China Broadcasting Corp Denies Capital Shortage Rumor
CCTime, 10/24/12
Recent industry rumors have claimed that shortfalls in the China Broadcasting Corporation's (CBC) cash flow have resulted in CBC headquarters halting funding for CMMB-based mobile TV network construction and maintenance, leaving many local CBC subsidiaries searching for solutions on their own. Senior CBC management responded recently to the rumors, stating that provincial CBC subsidiaries have always been responsible for covering network construction fees in their own areas, and flatly denying the existence of any funding problems or cash flow shortfalls as rumored. When asked about a possible CBC partnership with China Mobile (NYSE: CHL; 0941.HK), CBC management sources said that talks were still ongoing.
CBC's business is based on charging for premium services - primarily services dependent on China Multimedia Mobile Broadcasting (CMMB) capabilities bundled with China Mobile's TD-SCDMA handsets. Reportedly, however, there has been a sharp decline in orders of CMMB chips recently. A source at an upstream chip manufacturer said that TD-SCDMA handsets were no longer required to bundle CMMB functionality now that China Mobile's three-year contract with CBC has run out. The higher cost of CMMB-enabled TD-SCDMA chips has made handset manufacturers unwilling to continue bundling the technology, the source said - hence the decline in orders.
According to CBC sales projections, a total of 50 mln CMMB-enabled terminals will be sold in 2012, at least 70% of them mobile phones.
Editor's Note: For more background on this topic, please see "Rumor: China Mobile, CBC Disagree on Resource Allocation" MD 5/02/12 issue and "Rumor: China Mobile, CBC to Continue CMMB Cooperation" MD 2/07/12 issue.
Keywords: China Mobile television CMMB CHL 0941.HK China Broadcasting Corporation mobile phone TV
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