Hong Kong firm to establish China’s first satellite-based mobile broadcasting service

Hong Kong-listed CMMB Vision Holdings has formed a joint venture with a state-controlled company to establish China’s first satellite-based mobile broadcasting service, an enterprise that could be bigger than the operations of Sirius XM in North America.

The venture with Global Broadcasting Media, a company owned by state broadcaster China Radio International, will offer bundled radio, video and internet data services, as well as precision navigation, to hundreds of millions of potential subscribers in the world’s biggest car market by sales.

“The company will be the first mover in China to offer enhanced DARS (digital-audio radio service), with more advanced technology and in a much larger market,” CMMB Vision chairman and chief executive Charles Wong Chau-chi said in a regulatory filing.

The service can be received by portable or built-in transmitting devices in a car. It can be retransmitted via Wi-fi to other smart mobile devices nearby.

Wong said in-car media and entertainment spending on the mainland was forecast to reach US$37 billion by 2019.

New York-based Sirius XM is currently the world’s most renowned DARS provider, with 29.6 million subscribers across the United States and Canada. It is also the world’s largest broadcaster by revenue, posting US$4.2 billion in 2014.

Wong said the strategic cooperation with Global Broadcasting Media would enable the delivery of satellite-based mobile broadcasting with “unprecedented high-quality, low-cost and ubiquitous coverage” in China and later, the “One Belt, One Road” countries in Asia.

That will be made possible with the mainland-developed multicast technology known as Converged Mobile Multimedia Broadcasting, which CMMB Vision has long been promoting.

Its CMMB mobile handheld television service, which was launched during the 2008 Beijing Olympics, is now available in more than 350 cities nationwide.

CMMB Vision last Friday agreed to transfer 51 per cent of its equity interest in a subsidiary, GMG-CMMB Media Technology, to Global Broadcasting Media for a token consideration of 1 yuan. That subsidiary will serve as the joint venture vehicle of the two companies.

According to Wong, the nominal fee for that equity transfer deal was primarily based on Global Broadcasting Media’s ability and commitment to obtain the relevant licenses and approvals on the mainland.

CMMB Vision, which posted an interim loss of US$3.86 million last year, has pursued strategic initiatives over the past several months which paved the way for its new joint venture.

In October, the company acquired the exclusive user rights for the AsiaStar L-band spectrum satellite and other related assets from New York Satellite Holdings.

That was followed by a partnership with China Satellite Mobile Media to jointly operate mobile multimedia and data delivery service on the mainland based on the company’s AsiaStar satellite.

Late last year, CMMB Vision forged a deal with Boeing to start construction of its advanced new L-band satellite named “Silkwave-1”.