Network rivalry talk scotched
(08/01/2001) (China Daily)

China's TV broadcasting sector will focus on internal reform this year instead of fierce competition with telecom companies.

Zhang Haitao, deputy director of the State Administration of Radio, Film and Television (SARFT), refuted claims that the sectors were set to go head to head.

It was the official's first response to a speech by his counterpart at the Ministry of Information Industry (MII), Zhang Chunjiang, who said telecom and broadcasting sectors could enter each other's business field.

MII official's speech ignited a hot market response with most broadcasting-related stocks rising significantly.

But the silence of SARFT made people quickly realize that the two sectors could not operate each other's business in the short term.

"Technically, there is no problem because the broadcasting sector has rented the network of telecom companies to transmit TV programmes for quite some time,'' said Zhang Haitao, who recently visited remote villages as part of a project entitled "Every Village Links to Cable TV.''

However, the broadcasting sector is strictly prohibited from opening to other sectors and overseas operators, the official said.

"Even in the articles of the World Trade Organization, broadcasting is not included in the sectors that must be opened to other domestic or foreign companies to operate,'' he said.

The SARFT is moving ahead with plans for a nationwide broadcasting transmission company which is widely regarded as the country's coming eighth basic telecom operator.

"This transmission company will mainly reunite the broadcasting power of separated regional firms to upgrade the sector's capability as a whole,'' he said. "Its targets are not telecom companies.''

Whether the company would get the basic telecom licence is down to the MII, he said.

But he claimed not to be worried as the potential of the entertainment market is huge.

"The entertainment market is at least as big as, if not bigger, than the telecom market,'' he said.

The country's TV stations broadcast more than 1 million hours of TV programmes yearly, including more than 3,000 films and 10,000 TV plays.

But that is not enough as people complain that different channels are broadcasting the same popular TV play.

"There is no need to start severe competition with the telecom companies as there is still a lot to be done in the broadcasting sector,'' said Zhang.

Transforming the broadcasting network into a telecom network will be a very capital-intensive project.

At least 100 billion yuan (US$12 billion) has to be invested in the network construction for that to happen, according to the official.

The result would be network duplication and a waste of transmission capacity, Zhang said.

After years of operation, telecom operators, especially China Telecom, have accumulated rich experience, making it unlikely the broadcasting sector could compete.

"The broadcasting sector should turn the eyes back inside itself,'' Zhang said.

China has become the biggest broadcasting market in the world with more than 90 million cable TV subscribers, 350 million TV sets and 500 million radios.

"China's broadcasting network is the most popular device for spreading information,'' he said.

There are also related media reports recently that the SARFT would be merged with the MII, but Zhang denied the rumour.

(China Daily by Hou Mingjuan)

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