The Chief Executive in Council has approved TVB Pay Vision's application for revising its domestic pay-television programme service licence condition and milestone.

The firm must incur a minimum capital and operating expenditure of $2.98 billion by February 22, 2013, with a $50 million bonded sum.

The Commerce & Economic Development Bureau said, from the public-interest perspective, a continuing investment by TVB Pay Vision in the local broadcasting market will bring about public-interest gain by providing competition and choice in the market - as well as continuous investment in the broadcasting industry.

TVB Pay Vision had committed itself to a service roll-out plan with 15 milestones when applying for the domestic pay-television programme service licence in 2000. It has completed 14 milestones; the remaining one was to invest $5 billion within 78 months from the start of the licence - by August 23 last year - with a corresponding $50 million performance bond. 

Revision details

The licensee earlier applied for a complete release from the milestone and the corresponding bonded sum, and further submitted last October an alternative proposal of incurring $1.38 billion during the remaining validity period of the licence by February 2013 as capital and operating expenditure.

Including the investment of $1.6 billion already incurred in 2000-07, TVB Pay Vision's proposed cumulative amount of investment was $2.98 billion in place of the original amount of $5 billion.

The bureau considered there are sufficient grounds to justify a complete release of the licensee's original milestone which formed part of the licence condition. However, having regard to the supportive arguments submitted by TVB Pay Vision, including reduction in hardware costs as a result of technological advancement, market changes over the years and the over-estimation of subscription size, the bureau considered its proposal at $2.98 billion could be justified.

This particular milestone proposed by TVB Pay Vision was also significantly higher and spanned a much longer time period as compared to its competitors which were licensed in 2000 and subsequently withdrew from the market. 

Under the proposal, TVB Pay Vision will continue to invest to boost the quality and variety of its television programme service.

The bureau decided to keep the $50 million bonded sum intact to underline its determination to safeguard the integrity of the licensing regime and serve as a reminder to all television licensees.