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Following is the speech delivered by the Financial Secretary, Mr John C Tsang, at the Cable and Satellite Broadcasting Association of Asia (CASBAA) Convention 2009 held at Grand Hyatt Hotel, Wan Chai, this (November 4) morning:
Marcel (Fenez), distinguished guests, ladies and gentlemen,
Good morning to you all.
I know mornings are difficult especially after a very tedious evening the night before. I know CASBAA throws very good parties and I understand that there will be more coming in the next couple of days.
It is my great pleasure to join you again this year for the CASBAA Convention. A warm welcome to you all.
The last time we met, the global financial crisis was impacting strongly on Hong Kong and the rest of the world. I am pleased, and, indeed, very relieved to say that the situation is considerably brighter these days. However, we are certainly not taking our eye off the ball. Although Asia appears to have weathered the financial storm in pretty good shape, the global economy remains relatively fragile.
Something that has not changed over the past year is our commitment to providing the best possible operating environment for cable and satellite companies, and, indeed, all companies, to flourish in Hong Kong. Our Government is fully supportive of the broadcasting and media industries here. This year, our Commerce and Economic Development Bureau is the official partner of this Convention, and our inward investment agency InvestHK has been sponsoring this event for a number of years.
In the next few minutes, I shall talk a bit about some of the ways the Hong Kong Government is responding to an increasingly competitive broadcasting environment in Asia.
Over the years, Hong Kong has developed a strong and robust communications infrastructure. We have become a front-runner in transforming our communications network from copper wire to fibre optics and, now, to the wireless network.
In fact, the dramatic transformation of the global telecommunications network also has some roots in Hong Kong, thanks to the pioneering ˇ§cable guy, ˇ¨ our own Professor Charles Kao. Last month, Professor Kao won the Nobel prize for physics for his pioneering work in developing and using fibre optics in telecommunications. Professor Kao spent some of his formative years here in Hong Kong, and was a Vice Chancellor of one of our distinguished universities for almost a decade.
Perhaps, without his groundbreaking work that began back in the 1960s, we would not be here today.
Our goal now is to make the most of our new technologies and continue to strengthen our broadcasting infrastructure.
Over one million households, or close to half of our population, now subscribe to Internet Protocol Television or IPTV services. Another area where we have been moving quickly is the introduction of free-to-air digital terrestrial television (DTT) broadcasting.
Soon our DTT services will reach 85% geographical coverage. Some 40% of our population, or over 900,000 households, are already watching digital terrestrial television. Hong Kong audiences can receive 11 digital television channels entirely free of charge, including two high-definition channels as well as round-the-clock news channels.
Often, in other places, these services are provided only via pay television services. Some may regard our model as a threat to pay TV operators. However, we are confident that competition in the marketplace is fundamentally a good thing, and we encourage the development of new services.
The successful development of digital television is one of our strategies in becoming a leading digital city in Asia. Of course, there is no room for complacency. We are watching with close interest the next wave of technological advancement, including the increasing convergence of mobility and broadcasting.
While Americans are said to be addicted to oil, Hong Kongers seem to be addicted to their mobile phones as well as the latest technologies and gadgets. With a mobile phone penetration rate of over 160%, there is huge potential to introduce new broadcast-type mobile television services beyond streaming video content over the existing communications platforms. Earlier this year, we released radio spectrum through auction for operators to run high-speed wireless access services, starting the move towards the introduction of 3.5G or 4G services.
We are fully committed to upgrading our communications infrastructure while maintaining a liberal regulatory framework. One illustration is the wide coverage of WiFi hot-spots in Hong Kong. Through the joint efforts of the Government and the private sector, there are now some 8,600 WiFi hotspots across the city, and the number is growing daily.
Subject to market demand, we are prepared to release more spectrums for mobile services. We are also studying the introduction of spectrum trading so that this scarce public resource can be put to more efficient and innovative use. As the wireless market continues to grow, people will have a wider choice of new services. Our vision is for everyone to have access to the Internet and multimedia services at any time, anywhere in Hong Kong.
A little earlier I touched on our liberal regulatory framework. Allow me to expand on this important area. As a free and open society, our guiding principle is to provide a light-handed regulatory environment that is conducive to business development.
We are also firmly committed to our core values, including freedom of expression, freedom of speech and maintaining a free and unfettered media. We have no restrictions on business models to be adopted, and there is no pre-censoring of broadcast content. We do not impose any restriction on subscription rates or packaging for pay TV services. As far as possible, we leave it to the market and consumers to make the choice.
These are some of the reasons for Hong Kong being consistently ranked as the worldˇ¦s freest economy by the US-based Heritage Foundation and the Fraser Institute in Canada. We also earned top spot in CASBAAˇ¦s recent study on pay television regulation in the Asia-Pacific region.
Currently about 17 international and regional broadcasters operate from Hong Kong, providing some 200 satellite television channels targeting viewers across the Asia-Pacific region. Locally, our seven million people can receive over 300 television channels offered by our two domestic free TV licensees and three pay TV licensees.
The Government's light-handed approach to regulation has helped to establish Hong Kong as a broadcasting hub in Asia.
Ladies and gentlemen, the theme of this year's Convention is "Extend Your Reach". For Hong Kong, this is a two-way street. On the one hand, we are constantly reaching out to new markets in Asia and around the world. On the other hand, Hong Kongˇ¦s great strength is its unrivalled accessibility to the vast markets on the Mainland of China.
Companies aspiring to enter the China market can take full advantage of Hong Kong's experience, contacts and knowhow in doing business across the boundary. We have modern hard and soft infrastructure connecting Hong Kong to the Mainland, including world-class IT, professional services and deep cultural ties. We know what it takes to do business in the Mainland. And nobody knows it better than we do.
We also have a unique free-trade agreement with the Mainland, called the Closer Economic Partnership Arrangement, or CEPA. Many of you will be familiar with the benefits of CEPA in gaining preferential access to markets in the Mainland. Still, there are some important aspects of CEPA that bear repeating today because they help to extend our business community's reach across the boundary.
CEPA is an ongoing commitment between Hong Kong and the Mainland to break down barriers to trade, services and investment. CEPA has been expanded each year since it was first signed in 2003, with the latest arrangements coming into force only last month.
Currently 42 services areas are covered under this free-trade arrangement, including information technology, telecommunications services and TV and film production.
The film industry is a good example of CEPA at work. Under CEPA, films jointly produced with the Mainland are regarded as Mainland productions. They are not subject to the usual quota restrictions in terms of distribution on the Mainland. With this edge, we have seen substantial growth in the output, scale and box office receipts of Hong Kong-Mainland co-productions. Of the top 10 box office hits in the Mainland last year, six were Hong Kong-Mainland co-productions.
It is important to remember that CEPA is nationality-neutral. All Hong Kong companies, regardless of nationality, including overseas firms incorporated in Hong Kong, can enjoy the full benefits of CEPA. I encourage you to look into ways CEPA can help your business tap the Mainland market.
Ladies and gentlemen, Hong Kong will continue to provide the best possible environment so that cable and satellite firms like yourselves can extend their reach in our region and embrace the latest innovations.
We have a light regulatory touch, free and open society and a high degree of accessibility to the markets on the Mainland of China.
We are also pleased to be the home base for CASBAA and to be hosting this Convention for the seventh year in a row. So it only remains for me to wish you all another successful Convention, and a very enjoyable stay in Hong Kong.
Thank you very much.
Ends/Wednesday, November 4, 2009
Issued at HKT 11:49
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