 per cent by then, but close to it. Even ATV and TVB can't claim 100 per cent.' By then, its fibre optic network that currently covers 50 per cent of its viewers will be complete. But of those 1.6 million who are 'cable ready', only 440,000 households have signed up so far. Ms Wu dismisses arguments that the World Cup should be carried live on free television. 'The world is changing every day. Nothing is eternal,' she said. 'There is now a trend in the United States and United Kingdom that you have to pay to see major sporting events. But we do guarantee that the World Cup will be in the basic package. We will try our best to make sure that everyone in Hong Kong can see it.' For instance, public viewings are planned for those who can't receive the service. To get the World Cup viewers must not only buy the Cable service at a cost of $270 a month at today's prices but choose it in addition to a new generation of digital pay television platforms. The Government's Information Technology and Broadcasting Bureau is evaluating 10 applications for new pay TV licences, with successful applicants receiving their licences early next year. With its new 'open sky' policy, it has set no limit on the number. The invitation follows the 1998 Review Of Television Policy in which the Government set out its plans to liberalise the market and facilitate the technological revolution, with the intention of giving consumers new choice, quality programming and competitive prices in their home entertainment. 'The main thing behind this is the convergence of television and telecommunications technology,' said Ms Chung. All applications are to operate pay television services. No one took up the opportunity to compete with TVB and ATV in the free television market. 'The new entrants are a distinct threat to Cable. The objective is to break up their monopoly which has been going on too long,' said industry observer Simon Twiston Davies, chief executive of Kagan Asia Media. TVB has applied for a pay-TV licence through its wholly owned subsidiary, Galaxy Satellite Broadcasting Limited, which plans to carry up to 32 channels in its basic package and more on a pay-per-view basis. Like Star and Cable & Wireless, it will also offer a broadband Internet service 30 to 40 times faster than current narrow-band dial-up systems and a string of CD-quality radio channels. 'The line-up will be quite similar to other pay television platforms, but there will be more Cantonese programming,' said Mr Stanley Tang See-tin, Galaxy's general manager. Galaxy would have three Cantonese channels provided by TVB, including a 24-hour news channel, drama and children's television. Two Galaxy channels would carry regional broadcasting in Mandarin. TVB Jade and Pearl would also be included, in new digital format. 'We are now talking with international channels to provide another eight to 10 channels, including news, sports, shopping, documentaries and movies. We're also talking about launching an arts and culture channel,' he said. So far, it is saying no to adult movies. Galaxy would get to our television sets via satellite and in-building cables and could be on air within nine months of receiving a licence. 'The satellite signal is already available,' said Mr Tang. Other technology had been developed for its Taiwan market where it operates a pay-TV service. Star and Cable & Wireless' as-yet-unnamed joint venture could reach our homes via satellite or Cable & Wireless' broadband network within three months of receiving a licence. Daniel Cheung Chun-on, managing director of Star's DTV, said: 'This is definitely a breakthrough in home entertainment.' From one programming guide and control system, viewers will be able to watch local or international television, order videos on demand, shop or surf the Internet. Viewers will be offered up to 50 television channels in different languages and with movie channels drawing on the libraries of Disney, MGM, Fox, Golden Harvest and Golden Princess. The BBC was also likely to return to the Star platform, said Mr Cheung. ATV appears to be staying on the pay-TV side-lines. Ms Chow said its current strategy was to concentrate its manpower on its two free-to-air channels. Other licence applicants include Pacific Digital Media, a Taiwan broadcaster with links with French television. It provides a 'Direct Home Service', reaching audiences via pizza-size dishes which can be fixed to balconies or windows. In Taiwan, Pacific offers about 20 channels, mostly in Mandarin. Some applicants, like local film producer Mei Ah Entertainment Group, plan to piggy-back niche channels on other services. Turner Broadcasting, which owns CNNI, the TNT classic movie channel and the Cartoon Network, all available on Cable, has also applied. But a spokesperson said that it had no plans to offer its own pay-TV service and had applied to keep its options open. Beyond the World Cup, Cable would meet the new competition by continuing to focus on movies, news and sports, said Ms Wu. Four years ago it had just 15 channels. That has now grown to 35, with the 36th due to be launched later this month. This will be called Channel A, designed to compete with TVB Jade, with a mix of news, movies, sport and mini-series. Major sporting events are a key to drawing subscribers to pay-TV, but the company readily admits adult movies are its other major attraction. Star's Mr Cheung said that its platform was also ready to meet this adult demand, with parental locks to protect children. Against Cable's Channel A, sex and the World Cup, the new pay services will have the attraction of being digital from the start, resulting in CD quality sound and superior pictures. Ms Wu said Cable would joint the digital revolution, but as yet it has no timetable for change. It will, though, be matching the competition with a broadband Internet service, which it plans to launch next year. It has already submitted an application for a fixed telecommunications network services licence. ATV and TVB's terrestrial television, due to go digital by the time the next World Cup kicks off, will face an unprecedented challenge from the convergence revolution. But Mr Twiston Davies believes that they will survive the onslaught. 'Pay television has not made the impact on viewerships that the providers claim,' he said. 'Free television throughout the world always manages to hang on as the simple entertainment choice for most people when they come home in the evenings.' But that could change if the new providers upgrade the range and quality of their local and international programming, with the new multi-media element an added attraction. 'If you have a must-have product which is as good or better than the terrestrials it is going to have an impact,' he said.