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China Mobile Drawn Into TV Dispute

It's years since the global telecom industry all but gave up on mobile TV, but it's now at the center of the Hong Kong squabble over TV licensing.

China Mobile Ltd. has announced it will conduct an internal inquiry into the sale of its mobile TV subsidiary UTV to Ricky Wong's HKTV for HK$142 million (US$18.3 million). The operator noted in a brief statement issued Sunday that the sale, which was completed in December, may have breached the rules governing China's state-owned companies and its own internal management processes.

Charles Mok, who represents the IT sector in the territory legislature, expressed surprise at the move and tweeted that it seemed that Beijing authorities were "deliberately obstructing" the deal.

In a statement from HKTV, Wong said the deal "was completed on December 20, and the company does not anticipate any circumstance that may cause any kind of change."

Wong, who founded all-fiber fixed broadband service provider Hong Kong Broadband Network Ltd. (HKBN) , decided to take the plunge into mobile and Internet TV after being rejected for a free-to-air TV license in October. (See Fresh Licensing Storm Hits Hong Kong.)

The government decision to award licenses instead to incumbent pay-TV operators PCCW and Wharf Cable actually sent Hong Kong people onto the streets, with many seeing in this evidence of bias toward large conglomerates and the interfering hand of Beijing. Wong says the government had invited him to apply because it wanted to improve competition, and it had promised that all those who applied for a license would be granted one.

Just before Christmas, however, he said he had decided to go the OTT route to market, announcing an Internet-based TV service with five channels and acquiring UTV, a mobile TV business owned by China Mobile's Hong Kong subsidiary and launched in December 2012.

The UTV service is available to all mobile users regardless of their operator, using its own infrastructure based on China's CMMB standard. Users must buy a plug-in device to view the content, however.

The UTV acquisition won the approval of Hong Kong's telecoms and broadcasting regulator, Ofca, which last week said it did not limit competition in telecom markets.

Separately, HKTV today also filed an application for a judicial review of the decision to reject the free-to-air license on the grounds that it was in breach of the government's own policy.

— Robert Clark, contributing editor, special to Light Reading

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