Price caps keeping companies from digital surge

HONG KONG — The sluggish uptake of digital TV in Taiwan could be reversed if the government took the leash off cablers’ growth.

That is according to a report by Taiwan’s Cable Broadband Institute and Hong Kong-based research house Media Partners Asia. 

While Taiwanese companies are among the world’s leading manufacturers of digital equipment, the territory’s own digital take-up has been slow.

The big three cablers — Eastern Multi Media, China Network, Taiwan Broadband Communications — have an 80% penetration for analog cable in TV homes. But only 7% subscribe to digital TV.

Broadband Digital Convergence: The Role of Cable in Taiwan says the cablers could drive digital TV penetration to 80% by 2013.

“This transition could unlock $4 billion in economic impact by 2013, with benefits to employment; content creation; infrastructural investment; and consumer competition and choice,” the report said.

But there’s little incentive for cablers to push digital TV in what they feel is an over-regulated sector, which includes price caps.

Report recommends flexibility on pricing and distribution of cable TV programming and a level playing field for competition with no limits on cable coverage and market share.

Fifteen years ago Taiwan’s cable TV sector was more competitive and more fragmented than today with five licenses granted in each region. But mergers replaced that system with an oligopoly.

In the last three years, nearly all Taiwan’s major cable and satellite operators have changed ownership as foreign finance houses including Australia’s Macquarie Securities and Carlyle Group have anticipated deregulation, new infrastructure investment and, eventually, higher consumption of added value digital services.

The CBIT/MPA report says that 55% of TV homes could receive digital video services through cable networks by 2013, compared with 25% from IPTV and satellite.

Additional benefits would include 35% of homes subscribing to multi-play broadband digital services by 2013 versus 5% today, while 43% would adopt high-speed broadband Internet access.

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