Tuesday, July 23, 2013

Government Policy Uncertainty Slows China Cable Industry

Public communications businesses, whether of the mobile, fixed network telco, cable TV, satellite, fixed wireless or Wi-Fi and TV white spaces varieties, always require the approval, and sometimes the support, of government regulators and legislators.

The reason is the need for spectrum, rights of way and a legal framework to enable those businesses.

“The biggest challenge facing cable operators in China has nothing to do with technology or competition. Instead, it’s politics that will make or break Ethernet over Coax rollouts,” says  Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research.

“After last year’s turnover among Communist Party leadership, as well as in key positions within SARFT, the emphasis on China’s NGB (next-generation broadband) network project has been called into question, and it’s adversely impacting infrastructure build-outs and subscriber additions,” Heynen says.

Despite aggressive pricing and service bundling, Chinese cable operators are having a difficult time adding new subscribers, Infonetics Research says.  

As of June 2013, nearly 25 million homes had been passed with EoC services, with only 4.9 million subscribers, a take rate of less than 20 percent.

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