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State Council Issues Policy to Accelerate DTV Development

SARFT, 1/21/08

The General Office of the State Council has issued the "Policies to Encourage DTV Industry Development" to 6 ministries, giving strong support to the development of digital TV, and highlighting areas where telecom and broadcasting players can converge. The 6 ministries include the National Development and Reform Commission (NDRC), Ministry of Science and Technology (MOST), Ministry of Finance, Ministry of Information Industry (MII), State Administration of Taxation, and State Administration of Radio, Film and Television (SARFT). The Policies will be implemented from February 1, 2008.

The policy first re-states the official goals for DTV development: to broadcast the Olympic Games in digital high-definition in 2008; complete cable DTV conversion in most areas at and above the county level by 2010, and shut down analog signals by 2015; realize the strategic shift of the domestic TV set industry from analog to digital, reaching annual sales revenue from digital TV sets and related products of RMB 250 bln, and exports of USD 10 bln.

The policy encourages DTV-related enterprises to source capital through stock market listings, bond issues, or, for firms already listed, issuance of new shares. Such firms will also receive preferential tax treatment, with DTV operators to enjoy up to 3 years of exemption from sales tax on revenues from cable DTV basic subscription fees until 2010.

The policy emphasizes that cable DTV receiving terminals (including set-top boxes and all-in-one digital TV sets) must implement separation of STB from conditional access module. Use of domestically developed technologies is to be encouraged in DTV broadcasting systems, while existing foreign conditional access (CA) systems should be simulcrypted.

The policy is the first to clearly promote "convergence", encouraging broadcasting organizations to provide DTV service and value-added telecom services via national public communication networks, broadcasting networks and other information networks. Involvement of state-owned enterprises, including telecom companies, in DTV access network construction and terminal digital upgrades will also be supported.

Keywords: Policies to Encourage DTV Industry Development Olympics timetable financing government support set-top box simulcrypt convergence DTV VAS telecom wireless analog conditional access conversion DTV HD MII Ministry of Finance Ministry of Science and Technology NDRC policy SARFT State Administration of Taxation State Council tax television TV set

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