VTV takes over VTC’s cable TV company

VietNamNet Bridge – The Vietnam Cable Television and Electronics Joint Stock Company (CEC), which faces big difficulties in investment, has decided to sell 51percent of its stakes to Vietnam Cable Television (VCTV) to get money to pay bank debts.

CEC, whose the big guy VTC (the Vietnam Multimedia Corporation), and a major shareholder--has released a document informing that the management and operation of the CEC’s cable television network would be transferred to VCTV, a subsidiary of the Vietnam National Television.

The document says that from November 1, 2012, CEC’s subscribers would enjoy VTCV’s services, provided that CEC’s subscribers agree to sign new contracts with VCTV.

The new service provider would apply its pricing policy to CEC’s subscribers from December 1, 2012 (110,000 dong a month for the first TV, and 33,000 dong for the second and subsequent TVs). Meanwhile, the subscription fee for November (from November 1, 2012, to November 30, 2012) would remain unchanged at 77,000 dong.

As such, from December 2012, CEC’s service users would have to pay 33,000 dong a month more for the service fee.

Hoang Ngoc Huan, VCTV’s General Director has confirmed with the local media that approximately 20,000 subscribers would be transferred from CEC to VCTV.

The CEC’s website showed that the company was established in 1996 as an enterprise specializing in producing and supplying radio and television equipment, belonging to the Vietnam Television Technology Investment and Development under the Vietnam Television.

CEC has been developing into a multi-field company belonging to VTC. It now provides 80 standard definition TV channels (SDTV) and nearly 30 high definition TV channels (HDTV). The company plans to completely integrate Head End system to put into trial broadcasting 3D TV programs.

Nguyen Kha Dan, Chair of VTC confirmed on November 1 morning that VTC now only has 21 percent of CEC’s stakes. CEC, which has made heavy investment in the cable TV infrastructure with bank loans, has to sell its cable TV to VCTV to get money to pay bank debts.

However, Dan said the board of directors of CEC, not VTC, a shareholder, would decide the details of the deal, because VTC does not hold the controlling stakes in CEC.

Buu dien Vietnam has quoted its sources as saying that CEC has sold 51 percent of stakes to VCTV, while keeping 49 percent of stakes.

Prior to that, Dao Duy Kiem, Chair and CEO of CEC, said the high investment cost is the main reason which explains why cable TV service providers can develop the service in urban areas and the areas with high population density.

Kiem said the investment rate per one family in urban areas is 5 million dong, not including the signal decoder. As such, the service provider would take the investment capital back after five years of putting service into operation. If service providers want to expand their services to the nearby areas, they would have to bear higher costs, thus making it very difficult to recover capital.

In related news, the Ministry of Information and Communication (MIC) has opened the draft strategy on radio and television development for public opinions, under which pay-TV services would grow by 25-30 percent in 2012-2015, and 10-15 percent in 2016-2020. It is expected that by 2020, the pay-TV service turnover would reach 80 million – 1 billion dollars.

Cable TV is believed to be a lucrative field for service providers. Technology firms like AVG, Viettel and FPT have expressed their willing to jump into the market, while the intension has been facing the strong opposition from existing television content service providers.

Compiled by C. V

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