Television Broadcasts (TVB) has scrapped plans to launch its pay-TV project, according to sources inside the company.
The decision by Hong Kong's dominant free-to-air broadcaster to drop plans to roll out the HK$5 billion Galaxy Satellite Broadcasting project is the latest in a series of blows to hit the Government's plans to liberalise the pay-TV market.
TVB board members led by Sir Run Run Shaw blamed a lack of interest from other investors and the regulatory framework, with the rules described as 'harsh', for their decision not to go ahead, according to sources.
The company would formally announce the cancellation this month and expected to have to pay a penalty as part of its HK$88 million performance bond.
Under government rules, TVB had to find investors to take a 50 per cent stake in Galaxy by June because of worries about TVB's dominance in Hong Kong's television market. The Government also delayed TVB's entry into the market by 18 months to give others a chance to establish a presence.
Publicly the company still says it is actively pursuing investors to enable it to roll out the project.