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Following is the speech by the Financial Secretary, Mr John C Tsang, at Cable and Satellite Broadcasting Association of Asia (CASBAA) Convention 2008 at Pop TV Arena, West Kowloon this morning (October 29):
Marcel (Fenez), Distinguished Guests, Ladies and Gentlemen,
Good morning.
It is a great pleasure for me to join you for the CASBAA Convention again this year. This event has become an annual fixture in my calendar in recent years, and I must say the CASBAA Dome is a wonderful new venue for this conference.
It is always good to see so many familiar faces returning to this convention each year, as well as a few new ones as well. A warm welcome to you all, and especially those of you who have travelled long distances to be here.
The fact that CASBAA has made Hong Kong its "home" and has staged each one of its past 15 conferences here, tells me that we must be doing something right. It is a vote of confidence for Hong Kong as Asia's digital city, and I guess a pretty good place for conventions too.
Last year, I spoke of our plans to introduce digital terrestrial television. This has since been achieved, and Hong Kong's advantages as a regional broadcasting hub are a little - dare I say - clearer as a result.
Unfortunately, I haven't had much time to relax and watch television recently, and when I do, it seems that all eyes are on the current global financial storm. There is just no escape.
However, all storms - including financial tsunamis - do pass, and this one will be no exception. What's important is to look beyond the immediate crisis so that we don't miss the opportunities that will surely follow.
So today, I wish to talk about some of the opportunities I see for broadcasters in our city, in our nation and in our region. Asia is the world's most populous market with huge potential for economic growth, and Hong Kong is fortunate enough to be right in the middle of the action.
We have 16 international and regional broadcasters operating in Hong Kong. They provide about 200 satellite television channels targeting viewers across the Asia-Pacific region. Locally, our two domestic free-to-air TV licensees and three pay TV licensees offer around 300 television channels to our population of seven million. We also have 13 radio channels and will soon have a new commercial radio operator.
The depth and diversity of our broadcasting scene is the result of government policy that provides a regulatory environment that is conducive to business development, in different industries, including the broadcasting industry.
True to our status as the world's freest economy, we have a light-handed regulatory regime for the broadcasting industry. There are no foreign investment limits and no restrictions on business models. Neither do we pre-censor broadcast contents. There is also no restriction on subscription rates or packaging for pay TV services. We prefer to leave it to the market and the consumers to decide. Our motto is: "Market leads and Government facilitates".
I am pleased to note that this light-touch approach to regulation has earned Hong Kong the top ranking in CASBAA's recent study on pay television regulation in the Asia-Pacific region.
Hong Kong is also an effective experimental test bed and a centre for marketing new broadcasting and communications technologies, such as the adoption of Internet Protocol Television, IPTV was introduced in Hong Kong five years ago, and we now have more than one million households, accounting for close to half of our television viewers, who subscribe to these services.
Earlier, I mentioned that we have commenced digital free-to-air terrestrial television broadcasting. This has already reached 75% terrestrial coverage, with about 25% household penetration since the launch 10 months ago. Hong Kong audiences can now receive 12 digital TV channels free of charge, including a full-time high-definition channel as well as a round-the-clock news channel.
In other places, these services are often provided only via pay TV services.
So we have been making some progress in the past year, and we will continue to keep our finger on the pulse of the broadcasting industry in monitoring future trends. One of these trends is the convergence of mobility and broadcasting.
Hong Kongers are well known for their passion for mobile phones, and their enthusiasm to try out the latest models. Our mobile phone penetration rate is more than 150%, and there is considerable market interest in the possibilities that will come with new broadcast-type mobile television services. This is already widely available through the existing 2.5G and 3G communications platforms. We have completed a public consultation, and will soon announce the implementation framework for new mobile TV services in Hong Kong. We will continue to follow the well-established technology-neutral and market-led principles in introducing these new and innovative services.
We are also fully committed to upgrading our communications infrastructure. You may have noticed some of the WiFi hotspots dotted around the city. We have now about 7,000 WiFi hotspots and more are being developed every day. They enable us to go online conveniently in many parts of the city.
As a leading wireless city, we will release frequency spectrum for the provision of broadband wireless access services supporting advanced high-speed wireless fixed and mobile services. The public will have a wider choice of innovative services, and they can access the Internet and multimedia services any time, anywhere, and while on the move.
