Body moots na­tional cable net­work

Plan mulls be­he­moth by 2020-end through grad­ual in­te­gra­tion of provin­cial TV play­ers

China Daily (Hong Kong) - - BUSINESS - By WU YIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

China plans to launch a coun­try­wide cable tele­vi­sion net­work by in­te­grat­ing ex­ist­ing listed lo­cal net­works into one public com­pany by the end of 2020, said a gov­ern­ment cir­cu­lar posted on­line on Fri­day.

In re­sponse, stocks of six A-share com­pa­nies en­gaged in cable tele­vi­sion, among oth­ers, rose some 1 per­cent.

There are an es­ti­mated 30 lo­cal cable TV net­works in China, six of which be­long to listed com­pa­nies that are also en­gaged in other busi­nesses.

While con­tent cre­ators could ex­pect huge na­tion­wide au­di­ences, view­ers would be able to ac­cess a wider range of shows. For ex­am­ple, view­ers in Bei­jing could watch Shang­hai cable TV, said an­a­lysts.

They fur­ther said more de­tails of the plan, when­ever they are made avail­able, may well ben­e­fit the en­tire sec­tor, espe­cially those seg­ments in­volved in the cre­ation of cable net­work in­fra­struc­ture.

Even­tu­ally, in­vestor sen­ti­ment to­ward cable stocks may also im­prove.

The cir­cu­lar was posted on an of­fi­cial WeChat ac­count of the Acad­emy of Broad­cast­ing Plan­ning. It cited guide­lines from the State Ad­min­is­tra­tion of Press, Pub­li­ca­tion, Ra­dio, Film and Tele­vi­sion, and said the plan aims to con­sol­i­date provin­cial cable tele­vi­sion net­work re­sources and im­prove in­te­gra­tion of cable tele­vi­sion and in­ter­net net­works.

The plan said that by the end of the 13th Five-Year Plan (2016-20), in­te­gra­tion of State-owned cable tele­vi­sion net­works shall be “ap­proxi- mately com­pleted”.

The in­te­grated cable tele­vi­sion com­pany will have China Broad­cast­ing Net­work Ltd as the ma­jor share­holder, and provin­cial cable tele­vi­sion net­works as joint share­hold­ers.

The com­pany will run on a par­ent-sub­sidiary struc­ture in the form of a na­tional cor­po­ra­tion with a coun­try­wide net­work.

The es­tab­lish­ment and fund­ing of the new com­pany will be in two phases, the guide­line said.

In the first phase, CBN will use its shares in provin­cial net­works, as­sets in na­tional broad­cast­ing and tele­vi­sion cable grids, and cash to fund its stake in the new com­pany.

Share­hold­ers of un­listed provin­cial cable tele­vi­sion net­works will pick up a col­lec­tive stake of no less than 51 per­cent in the new com­pany.

In the sec­ond phase, the public list­ing of the new en­tity will be pushed for­ward through eq­uity re­place­ment and merger, after in­te­gra­tion of ex­ist­ing listed cable tele­vi­sion com­pa­nies, the guide­line said.

The guide­line, how­ever, did not spec­ify which ex­ist­ing com­pa­nies will be in­volved in the plan, or a de­tailed time frame for the in­te­gra­tion process.

Xu Chun, an­a­lyst with Chang jiang Se­cu­ri­ties, said in a re­search note that a Chi­naw­ide net­work would com­pel mar­ket play­ers to ex­pand and mod­ern­ize their dis­tri­bu­tion chan­nels

China’s broad­cast sec­tor, which spans news, in­for­ma­tion, ed­u­ca­tion, cul­ture and en­ter­tain­ment, has been un­der­go­ing re­forms in re­cent years, to meet the chang­ing viewer de­mand for value-added con­tent.

num­ber of lo­cal cable TV net­works in China

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