SARFT takes control of IPTV in China

Top government body awards control to broadcast regulator

SHANGHAI -- China's evolving plans for media convergence now appear to grant control of Internet Protocol TV to the State Administration of Radio, Film and Television, official media reported on Wednesday.

The apparent move by the State Council, China's cabinet, could clarify a previously gray area in a potentially lucrative media arena in the world's largest Internet market.

In a blog post on Monday, the opening day of the Shanghai International Television Festival, the State Council's plan to grant SARFT control of IPTV was revealed by Bao Ran, editor-in-chief of China Digital TV magazine.

The blog post hints at an answer to months of guessing since the State Council laid out a general proposal to synchronize its telecommunications, broadcast and Internet media in January -- a process that has been dogged by scattered cable TV networks and conflicts of interest between different administrative bodies and local governments.

Unlike traditional cable or wireless TV, IPTV enables interaction with end-users and provides services such as live TV, video-on-demand and access to the Internet via TV sets with a set-top box -- all services that could allow for advertisers' greater understanding of China's growing middle-class consumer base.

Ji Chendong, a telecom analyst with Frost Sullivan, said that IPTV also was regarded as a potentially lucrative field for telecom operators, equipment and software makers and broadcasters.

But if SARFT has won supervision rights over IPTV, telecom operators wanting to enter the market might have a hard time getting licensed, Ji told the state-run Global Times newspaper on Wednesday.

Many analysts say cable TV is still most likely to reach new Chinese consumers first with content that's still trying hard to break a typically sterile mold.

China has 395 million TV households -- including 163 million cable TV households and 63 million DTV households -- reaching more than 95% of its 1.3 billion population.

Cable operators who want to offer VOD to compete with IPTV will have to invest 200 billion yuan ($29.3 billion) over the next five years, Fang Meiqin of BDA China in Beijing told THR in March.

Fang conceded then that SARFT was reluctant to open the IPTV market to telecom operators, but might have little choice after the State Council's January guidance.
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