Cable Consolidation Moves Closer With New Umbrella Company 中国广播电视网络公司有望近期挂牌有线网络整合步伐加快

By newsdoug on July 18, 2011

China national cable operator sets sights on IPO My initial skepticism about China’s plans to consolidate its fragmented cable TV sector is rapidly fading, with local media now reporting the company created to consolidate the industry is set for official launch in July or August as the consolidation drive gains momentum. (Chinese article) The report cites an unnamed source discussing the official launch of the company, China Broadcasting Network Co, and adds that 19 provinces, or nearly two-thirds of the country, have consolidated their cable networks since the program began. It adds that China’s entire broadcasting industry now has revenue equal to about half that of the nation’s largest telco, China Mobile (HKEx: 941; NYSE: CHL). If those numbers are correct that would give the industry annual revenue of more than $30 billion, which would be enough to create an impressive new entity if I could capture even a fraction of that sum. Even if the numbers are exaggerated, which I’m sure they are, the consolidation effort seems to be gaining some serious momentum and I’d say its chances for success must now be close to 90 percent. There’s no mention in the report of the potential for a future listing of such a new company, which would presumably be planned for the next 1-2 years. I would expect it to join the country’s other three major telcos with a listing in Hong Kong and probably a simultaneous listing in Shanghai. Such a company could be an interesting investment choice, requiring huge amounts of money over the short term to upgrade a national network of aging analog cable systems but providing big potential rewards once the system is updated by offering a wider array of channels as well as video on demand (VOD) and Internet services. The company’s success could also provide a huge boost for programming makers, both domestic and international, which are already seeing more business from China’s budding online video sector led by demand from the likes of Youku (NYSE: YOKU), Tudou and Tencent (HKEx: 700). (previous post)

Bottom line: The imminent formation of China’s new national cable TV operator is the latest sign of Beijing’s determination to consolidate the sector, pushing the chances for success of the campaign to 90 percent.

对中国打算整合有线电视业的计划我最初持怀疑态度，但这种疑虑如今在迅速消退。最近我看到有当地媒体报导，一家旨在促进有线网络整合的公司有望7月或者8月正式挂牌。报导援引消息人士的话称中国广播电视网络公司近期将正式挂牌，报导还称，中国已有至少19个省完成“一省一网”。报导亦表示，中国广电业2010年总收入约为中国最大电信公司中国移动<0941.HK><CHL.N>年营收的一半。如果这些数字是正确的，那麽这意味着该行业年收入超过300亿美元，即使有所夸大，有线网络整合似乎正获得一些前进势头，我预计现在其成功机率近90%。报导没有透露这家公司是否会在未来上市，但我估计上市也就是一两年的事，它可能也会和其他三家大型电信公司一样，在香港上市，可能还会同时在上海上市。这样的公司是个有趣的投资对象，而这家公司要在短时间内将全国的老化有线网络升级，是需要巨大资金的。但一旦系统升级完毕，得以提供更多频道、视频点播等服务，这家公司有望带来巨大回报。中国的网络视频行业正蓬勃发展，如业内领军者优酷<YOKU.N>、土豆和腾讯<0700.HK>等需求旺盛，因此这家公司的成功还会有利於国内外的节目制作方。

一句话：中国广播电视网络公司即将挂牌表明中国政府决心促进有线网络整合，令该行业整合成功机率提高至90%。

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