China on Tuesday said it intends to consolidate radio and television networks under a single national cable television network company.
The State Administration of Radio, Film and Television (SARFT) said the new company will come up by the end of the year and will further expand into new businesses like mobile TV and online videos.
A showcase of future national cable TV network during 19th Beijing International Radio, Film and Television Exhibition held on August 23, 2010. The country intends to consolidate radio and television networks under a single national cable television network company.
"The nation's radio and television networks need to be consolidated under one roof as currently they are individually run and have not developed into large-scale entities," said Tao Shiming, director of the SARFT's society administration bureau.
At present, there are 1,000 radio and television networks in China, and are run by different operators at varied administrative levels. The absence of a nationwide and unified network comes in the way of their plan to compete with others for the opportunities that arise from the convergence of technologies, said industry experts.
Tao said the consolidation exercise is likely to start at the provincial level by the end of this year and culminate in nationwide consolidation later.
"All networks in the nation are likely to be integrated in three years," said Zeng Huiming, deputy secretary-general of the cable TV committee of the China Radio and Television Association.
Earlier reports said the new consolidated company will have a start-up investment of around 80 billion yuan ($11.8 billion), with contributions coming from both the government and broadcast and television companies.
Zeng said the investment modalities and consolidation plans are still being discussed by the SARFT.
Though the SARFT insists that the move would create huge opportunities for the networks, analysts said that it would not be an easy task to achieve.
Xiang Ligang, a leading telecom expert, said he was not sure of what the returns would be from the whole exercise.
"It's hard to earn profits if the new company offers lower prices. But at the same time it is also hard to win more users if it charges high fees," said Xiang, adding that the three telecom operators, which have invested over 2 trillion yuan on telecom networks, will still have an advantage in the market.
The government last month launched a pilot project in 12 cities to test the convergence of the three networks. The trials are expected to last till 2012 and will focus on connecting the broadcasting and telecom networks.
