Hong Kong Television Network’s (HKTV, 01137.HK) stalled mobile TV offering offers a stark reminder that the city’s legal and regulatory framework has not kept pace with the march of technology. In an environment where media consumption habits are changing, with people shifting from terrestrial TV to internet video, new players should have lot of opportunities to break into the sector and offer more media choices to consumers. However, things are not going the way they should in Hong Kong.
HKTV announced on March 11 that it will not be able to launch its planned mobile TV service from July due to licensing issues in Hong Kong. The company has been caught in a regulatory trap even though it acquired a mobile television license from a local subsidiary of China Mobile (00941.HK) last year. Hong Kong authorities, in a surprise announcement, said this month that HKTV will need a free-to-air TV license if its mobile television signal were to be received by more than 5,000 households.
With its existing mobile TV license deemed not valid for broadcasting to a wider audience, HKTV has been pushed into a corner. The company had been refused a free-to-air TV license by Hong Kong authorities last year, which was the reason why it decided to pursue mobile TV. But now, it has again found itself at a dead end, prompting its chairman Ricky Wong to slam the “unfair” regulatory regime.
Accusing the government of being unreasonable, Wong pointed to the illogicality of the mobile TV license terms that require seven transmitting stations—meaning at least half the people in Hong Kong will receive the signal—but at the same time meeting the requirement of less than 5,000 households.
While mobile TV service will enable users to watch broadcasts on the go on handheld devices, the license holder can have dedicated equipment installed at fixed places to receive the mobile television signal. That implies that HKTV should be allowed to transmit its signals to receivers for onward broadcast. Such arrangement should be allowed under the existing legal framework.
However, the government is insisting that HKTV should use terrestrial signal to transmit its TV signal, like the way Television Broadcasts (00511) and Asia Television operate now. The new free TV licensees in the city– PCCW (00008.HK) and i-Cable Communications (01097.HK) — on the other hand will be using fixed broadband networks for transmission.
Technically, a mobile TV signal can transmit a high definition resolution TV program that is no different from a terrestrial TV signal, given the advances in technology.
The government should neither set any limitation on how technology works or force licensees to use outdated technology to protect the incumbents, observers say.
Mobile broadband networks enable broadcasters to reach more users via tablets and smartphones, providing a wide range of TV programs through apps or websites. As such content is delivered through internet, which is not subject to any broadcast regulatory framework, the services have been growing fast.
To further open up the TV market, the government should learn from the auction of 3G/4G mobile spectrum and put TV spectrum up for bidding. That will enable more players to bid for frequencies and offer new choices, as the two existing broadcasters have occupied frequencies for 15 channels.
In addition, authorities should ensure technology-neutrality in terms of transmission standard, and let the market decide which transmission technology is to be deployed.
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