Telco bows in cable market, undercuts rivals

Chunghwa to charge subs a nominal $7 per month fee

TAIPEI — State-owned Chunghwa Telecom has entered Taiwan’s contentious cable TV market, ending a year of growing concern by the island’s three main cablers.

The telco giant will bow a digital TV platform at the end of the year as other cablers put their own digital expansion on hold until government restrictions and price caps are lifted.

Chunghwa Telecom was the island’s sole telco and has become the de facto broadband provider. It will use this strong infrastructure as a springboard into cable TV.

Chunghwa will charge subscribers a nominal fee of $7 per month, undercutting rivals China Network System and Eastern TV Group’s rates of between $15 and $19 per month.

The rock-bottom fee has sparked cablers’ suspicions that Chunghwa is backed by government coin. It has the advantage of falling outside many of the restrictions regulating the cable TV industry set by the Government Information Office.

GIO head Huang Hui-chen denies Chunghwa is getting favorable terms. “We intend to provide a fair and competitive playing field for all concerned parties,” he says.

The GIO wants half of all households to subscribe to digital cable TV by 2006. Currently, some 80% of households have basic cable TV.

Cablers are fighting the GIO-set price cap of $19 per month, regardless of service offered.

“The government and the public have to change their attitude toward cable TV,” CNS topper Daniel Cheung says. “They treat it as a utility, and want it cheap.”

Set-top boxes vital for rolling out digital have been capped at $120. That figure, Cheung argues, makes it impossible for any meaningful return on investment.

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