China Cablecom Holdings, a joint-venture provider of cable television services in the People's Republic of China (PRC), has completed the first phase of a previously announced agreement to acquire a 60 percent economic interest in Hubei Chutian Video and Information Network.

 

Hubei Chutian Video and Information Network is a joint venture with Hubei Chutian Broadcasting and Television Network Company, a local state-owned enterprise, owned by the Hubei branches of China's State Administration of Radio Film and Television (SARFT) and nine other municipal branches of China's SARFT in the Hubei province.

 

Hubei Chutian controls over 30 cable network systems, which serve approximately 50 percent of a total provincial population base of 60.3 million.

 

The Hubei Chutian cable network passes 4.5 million homes and has approximately 3.0 million paying subscribers.

 

This is the second major acquisition by China Cablecom since the company was founded in October of 2006. It follows the company's September 2007 acquisition of Binzhou Broadcasting and Television Information Network Company, an operating cable TV joint venture with a local SOE owned by the Binzhou branches of SARFT in the Shandong province.

 

"I am very pleased to report our closure of phase one of the acquisition of Hubei on schedule. With over 1.2 million current paying subscribers, China Cablecom ranks as one of the largest cable operators in the world by subscribers," said Clive Ng, founder and executive chairman of China Cablecom.

 

"Our team continues to successfully execute our expansion goals and securing this joint venture has allowed us to create significant organic growth opportunities through recurring subscription-based revenues thereby strengthening our cash flow from operations,” added Ng.

 

"With the nation-wide digital migration initiative gaining momentum, China Cablecom is committed to its digitization strategy as we move into the new era of digital TV broadcasting. We will continue to look for profitable acquisition opportunities to diversify revenue and enhance the long term value of China Cablecom Holdings for its shareholders,” Ng concluded.

 

China Cablecom Holdings is a joint-venture provider of cable television services in the People's Republic of China, operating in partnership with a local state-owned enterprise (SOE) authorized by the PRC government to control the distribution of cable TV services through the deployment of analog and digital cable services.

 

China Cablecom operates 22 cable networks with over 1.2 million paying subscribers. China Cablecom Holdings' strategy is to replicate the acquisitions by operating partnership models in other municipalities and provinces in the PRC and then introducing operating efficiencies and increasing service offerings in the networks it operates.

 

China Cablecom recently entered into an agreement to acquire a 60 percent economic interest in a cable network in Hubei province with paying subscribers exceeding 800,000.

 

The company originally acquired operating rights of the Binzhou Broadcasting network in Binzhou, Shandong Province in September 2007, by entering into a series of asset purchase and services agreements with a company organized by SOEs owned directly or indirectly by local branches of SARFT in five different municipalities to serve as a holding company of the relevant businesses.

 

Total consideration to be paid for phase one will be approximately $55 million and will be payable in installments.

 

Anil Sharma is a TMCnet Contributing Editor