23 Oct 2009 12:51

Gehua CATV obtains video-on-demand license

Shanghai. October 22. INTERFAX-CHINA - Shanghai Stock Exchange-listed Beijing Gehua CATV Network Co. Ltd., the exclusive cable operator in Beijing, has obtained a license to provide video-on-demand (VOD) services from China's State Administration of Radio, Film and Television (SARFT), the operator announced on Oct. 22.

The mandatory license will allow Gehua CATV to provide live VOD and video downloading services via its cable TV network to Beijing residents, according to the announcement.

As of June 30, Gehua CATV had a cable TV subscriber base of 3.97 million, of which 2.16 million are digital cable TV subscribers.

In the first half of this year, Gehua CATV began trial operations of digital interactive TV in Beijing and now has approximately 10,000 digital interactive TV service subscribers.

Xu Yaowen, an industry analyst with Galaxy Securities, told Interfax that with more cities in China completing network upgrades to support interactive and other value-added services, the only issue for the development of such markets lies in content.

However, according to Xu, network upgrades have already consumed a large portion of cable operators' annual budgets. As such, there will be a capital shortfall for cable TV operators to invest towards content development in the short term.

Gehua CATV saw its net profit drop by 20 percent year-on-year to RMB 143.77 million ($21.04 million) for the first half of 2009. The company will announce third-quarter financial results on Oct. 30.