Thu, Aug 28, 2003 page10

• Taipei fixes descrambler prices

  INTERFERENCE Digital cable companies began to reconsider their business plans after the Taipei City Government announced price caps for set-top descrambler boxes

  • By Jessie Ho / STAFF REPORTER
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  Two local cable television operators yesterday were reconsidering their plans to launch digital cable services in Taipei City after the city government set a price cap on the set-top descrambler box.

  The city government's Cable TV Fee Review Committee on Tuesday fixed the price of the de-scramblers at NT$3,500, which is NT$1,500 to NT$2,000 lower than cable companies originally proposed for sale to subscribers.

  The descramblers are devices that can decode dozens of digital channels transmitted to subscribers' houses.

  The city government also ruled that the box fee is refundable when subscribers cancel their digital cable services.

  For those who do not want to pay for the full charge, they can rent the boxes at the rate of NT$140 per month with a deposit of no more than NT$525, according to the city government.

  The rules quickly drew sour reactions from cable operators yesterday.

  "We are still evaluating if we are going to accept the deal," said Sonia Yang (楊筑儀), public relations associate manager at China Network Systems Co (中嘉網路). China Network Systems is 80 percent owned by the Koos Group (和信集團).

  China Network Systems laun-ched their digital service in Keelung City this June, and has since gained approximately 1,000 subscribers to date.

  It charged a NT$6,000 sale price for the box or a monthly rental fee of NT$175. The company proposed the same rate for Taipei consumers.

  "We do not manufacture the boxes ourselves and we therefore have limited control over providing our customers with reasonable prices," Yang said.

  Nonetheless, the company may lose money if they are forced to shoulder the consumers' costs as it wants to expand the market, she added.

  Another major cable operator, Eastern Multimedia Co (東森媒體科技), declined to comment on the issue, saying it will announce its decision after receiving official notice of the policy from the city government, said the company's chief executive officer, Charles Wu (吳中立).

  Eastern Multimedia proposed charging NT$5,000 for the set-top boxes.

  The current cable services charge NT$550 per month. There are about 800,000 household cable TV subscribers in Taipei City, of which 700,000 are users of Eastern Multimedia and China Network Systems.

  Chen Cheng-yi (陳正毅), spokesman for the General Chamber of Commerce (全國商總), which is chaired by the head of Eastern Multimedia Corp (東森集團), Gary Wang (王令麟), commented on the issue, saying the ceiling price set by the city government put companies in a bind.

  "The only way to reduce the box price for the two companies is to purchase a massive number of boxes at once, but they dare not to take the risk, as the market for the new service is still small at this stage," Chen said.

  However, if the two suppliers decide to quit the Taipei market, their investments on the digital service infrastructure in the area will go down the drain, Chen said.

  The Consumers' Foundation (消基會) is content with the Taipei City Government's policy.

  "We're glad to see the government defending consumers' interests by lowering the price of the box," said Cheng Jen-hung (程仁宏), secretary-general of the foundation.

  The latest survey conducted in August in Keelung showed that 199 out of 200 subscribers polled were disappointed at the paid-channels.

  Therefore, "the next issue which we are going to focus on is whether the programs and service to be provided are commensurate to the charge," Cheng said.
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