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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 2013 this morning (October 22):
Marcel (Fenez), Distinguished Guests, Ladies and Gentlemen,
Good morning everyone.
It is a great pleasure for me to join this year's CASBAA Convention and to welcome our friends from around the region.
This annual Convention has become part of our city's broadcasting tradition and marks its 10th anniversary this year. This is my fifth CASBAA Convention as Financial Secretary and eighth in all. Each year the event seems to grow from strength to strength. I missed last year's event due to a last-minute scheduling change, but to borrow a popular phrase on TV: "I'm back!".
The enduring success of this annual Conference reflects the nature of the industry in our region. The Asia Pacific is the largest pay TV market in the world. A recent report by UK-based Digital TV Research found that Mainland China overtook Japan last year to become the second largest market, behind the US. The same report, estimates that pay TV revenue in the Asia Pacific region will grow by US$12 billion by 2018.
All this points to rapid "change on the air" here in Asia. This Convention is a great opportunity for the industry to take stock of the rapid developments and take a glimpse into the future.
Allow me to take this opportunity to share with you some of the recent developments and trends in Hong Kong's broadcasting landscape.
Just last week, the Hong Kong SAR Government awarded in principle two new free-to-air television licenses, taking the total number to four. This will change the landscape of terrestrial TV broadcasting industry in Hong Kong and will bring more choices for consumers.
Another development is the analogue-to-digital migration of our free-to-air terrestrial TV broadcasting. In the five years since we launched digital terrestrial TV (DTT) in Hong Kong, the coverage now reaches almost 99 per cent of our community. The penetration of DTT continues to grow at a satisfactory rate, with more than 80 per cent of our households already enjoying the greater programme variety and better picture quality of DTT.
People in Hong Kong can now choose from over 400 TV channels offered by free and pay TV licensees. The three domestic pay TV licensees provide a total of 390 channels, a 9 per cent increase over last year. They also offer a total of 52 High Definition (HD) channels – more than doubling the 23 HD channels we had last year.
Currently there are 18 non-domestic TV programme service licensees, providing over 200 satellite TV channels for the Asia Pacific region. There are now over 500 such free-to-air satellite TV channels available for reception in Hong Kong.
This is largely because we have adopted a so-called "open sky" policy. This enables homes to receive unencrypted satellite TV programme channels uplinked from Hong Kong and elsewhere.
Last year, our four audio broadcasters launched digital audio broadcasting or DAB. Together, they currently provide 16 DAB programme channels, which will be increased to 18 by next year. This is more than double the number of analogue radio channels currently available.
We are continuing to address new media trends that people rely on to keep themselves informed, entertained and on the move. This brings me to my next topic of mobile communications.
With the growing connection between broadcasting and telecommunications, the picture would not be complete without an account of mobile and broadband developments in Hong Kong. Our mobile penetration rate, at over 230 per cent, is among the highest in the world. The popularity of smartphones has dramatically boosted mobile data consumption. Mobile data services continue to be the principal engine of market growth.
Out of the record-high 16.8 million mobile subscribers in Hong Kong, more than 11 million are 3G and / or 4G service users. As of July this year, mobile data usage in Hong Kong surged to over 10,000 Terabytes, which was 1.7 times the amount recorded over the same period in 2012. The provision of 4G LTE (Long Term Evolution) services has greatly enhanced the user experience and offered a variety of innovative and high-speed mobile data services for consumers to choose.
To facilitate the healthy development of the mobile service market, the Hong Kong Government makes radio spectrum available to interested parties through auction from time to time. We auctioned off 90 Megahertz (MHz) of radio spectrum in the 2.3 Gigahertz (GHz) band last year, and an additional 50MHz of radio spectrum in the 2.5 and/or 2.6GHz band early this year. With the additional spectrum, operators will have the necessary network capacities to further develop 4G services.
Broadband access to various applications and content services is becoming part of everyday life. With a household penetration rate of 84 per cent, broadband subscribers enjoy speedy services of up to one Gbps. Hong Kong's broadband service has an average peak connection speed of 63.6 Mbps. That makes it the fastest in the world according to the "State of the Internet 1st Quarter, 2013 Report" published by Internet content provider Akamai in July. There are more than 10,000 public Wi-Fi hot spots across the city, and the number continues to grow each year.
These developments underscore Hong Kong's status as a broadcasting and communications hub in Asia.
The changes and developments I have just mentioned underline the government's strong commitment to providing the best environment for developing our broadcasting industry, not least for cable and satellite companies. Hong Kong continues to adopt a light-handed, market-oriented and liberal regulatory approach. We continue to promote free flow of information. We do not pre-censor broadcast content or impose restrictions on the business models to be adopted by our broadcasters. Freedom of expression is a core value that we always cherish.
We are acutely aware of the close relationship between the broadcasting and telecommunications markets. This has posed new challenges to regulators around the world. Last April, we restructured our regulatory arrangements by establishing a Communications Authority (CA). CA serves as the unified regulator for both the broadcasting and telecommunications sectors.
CA is an independent statutory regulatory body combining the functions previously performed by its predecessors, the former Broadcasting Authority and Telecommunications Authority. Its main mission is to enhance Hong Kong's position as a communications hub for the region, encourage innovation and investment in the communications market, and promote competition and adoption of best practices.
We firmly believe that the cornerstone of success amid keen competition is creativity. This is particularly the case for the broadcasting industry.
The Hong Kong Government spares no effort in providing support measures to promote the development of our creative industries and stage events that reinforce Hong Kong's creative potential. In May this year, we injected an additional HK$300 million into the CreateSmart Initiative which helps fund the development of our creative industries.
Since 2009, about 150 programmes have received funding for key areas, namely, nurturing talent, facilitating start-ups, exploring new markets and fostering a creative environment in Hong Kong. CASBAA's Community Outreach Programme is among the beneficiaries.
We also have a unique free trade agreement with Mainland China called CEPA. Among other things, CEPA's liberalisation measures create opportunities for Hong Kong filmmakers and cinema operators to access the huge Mainland market.
Under CEPA, films jointly produced by Hong Kong and the Mainland are treated as Mainland China productions. These co-productions have enjoyed tremendous box office success. Last year, seven of the Top 10 box office Chinese language movies in the Mainland were Hong Kong-Mainland co-productions.
Hong Kong service suppliers are also able to operate cinema theatres in the Mainland on a wholly-owned basis under CEPA. I encourage you to take advantage of CEPA in exploring the vast business opportunities in Mainland China.
Ladies and gentlemen, this annual Convention has become a signature event for the cable and satellite broadcasting sector. Now in its 10th year, it continues to enjoy an excellent reception from industry players.
I wish CASBAA a successful Convention 2013 and our visitors an enjoyable stay here in Hong Kong.
Thank you very much.
Ends/Tuesday, October 22, 2013
Issued at HKT 09:50
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