Agreement with Chunghwa marks biggest business for HK operator's internet protocol television service PCCW has agreed to export its self-developed internet protocol television (IPTV) platform to Taiwan's largest fixed-line operator in what would be the biggest deal so far for the company's pay-television technology. Chunghwa Telecom signed a memorandum of understanding with PCCW to deploy its NOW Broadband TV infrastructure on the island, Taiwan's dominant telephone company said. Chunghwa has a small self-developed IPTV operation but it has been floundering, in part due to its instability. It is also more expensive to scale up than PCCW's. A PCCW spokesperson declined to comment. 'In the first step, PCCW would help Chunghwa on the infrastructure side and then maybe on channel sourcing,' a source close to the alliance said. Chunghwa might want PCCW's aid in sourcing foreign television channels because that has been something it has also struggled to do for its current pay-television service, which has failed make a major dent on Taiwan's hyper-competitive pay-television market. The Chunghwa service, launched last year, now offers 33 mostly local channels to 192,000 subscribers. PCCW's NOW, which was launched over its fixed-line network in 2003, has more than 500,000 users and has gained exclusive rights to show HBO, ESPN and other international channels in Hong Kong. The success of its IPTV technology was one of the major attractions for foreign firms that had earlier this year put in bids to buy out its assets. Large phone companies around the world have tried to build similar IPTV networks but so far none has matched PCCW's success. Chunghwa said it was especially eager to make the most of PCCW's relationship with Rupert Murdoch's Star Group. NOW carries 17 Star channels and earlier this year PCCW signed a development alliance with Star to explore new IPTV opportunities in the region. A source said that Chunghwa had initially planned to adopt the PCCW platform when NOW made its debut in Hong Kong before changing tack and developing its own fixed-line platform. Another hurdle the Taiwan outfit faces is the uncertainty over how far regulators there will allow the dominant phone company to expand into a new media. 'PCCW can share their experience in overcoming regulatory hindrance,' the source said. The company already licensed the platform to minor operators in Thailand, the Ukraine, Serbia and Morocco this year, but the contract with Chunghwa would by far be the largest. PCCW also wants to take the IPTV platform to the mainland. The company has applied in the first quarter take a 50 per cent stake in two broadband service providers in Hanzhou and Ningbo owned by China Netcom, which has a 20 per cent interest in PCCW. The application is still waiting for approval from the State-owned Assets Supervision and Administration Commission. PCCW expects to clear the hurdle by year-end.