China Mobile's cable dream could turn sour

Tony Brown/Informa Telecoms and Media
05 Dec 2012

If mainland-press speculation is correct that the Chinese government has blocked China Mobile from acquiring a stake in new consolidated national cable-TV-network operator China Radio & Television Network (CRTN), the viability of the entire CRTN project will face serious questions.

For much of the past year it has been conventional wisdom among many telecom-industry watchers that it was only a matter of time before it was officially announced that mobile market leader China Mobile had secured a crucial stake in CRTN. This belief was not founded on official statements from any of the main players in the deal – that’s not the Chinese way – but more on the deal’s seeming inevitability, since it was a win for all three major parties at the table.

For China Mobile, a stake in CRTN would give it immediate access to a nationwide fixed-line network with more than 150 million cable-TV subs, thereby keeping it from having to deploy its own extensive last-mile fixed-broadband networks at ruinous cost.

CRTN, in turn, would be able to bundle China Mobile’s market-leading mobile services and move its services toward the all-IP era with help from China Mobile’s technical experts.

From the government’s point of view, the deal also seemed to make sense, because China Mobile could provide critical financial and technical support in helping CRTN become a serious player in the telecom market, rather than being largely stranded in the broadcast market with no telecom expertise or assets.

God laughs at those who make plans …

In the past year my contacts in China have been constantly reassuring me that the deal was on the way to being done. One Beijing telecom industry source even told me that “this thing is nearly closed now.” And yet the deal remained frustratingly unconfirmed, even as local press reports indicated that the setting up of CRTN was inching toward completion.

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