CTI's Internet unit in pay-TV coup

The future of Hong Kong's pay-TV market was thrown into confusion yesterday after telephone operator City Telecom (CTI) revealed that the government would allow it to offer Internet-based pay-TV services without a broadcast licence.

CTI chairman Ricky Wong Wai-kay said the government's Information Technology and Broadcasting Branch (ITBB) had exempted CTI's Internet business unit, Hong Kong Broadband Network (HKBN), from the licensing requirement, which stipulates that pay-TV operators pay an annual fee of HK$1.37 million plus HK$4 for every subscriber.

According to HKBN, the ITBB granted the exemption because the company's pay-TV service is based on an open Internet platform.

Quoting the Broadcasting Ordinance, the company said that 'services not to be regarded as television programme services' include 'any service provided on the service commonly known as the Internet'.

HKBN hopes to launch its pay-TV service by June, providing up to 180 channels.

An ITBB spokesman said current legislation allowed companies to roll out Internet-based pay-TV services without having to apply for a broadcasting licence.

The spokesman added that HKBN was not the only firm to be exempted from obtaining a licence. 'Hong Kong Broadband is not the only one to provide video content through the Internet,' the spokesman said.