By Yu Huapeng (于华鹏)
Issue 596, Nov 26, 2012
News, page 3
Translated by Pang Lei
Original article: [Chinese]

A grand plan to unify all of China's cable TV companies under a single state-owned enterprise is one step closer to being completed after the State Council approved the establishment of China Broadcast Network Co. Ltd. (中国广播电视网络公司) last month.

The State Administration of Radio, Film and Television (SARFT) will be responsible for overseeing the establishment of the company which will be formed with 4.5 billion yuan in capital supplied by the Ministry of Finance. The move is part of a broader plan to intergrate China's internet, cable TV and phone services, a plan that is often referred to as the "three networks convergence" (三网融合 sānwǎng rónghé) in Chinese policy circles.

Though the State Council has already published an official document approving the establishment of the new telecommunications company, it is still not clear when it will be officially registered as this depends on when the Ministry of Finance transfers the funds.

Experts note that although establishing the company respresents some kind of progress, achieving the goal of integrating all the local-level cable companies under the control of this new enterprise will not be easy.

China's Grand Network Intergration Plan

In 2010 China's State Council announced plans to pilot the consolidation of cable networks in 10 cities and regions across the country, the move was the first step in a broader plan to converge internet, cable and telecommunication networks across the whole country.

On Oct 25 this year, the State Council officially approved a plan submitted by SARFT to establish a new telecommunications company that will lead this charge on a national scale.

SARFT has been trying to set-up such a company for the past two years but earlier plans had been knocked back by the State Council on the grounds that too much capital was required.

The new company will join China Mobile, China Telecom and China Unicom to become the fourth major player in China's telecommunications industry.

According to earlier reports, the original 4.5 billion yuan investment will be used for the establishment of the company and more capital will likely need to be injected to help finance the companies goal of acquiring regional cable companies.

An earlier plan called for the company to be established with registered capital of 15 billion yuan.

There has also been talk that China Mobile was interested in taking a stake in the new company, but, according to one industry analyst, it's currently unclear whether China Mobile still interested in that arrangement.

Whatever the eventual structure of the company, it's likely that the arrival of a fourth player will have a big impact on the telecommunications industry in China.