May 12, 2006
Taiwan's cable TV industry is thriving and has received the good graces of foreign investment, and companies both foreign and local compete for the top spot as Taiwan's media conglomerate. Notable activity in the market recently includes Australian conglomerate Macquarie Media Group's recent acquisition of Taiwan Broadband Communications, the Carlyle Group's majority stake in the Eastern Multimedia Group, and StarTV's holdings in Taiwan's biggest multiple service operator (MSO), China Network Systems (CNS).
Having operated in Taiwan for six years, the Carlyle Group fully understands the profitability of the cable TV industry. Carlyle had initially invested in Taiwan Broadband but quickly sold its share and then bought a majority stake in the Eastern Multimedia Group. This move underlines a positive outlook for industry development and the trend of digital convergence in the traditional cable TV market, where MSOs provide three major media products: cable TV, Internet and phone services -- a combination now being referred to as "3P" in Taiwan.
There are also the local players in Taiwan's 3P market: CNS, Eastern Multimedia, Taiwan Broadband, Taiwan Fixed Network, and Taiwan Infrastructure Technology Company are Taiwan's biggest MSOs, competing in a market with a total value reaching NT$30 billion a year.
Local MSOs are not concerned about the influx of foreign capital in Taiwan's media industry – foreign companies are rather welcomed, given the major competition by Chunghwa Telecom, which holds an overwhelming market share.
The business volumes of telecom providers such as Chunghwa Telecom, Far Easttone, and Taiwan Mobile are in the hundreds of billions of NT dollars – a scale of 10 times that of the cable TV industry.
Observers see 3P as an inviting business opportunity to take the cable TV market to the next step. And while the Carlyle Group's buy and sell strategy is clear, who will lead the 3P market competition is most certainly up in the air.
(Economic Daily News)
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