Star Group Ltd (
James Murdoch, chairman and CEO of Star, said in Taipei, "Our priority is to rapidly digitize the existing cable systems ... paving the way for Asia's largest rollout of digital set-top boxes and the launch of new programming and interactive services."
According to Murdoch the cash will be used to acquire stakes in cable operators owned by the Koos Group, which will then digitalize the current one-way analogue systems. Murdoch identified Taiwan as a prime target market for the venture pointing to the over 80 percent penetration rate of cable and the absolute dearth of digital set-top boxes.
"There are virtually no set-top boxes in consumers' homes and the cable systems remain largely one-way analogue systems," Murdoch said.
Digital cable networks can carry phone calls, data and video and far outstrip the capacity available via analog cable networks.
The upgraded cable system and set-top boxes will allow viewers to view programming on Star's pay television stations and offer a range of functions such as parental control, Chinese-language electronic program guide, access to interactive premium channels and e-commerces services. Star, a wholly owned subsidiary of global media giant News Corp, operates 30 distributed services in seven languages to 53 Asian countries.
The two groups also announced that they will form a Taiwan-based service company named China Network Systems which according to Star president Bruce Churchill will manage the cable service upgrade and launch the set-top boxes.
"The primary role of that company will be to deploy the plan, provide engineering support to the cable systems and effectively launch set-top boxes in a broad manner into consumers homes in Taiwan," Churchill said.
The digital rollout will begin in the second half of this year with the first digital cable services scheduled for launch early next year, according to a company statement.
The company made it clear that it would not be producing any of the set-top boxes but would instead purchase them.
Koos Group will hold an 80-percent stake in China Network Systems while Star will control the remaining 20 percent.
However, Neslon Chang (張安平), chairman of the new company, said Koos Group would buy back Star's stake if the invested cable operators had not issued shares within eight years.
Murdoch would not elaborate in detail on why Star had chosen not to partner with GigaMedia Inc, which in March backed out of a US$100 million deal to provide Web access via cable TV services.
"We decided mutually over the past six months it was better to closely align our interest around cooperation directly with the Koos Group to further accelerate our plans right away," Murdoch said.
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