Venture jeopardized by failed takeover bid
HONG KONG — Star TV’s commitment to a joint venture with Cable & Wireless HKT appears to be wavering.
In a statement issued Monday, Star referred to the previously undisclosed fact that the agreement with the telco to launch a pay TV and broadband service in Hong Kong is due to expire June 30.
A spokesman said, “The June 30 date is not a factor in our decision-making process. At this stage, we are still working with our partner to develop an acceptable business plan.
“While we remain bullish about the future of the pay TV service, we do have increased concerns about the viability of some of the Internet businesses. The cost of operating these businesses using the CWHKT infrastructure is much higher than anticipated, and the lack of subscriber growth on the iTV side is particularly unsettling.
“As a result, we have not approved any final plans to move forward.”
Star’s joint venture with HKT was thrown into doubt after its takeover bid for the company, made jointly with Singapore Telecommunications, was trumped by Richard Li’s Pacific Century CyberWorks.
Li, a Hong Kong billionaire who founded Star TV, has an uneasy relationship with News Corp. chairman Rupert Murdoch.
Under the initial agreement with HKT, Star was supposed to provide 50 channels and to collaborate on Internet services. HKT and Star jointly applied for a pay TV license that is expected to be approved by the H.K. authorities next month.
Last week Star TV acting CEO Bruce Churchill told Daily Variety that while the company remains committed to building a business in the Hong Kong market, the change of ownership of HKT makes the joint venture “a little bit uncertain.”