State launches broadband firm

State-owned China Broadcasting and TV Network Company was officially established on Wednesday in Beijing, and is expected to become the country's fourth broadband operator, the Xinhua News Agency reported.

Zhao Jingchun, former head of the Henan Administration of Radio, Film and Television, was appointed as the chairman of the new company, said the report.

Attempts to reach SAPPRFT by the Global Times went unanswered on Wednesday.

The new company, proposed four years ago, is widely believed to become a main player in the integration of telecom, radio and TV, and Internet networks, known as tri-network integration.

But analysts said that the company has missed the best timing to tap the country's telecom market, dominated by State-owned wireless carriers.

"The increasingly emerging and active virtual network operators give the latecomer SAPPRFT no chance to stand out from the competition," Ma Jihua, an analyst with Beijing Daojing Consultant Co, told the Global Times Wednesday.

Eleven private companies, including online retailer JD.com Inc, have been granted virtual network operating licenses by the Ministry of Industry and Information Technology in December 2013 to offer mobile telecom services.

The second batch of eight companies was unveiled in January.

The new company will lag behind on the road of tri-network integration, said Ma.

The tri-network integration was proposed by the central government in 2001 to promote the development of the three industries and domestic consumption in related sectors. Since the State Council disclosed a timetable for the tri-network integration in 2010, the sector has already experienced rapid development.

WeChat, a popular instant messaging app run by Internet company Tencent, is a typical and successful example of the integration between telecom and Internet, according to Ma.

Ma also thinks that the administration has already sensed the heated competition in the foreseeable future and appears not to consider telecom as the new company's pillar operation.

According to the report, with a registered capital of 4.5 billion yuan ($720.4 million), the company is expected to become the fourth broadband operator after China Mobile, China Unicom and China Telecom, planning to work on the projection, construction, and operation of a national cable TV network as well as related services.

Xiang Ligang, CEO of telecom information portal cctime.com, said that the registered capital is not enough to support the company in setting up and integrating a nationwide radio and television business with telecom.

"In addition, the new company's management team consists of no former executive from the three telecom operators, which will likely make its entrance into the telecom market difficult as well," Xiang told the Global Times Wednesday.

The new company will mainly focus on the building-up of a national cable TV network, which would enable it to become the nation's fourth broadband operator and strengthen SAPPRFT's cable TV business as it is facing fierce competition from over-the-top video services provided by domestic Internet companies, said Ma.

But both Ma and Xiang are concerned that scattered local cable TV network operators and conflicts of interest between SAPPRFT administrators and local governments are big barriers and not easily to be solved.

"There are some 900 local cable TV network operators currently," estimated Xiang.