Tue, Jul 28, 2009 - Page 12 News List

China Network to increase capex

By Lisa Wang  /  STAFF REPORTER

China Network Systems Co Ltd (CNS, 中嘉網路), the nation’s second-largest cable TV provider, said yesterday it would raise its capital expenditure this year by 20 percent, including on upgrading its digital network and purchasing set-top boxes, to promote its new digital TV business, a company executive said yesterday.

CNS, 60-percent owned by private equity fund MBK Partners Ltd, said it has started offering digital TV programs such as Discovery HD on four digital channels along with 80 digitalized analog channels for subscribers.

However, it lags its competitors in offering high-quality TV programs. Local rivals Kbro Co Ltd (凱擘), Taiwan Broadband Communications (台灣寬頻) and Taiwan Mobile Broadband (台灣大寬頻) started delivering digital TV programs in the first half of the year.

To help its new business grow, CNS plans to allocate 15 percent of this year’s total capital expenditure on its digital business, including the purchase of set-top boxes, which convert analog signals into digital, CEO Charles McElroy told a media briefing.

McElroy said last year that CNS planned to invest NT$5 billion over five years on network upgrades and deployment.

The cable TV provider has purchased 6,000 set-top boxes from local electronics maker Prime Electronics and Satellitics Inc (百一電子). Prime said it expected to ship about 20,000 set top boxes to CNS by the end of this year.

CNS currently has 1.04 million cable TV subscribers, with half of them expected to switch to digital TV in the following years, McElroy said.

The uptake in Taiwan would be faster than the US, which took more than 10 years to boost the penetration of digital TV services to 58 percent, as people here are more tech-savvy, he said.

He estimated the current penetration rate in Taiwan at about 10 percent.

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