China Telecom plan to provide content direct to homes challenges cable operators China Telecom is preparing to launch a broadband television platform, undertaking moves that could threaten the nation's established cable-television operators. The fixed-line giant has teamed up with Shanghai Cultural and Broadcasting Media Group - one of three companies licensed to provide internet protocol television (IPTV) in China. They will develop services across the 21 provinces in which China Telecom operates. According to China Telecom chairman and chief executive Wang Xiaochu, trials to gauge viewing habits have been launched in Shanghai, Guangzhou and Shenzhen, involving about 10,000 subscribers. The effort puts China Telecom one step ahead of rival China Network Communications Group (Netcom), which is planning a content joint venture with PCCW, the operator of Hong Kong's NOW Broadband. With the mainland's personal computer penetration rate at just 2 per cent, Mr Wang sees a far larger audience for internet television if services are marketed directly to set owners. China Telecom has partnered with set-top box manufacturers such as Sichuan Changhong Electric to produce decoders and televisions that are internet ready. 'Currently, we have 13.7 million broadband users. If we can turn 20 per cent of China's 300 million TV homes into broadband TV users, that would be a very significant piece of business for us,' Mr Wang said. About 80 per cent of China Telecom's fixed-line network is broadband enabled. Marginal additional investment is needed to upgrade the network for broadband television services. 'Once Sichuan Changhong's TV set is in the market by May, people can simply plug their phone line into the TV to enjoy our services,' said Mr Wang. But luring viewers away from cable-television will be a challenge. The key to doing so will be content and compelling programming. '[IPTV] is an incremental value to the fixed-line service,' Media Partners Asia executive director Vivek Couto said. 'Whether it is successful or not depends only on the content offering.' China Telecom intends to adopt a model similar to that of China Mobile, which charges content providers about 15 per cent of revenue for access to its platform. This arrangement has led to a proliferation of content services in the mobile arena. 'Content is king,' said Mr Wang. 'People will subscribe for the services only if there is attractive content.'