Thu, Sep 30, 2010 - Page 2 News List

NCC likely to agree to Tsai Kbro cable purchase

EXTENDING REACH:The Tsai family is a key player in the nation’s finance and telecom industries, and could be one in the cable TV industry if the sale is approved

BY SHELLEY SHAN  /  STAFF REPORTER

The Tsai family that dominates the nation’s finance and telecom industries could soon fulfill its dream of branching out into the cable television industry after the National Communications Commission (NCC) said yesterday that it is very likely to approve its purchase of 12 cable television systems owned by Kbro Co (凱擘), a multiple-system operator backed by the US-based Carlyle Group.

Local media reported that Fubon Financial Holding Co chairman Daniel Tsai (蔡明忠) and his brother, Taiwan Mobile Co chairman Richard Tsai (蔡明興) — sons of Tsai Wan-tsai (蔡萬才), who was ranked third on Forbes’ list of Taiwan’s 40 richest individuals this year with assets of US$5.3 billion — plan to buy the cable TV provider through a media company they set up called Dafu (大富).

Although the main Dafu shareholders also own shares of Taiwan Mobile, NCC Spokesperson Chen Jeng-chang (陳正倉) said Dafu would not qualify to be an affiliate of Taiwan Mobile. The shareholders hold about 17 percent of Taiwan Mobile and to become an affiliate, Dafu’s shareholders would have to own 50 percent of the shares of Taiwan Mobile, Chen said.

“Some people may be gauging the Tsai family’s influence in the cable television market by counting the subscribers of the four cable television systems that are owned by Taiwan Mobile,” Chen said. “When added up, the purchase would allow the family to own about 33 percent of the subscribers in the nation, which did not exceed the cap stated in the regulations.”

Although the NCC commissioners decided yesterday to continue the discussions next week, Chen said “the chances that this case would win the approval of the NCC commissioners are very, very high” as the commission found the purchase by Dafu did not have any investment from the government, political parties and the military, which would have created other legal obstacles to the deal.

According to the commission, the 12 cable television systems owned by Kbro had about 1.12 million cable television service subscribers nationwide as of June this year, which accounted for approximately 22.3 percent of the market share. The NT$36 billion (US$1.15 billion) deal has drawn attention as it creates a union between a major telecom operator and a key player in the cable television market.

Because the deal will bring tremendous change to the market, Chen said the commission hoped Dafu could make commitments about how it plans to provide digital cable television service, improve the quality of the programs aired through its cable television systems and provide assurances it will not deliberately boycott any channel from being broadcast on its system.

So far, the prevalence of digital cable television service in the nation is less than 5.7 percent, Chen said.

Additional reporting by CNA

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