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The Group, through its wholly owned
subsidiary, is the sole contractor and operator of digital television
(the ¡§DTV¡¨) services in Nanhai, a city in the Guangdong province
of China. The city has around 410,000 paying Cable TV subscribers
who used to watch television program through analogy signals. The
subscriber base represents more than 95% of penetration in the city.
Today, Terrestrial TV broadcast in China are controlled or limited.
Basically, all TV channels must go through the Cable because of
content control issues.
The Group is responsible to migrate
all subscribers from analogue to digital broadcasting system as
well as operating its own pay-TV and interactive services based
on the DTV technology. The services require subscribers to install
a digital set-top-box("STB") which enables the operator
to provide multiple tiers of pay-TV or interactive services aggregate
up to 800 TV channels of varies type of content. The Group is currently
offering 48 basic channels and 100 pay channels. The annual subscription
fee for basic channels is about US$ 25. The pay channels are categorized
into eight value added packages, namely ¡§World Movies¡¨, ¡§Life &
Leisure¡¨, ¡§World Sports¡¨, ¡§Drama¡¨, etc. The annual subscription
fees for the value added packages are ranged from US$ 15 to US$
74. The Group also offers service for subscribing additional set-top-box
where subscriber can buy from the company and set up an additional
set-top-box in their study room, kitchen and bed room.
The Group has around 180 staffs
supporting the operations of Cable TV services in Nanhai. Their
responsibility includes planning, marketing, sales, customer service,
billing, application software development, administration and finance.
Nanhai Radio and Television Network Company, our co-operation counterpart,
retains the administration and management of the broadcasting system
and the Hybrid Fiber-optic network as well as the compliance of
national content broadcasting policy.
Since commencing the system migration
in early 2004, more than 200,000 subscribers have migrated from
analogue signal to digital broadcasting system. For two years of
DTV operation, more than 20% of the DTV subscribers are subscribing
the value added packages and hiring the additional set-top-box.
The Group is also offering a free of charge information service.
A TV viewer can access the service using an embedded web browser
in the Set-Top-Box.
In May 2005, the Group launches
the ¡§Sunshine e-Government Service¡§ together with the Nanhai Radio
and Television Network Company in Nanhai. ¡§Sunshine e-Government
Service¡¨ is the first information service provided through the DTV
data broadcasting platform. With a simple click using a remote control
of the digital set-top-box provided by the Group, TV viewers can
access various kinds of government announcement and information
including:
- Government structure and government
policy
- Social affairs information and social
communications
- Public announcement and government-to-citizen
procedures
In May 2006, the Company
has deployed an IP (Internet Protocol) based STB which is integrated
with new middleware applications, JAVA Runtime, XML browser, which
is developed by Arable Media Limited, a software developer specialised
in middleware products and applications for digital TV STB and broadcasting
technologies. The advanced set-top-box will enable the Company to
provide additional value added services which can be deployed in
the future according to a business plan of the Company; such as
targeted advertising, interactive TV programs, online shopping and
console games, as well as interactive education services.
In May 2006, the Company commercially launched a
high definition TV broadcasts, providing dramatically improved resolution
and sound quality, in which 3 high definition TV channels are packaged
in our pay-TV programs. The Company is currently negotiating partnerships
with various vendors to provide interactive services, transforming
a television set into an interactive multimedia platform.
Nanhai is the first model
city in China to implement Total Migration of Digital Television
by joining professional management and funding source from the market.
We had demonstrated a successful model of win-win-win situation
for the state owned Nanhai Radio and Television Network Company,
the TV viewers in the city and the investors which are ourselves.
We intend to duplicate this successful model and seek co-operation
with cable network companies in other cities of China.
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