China plots $14.5b national cabler

Staff Writer
16 Mar 2010

China intends to establish a "state-level cable television network company" by 2015, under the State Council.

By 2010, all provincial cable TV operators will have to integrate their cable TV networks.

A unified cable TV network, representing over 170 million users, is another classic "nice in theory" scenario for China.

SARFT is expected to form the national cable TV operator through share swaps and using government funding to buy out cable owners.

The government's total spending on creating a national cable TV firm is estimated at a whopping $14.5 billion.

The problem is that cable TV networks in China are funded through multiple sources: provincial/municipal/county governments, SARFT, SOEs and private enterprises. Some cablers are even listed.

Consolidation is thus going to be costly and complicated.

History Lesson 101 - SARFT has already tried to promote consolidation in the market by buying up operators back in early part of the last decade.

That plan didn't get very far because of huge valuation differences with operators. Perhaps it shouldn't be attempted again.

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