Gehua, ICBC Form Alliance

Beijing Gehua, a leading cable operator with 3.8 mil. subs in Beijing, including ~2.5 mil. digital TV (DTV) users, has entered into a strategic alliance with the Industrial and Commercial Bank of China (ICBC) in Beijing.
 
ICBC will provide Gehua with a RMB2 bil./US$293 mil. loan to support future development, and will work in collaboration with Gehua to develop a DTV payment system to enable two-way transactions over Gehua's digital cable network. Longer term, if the transactional services prove successful, both parties will look to issue bank cards.
 
The move heralds the start of something promising, in line with State Council's decision to accelerate network consolidation.
 
However, Gehua needs to accelerate demand for its digital pay-TV services first (as opposed to utility DTV) which has proved challenging. The company will need to invest significantly in capEx towards two-way network upgradation before transactional, on-demand and personalized services have a foundation to take off.