HONG KONG, Nov.28 /Xinhua-PRNewswire/ -- DVN (Holdings) Limited ("DVN"
or "the Group", HKEx: 0500) is pleased to announce that its wholly-owned
subsidiary ("DVNS") has entered into a non-legally binding letter of intent
("LOI") with Nanchong City Broadcasting TV Network Transmission Centre
("NCBN") of Sichuan, to establish a joint venture company to develop the
digital broadcasting business in Nanchong City, Sichuan of the People's
Republic of China ("PRC").
According to the LOI, both parties intended to set up a joint venture
("JV") with DVNS owning up to 49% stake and NCBN taking the remaining 51%
stake. It is intended that DVN will be responsible to provide the platform
and equipment for the integration of digital broadcasting in such network
while NCBN will inject the relevant rights of the network and equipment.
NCBN will also be responsible to procure the JV to become the exclusive
operator to provide digital broadcasting and related services to Nanchong
City and obtain all approvals from the relevant government authorities.
Mr Terry Lui, CEO of DVN said, "DVN will be compensated for its sales of
its digital set-top boxes (STBs) to the cable operators and end-users by
having a share to the monthly subscription fee paid by the end-users. The
Group will also get a share of the profit generated from value-added
services (VAS). NCBN will be benefited from this arrangement since neither
themselves nor their subscribers will have to pay the upfront for the
equipment and services. There is also a potential Average Revenue Per Uses
("ARPU") upside from the introduction of premium Pay-TV content and VAS."
Terry continued, "This innovative business model creates win-win
partnerships between DVN, NCBN and the cable TV subscribers in Nanchong,
driving the roll-out of digitalization."
The details of the LOI will be finalized upon the signing of the formal
agreement.
Commenting on future development, Terry stated, "DVN will continue to
develop its digital broadcasting business in other provinces with similar
business models and will continue to strengthen its capital base and
financial position, in order to facilitate its rapid roll-out of TV
digitalization in China."
Recently, Nanchong has a population of approximately 7,300,000 with
400,000 cable TV subscribers and it has network coverage of at least 800,000
households in various counties, implying an ample market room for growth.
The entire Nanchong has completed converting its cable networks to fully
digital-, broadband- and interactive-enabled, providing crucial
infrastructure for full digitalization. In 2004, Nanchong municipal has
appointed the city to build, execute and operate digital cable broadcasting
platform. Nanchong is now the only digital TV operator in the municipal
region.
DVN is the leading provider of digital TV broadcasting systems
integrator and terminal products in China. It has installed more than 40
digital broadcasting systems, with its patented products extensively
deployed. In 2005, DVN cooperated with the Qingdao City Radio and
Television Bureau to migrate the entire city to digital, building the
first "model city" in digital broadcasting in China. DVN also scored
success in shifting Foshan to digital broadcasting. In 2006, DVN achieved
further success in migrating Guangxi to fully digitalized and making Guangxi
the first "digitalization model" at a province level. DVN's STBs has
received license from China's State Administration of Radio Film and
Television ("SARFT") and are widely adopted in the China market.
In June 2006, DVN announced a strategic agreement with a wholly-owned
subsidiary of CITIC Group ("CITIC"). CITIC will acquire 25% stake in DVN,
thereby becoming DVN's largest shareholder. The agreement gave DVN an order
of a minimum of 6,000,000 STBs and numerous channels for valued-added
services.
In July 2006, the Group entered into a supplemental agreement with
Motorola (China) Electronics Limited ("MCEL"), its second largest
shareholder, to purchase specified amounts of STBs from MCEL ending 31
December 2009. Also, the terms of the Non-exclusive Distributor Agreement
signed with MCEL has extended to 31 December 2009.
About DVN
DVN (Holdings) Limited (SEHK: 0500) is the largest digital TV
broadcasting systems integrator and terminal products provider in China. It
operates R&D and after-sales services centres in Shenzhen, Shanghai, Suzhou
and Guangxi in China. It has so far installed more than 40 digital
broadcasting systems, with its patented products extensively deployed. On
the back of its digital TV broadcasting platform, the company is now seeking
to develop and roll out a range of value-added solutions, including e-
government, TV commerce, online games and TV SMS services. DVN scored
digital cable success in Qingdao, Foshan, Guangxi and Hunan etc. These
cities are named the "digitalization model" of China by the China's State
Administration of Radio Film and Television ("SARFT").
In June 2006, DVN announced a strategic agreement with a wholly-owned
subsidiary of CITIC Group, China's leading investor in cable operators in
the PRC. CITIC will acquire 25% stake in DVN, thereby becoming DVN's
largest shareholder. With the rapid growth in the digital STB industry in
China, the CITIC deal will likely provide DVN orders of at least 6 million
STBs as well as the opportunity to participate in value-added service
opportunities in their territories.
DVN's set top box (STB) is well recognized in China for its quality and
extensive usage. A nationwide survey report conducted by the Academy of
Broadcasting Science, SARFT of China ranked it the most widely adopted STB
by TV operators in the country in 2002. In 2004, DVN received the "Best Set
Top Box" award in the first Digital TV Public Survey, as well as a "Top
Quality Brand" honour in the STB category in the first China Consumer
Products Quality Survey. In 2005, DVN was further named by SARFT as one of
the country's "Top Ten Broadcasting Enterprises". In 2006, DVN and Mr. Lui,
DVN's CEO, were awarded prizes for being leading innovators in the
broadcasting industry. Based in Hong Kong and listed on the Stock Exchange
of Hong Kong in 1989, DVN has been operating in the technology sector since
1982.
For further information, please contact:
DVN (HOLDINGS) LIMITED
Sam Wong
Tel: +852-2585-7295
Fax: +852-2511-5522
Email: samwong@dvnholdings.com
Website: www.dvnholdings.com
Synchronic Communications Limited
Avan Fung / Lina Chan
Tel: +852-9633-4904 / +852-9228-6570
+852-2136-8188
Fax: +852-2136-8192
Email: avan@synchronic.com.hk / lina@synchronic.com.hk
Website: www.synchronic.com.hk