In the next few months, we will auction the spectrum, which has been carefully selected in response to industry concerns to prevent possible interference with satellite TV broadcasts. We are pleased to note that CASBAA's latest report, concerning WiMax development released this morning, which recognises that Hong Kong is "leading the way to better approaches" in Asia for the provision of broadband wireless access services. We appreciate CASBAA's valuable input to our policy formulation.
As well as adopting new and emerging technologies including the Internet, 3G, WiFi, digital television and mobile television, a key area for the Government is to promote research and development activities.
Our Innovation and Technology Fund supports projects that contribute to innovation and technology upgrading. More than $3.5 billion has already been used to support about 1,200 projects in various technology areas. About 60% of the funding so far has gone to projects related to Information and Communications Technology (ICT).
In addition, the Government-established Applied Science and Technology Research Institute, or ASTRI, carries out R&D projects with the objective of commercialising new technologies, particularly for communications and consumer electronics. Since 2006, ASTRI has played a role as an ICT R&D Centre and has been collaborating with the Mainland and overseas institutions.
ASTRI joined hands with Tsinghua University in Beijing to develop technologies relating to digital television set-top boxes, which are compatible with the Chinese National Standard. It has also been undertaking projects on the WiMAX platform technology, enabling fixed and mobile voice, data and video communications beyond WiFi and 3G.
Our R&D efforts focus on overseas and the Mainland markets as well as the local market. Hong Kong Science Park has established a solar energy R&D centre in support of DuPont's Global Thin Film Photovoltaic Business. DuPont's production base will be in Shenzhen, where they can benefit from competitive land prices and labour supply. Their R&D facilities will remain in Hong Kong to take advantage of our strengths, including strong protection of intellectual property and the supply of qualified staff as well as low taxes, advanced infrastructure and other benefits that all our companies enjoy.
The DuPont venture is the first major collaboration project under the "Shenzhen-Hong Kong Innovation Circle" and points the way to a model that can be further developed. By partnering with the Mainland on joint promotions, we aim to engage more internationally acclaimed high-tech companies to establish operations in this part of the region.
Targeting the huge Mainland China market, our energetic businesses are quick and adaptive in responding to market trends. Our participation in the Mainland market is further enhanced by the Closer Economic Partnership Arrangement, or CEPA, that was launched in 2004. This is a WTO-compliant free trade pact that provides greater market access for Hong Kong's products and services entering the Mainland market.
Under CEPA, numerous new market opportunities are now available to Hong Kong-based service providers in various sectors, including information technology, telecommunications, TV and film production. The best part is that the benefits of CEPA extend to foreign companies based in Hong Kong. I encourage all of you to take an even closer look at this opportunity.
Ladies and Gentlemen, Hong Kong is a place that never stands still for long. West Kowloon, where we are today, is a good example. The area has been earmarked as the site for our cultural hub, the West Kowloon Cultural District. This is also a crucial strategic investment for Hong Kong - a major commitment for the future. We aim to attract world-class cultural and entertainment events to the area for our residents and visitors to enjoy. No doubt, they will also provide opportunities for our broadcasters as well.
As part of the development, the express railway terminus on the doorstep of the future West Kowloon Cultural District will be yet another gateway to the Mainland. The Guangzhou-Shenzhen-Hong Kong Express Rail Link, scheduled for completion by 2014-15, will cut the journey to Guangzhou to just 48 minutes, and it will take 10 hours by train to Beijing.
Increased connectivity with the Mainland is an important part of our strategy for sustainable development. At the same time, Hong Kong remains one of the most global cities in the world according to a new Global Cities Index released this month by consulting firm A. T. Kearney, The Chicago Council on Global Affairs and FOREIGN POLICY magazine. The index ranks Hong Kong as the fifth most global city in the world and second in Asia.
The year has been a challenging one, as well as a rewarding one for Hong Kong. In October this year, we were a co-host city of the Beijing Olympic Games, and we successfully staged the Olympic and Paralympic Equestrian Events. The Olympics gave a global television audience the chance to see our city and our country at its best.
These days the equestrian hurdles have been replaced by financial hurdles, but I can assure you that Hong Kong will once again rise to the challenge.
Finally, I wish to thank CASBAA for its unstinting confidence in Hong Kong. And I wish this convention every success. For those of you out-of-towners, do find time to explore our city. You will find bargains everywhere. So, shop a lot.
Thank you.
Ends/Wednesday, October 29, 2008
Issued at HKT 11:11
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