Wharf Cable, a newcomer to the world of TV, is almost certain to be a shoo-in for Hong Kong’s exclusive cable TV license, per a top government official.
Secretary for recreation and culture James So Yiu-cho said that when tenders closed recently, Wharf’s bid was the only one received that “in broad terms fulfills all the requirements set down by the policy guidelines.”
Other declared contenders, such as HutchVision (which is affiliated with Star TV) and Canadian cable mogul Ted Rogers unexpectedly and unexplainedly declined to bid.
That left Wharf with a clear path to the license for construction of the largest cable TV system in the world, serving about 1.5 million TV homes.
For the cable license, Wharf is already conferring with the government on minor programming and technical details, and is confident enough to have already begun work on its $ HK6 billion ($ 776 million) project.
The award is expected to be made by Christmas.
Wharf Cable managing director Stephen Ng said the company has spent over $ HK 100 million ($ 12.9 million) in the last six weeks, commissioning architects and designers for production and broadcasting facilities and purchases of microwave equipment.
Even though the company has not yet received an official go-ahead, Ng said it was important to make progress in critical areas in order to be operational within six to nine months of the license award.
Under the license terms, Wharf will have to carry programming from the pan-Asian-oriented STAR-TV, among others. In addition, Wharf will serve the local market and will buy from local suppliers.
Local terrestrial stations ATV and TVB are likely to feel the impact of the start-up of cable in Hong Kong most strongly.
To help them brace for the upcoming competition, the government has authorized concessions to them, including reduced royalty fees and a green light for broadcasts in other languages.
Wharf Holdings, which boasts more than 100 years of experience in the colony, began as a shipping and property development company but also sees great potential in the telco industry.
It teamed up with Nynex earlier this year in a bid to become Hong Kong’s fourth cellular phone operator.
As of March 31, 1991, it had assets of $ HK31.4 billion ($ 4.1 billion), 90% of which is invested in the colony.
In March last year Wharf bought 75% of local company Rediffusion, which is involved in TV distribution, telecommunications, program supply and associated businesses.
Wharf Holdings was part of Hong Kong’s first attempt at cable TV, in 1989, the Hong Kong Cable Communications (HKCC) consortium.
HKCC handed back its 15-year franchise after disagreements between the partners and a rumored tiff with the government over its failure to guarantee the consortium the right to use the expensive fiber-optic cable web it was obliged to build under the terms of its license. The consortium never actually laid a fiber-optic network.
Wharf still has its eyes on a telecommunications net that would give it the infrastructure for a move into southern China, as it proposes a microwave distribution system in the short term, to be replaced gradually by fiber optics.
The Hong Kong government warned that if the sole cable bid is not ultimately acceptable, it will throw the market open to a range of mini-cable operators.