China: China Netcom working with Optibase and PCCW

China is a huge potential IPTV market. Norson Telecom Consulting predicts the number of IPTV subscribers in China will reach 12 million by 2009. China currently has 400 million TV sets, 330 million TV users and 110 million cable users. IPTV equipment provider Optibase Ltd is already working with one of the biggest Chinese telcos, China Netcom Corp. Ltd. China Netcom are also now working with PCCW who provide IPTV services in Hong Kong.

Optibase Enables Commercial IPTV Services in China March

Optibase, Ltd., a provider of advanced digital video solutions have announced (May 2005) that the Company’s MPEG MovieMaker 400 encoders are enabling TV over IP to the home streaming services in the Tangshan metropolitan area in China.

The Tangshan metropolitan area serves over 50,000 ADSL, Cable and optical LAN subscribers. In order to provide these subscribers with enhanced content, Tangshan Netcom and the Broadcast Television Authority have built a sophisticated TV head-end solution that will enable access to live and foreign television content as well as interactive services.

The video head-end solution, which will enable triple play services (Voice, High-speed Internet and Video), will deliver dozens of live video channels and video-on-demand over an IP network designed to reach all of Tangshan’s metropolitan subscribers.

The solution includes compression, broadcast and on-demand-and-management servers. The video feed is received from satellite, encoded into MPEG-4 using Optibase’s MPEG MovieMaker 400 encoder and transmitted over a separate ADSL line. This service allows subscribers to enjoy unlimited access to video-on-demand services using both televisions and home computers on the receiving end.

"We are delighted to have a fully deployed MPEG-4 streaming system serving the residents of Tangshan," said Uzi Breier, CEO of Optibase. "While many of our MPEG-4 streaming projects in China are still in their trial period, we are delighted that Tangshan Netcom has passed that phase and is now providing these advanced services on Optibase platforms to generate revenue."

To find out more please visit http://www.optibase.com

China Netcom Group and PCCW form strategic business alliance
China Network Communications Group Corporation ("China Netcom Group"), one of China's major telecommunications companies, and PCCW Limited ("PCCW"), the leading communications provider in Hong Kong, have announced a strategic alliance to jointly develop their respective businesses in mainland China and internationally (January 2005).

China Netcom Group has agreed to pay approximately US$1 billion (HK$7.9 billion) in cash, at HK$5.90 per share, for a 20 percent stake in the enlarged share capital of Hong Kong-listed PCCW Limited. China Netcom Group will acquire its stake in PCCW by subscribing to 1,343,571,766 new shares.

China Netcom Group intends to be a committed investor in PCCW, participating with existing management in shaping the future strategy of the company, through membership of the Board of Directors and existing Board and management committees.

As part of the agreed transaction, and subject to PCCW shareholder approval, China Netcom Group will nominate directors to three new seats on the board of PCCW. Furthermore, one of the three will also become a Deputy Chairman of PCCW. With these new appointments, both PCCW and China Netcom Group believe that the appropriate representation is in place to maximize value for all shareholders.

In order to take advantage of the high development potential in the PRC telecommunications industry, PCCW will earmark up to HK$5 billion to pursue opportunities in China in the telecommunications area and set up a PRC Business Development Committee, which will be comprised of two nominees each from PCCW and from China Netcom Group.

Mr. Zhang Chunjiang, General Manager of China Netcom Group said: "...we believe that with PCCW being the leading telecommunications operator in Hong Kong, its advanced management system, its professional management team and operation experience in highly competitive markets will enable China Netcom Group to accelerate innovations in our business management and enhance our marketing expertise."

PCCW Chairman Richard Li said: "The main purpose of this strategic relationship with China Netcom Group - a major Chinese state-owned telecommunications company and a broadband leader is to create long-term value for our shareholders through actively pursuing new business opportunities."

"This transaction will lay the foundation for PCCW to participate in the high potential and fast growing telecommunications market in China. At the same time, the capital injection will further strengthen our financial fundamentals," Mr. Li said.

This share purchase is subject to the approval of PCCW shareholders. The date for an Extraordinary General Meeting will be announced in due course.

For more information please vist http://www.pccw.com or http://www.chinanex.com