Microsoft TV platforms for Chunghwa

2 May 2008

Taiwanese telecom provider Chunghwa Telecom hopes to reach agreement with Microsoft for its Microsoft TV (MSTV) platforms for its movie-on-demand (MOD) service. Licence royalties and the maintenance charge are proving a sticking point with the Taiwanese telco which says Microsoft’s fees are too expensive. Microsoft is asking for USD41 per subscriber for licensing royalties leading to an estimated total of TWD1.5 billion (USD50 million) on expectations of around 1.5 million subscribers. Chunghwa currently pays an 8% maintenance charge on its existing OMP platform but Microsoft is asking for 25%. Chunghwa has asked Microsoft to prove that its MSTV platform can provide more services than OMP, ATM and Karaoke. In total, the deal is likely to cost Chunghwa around TWD2 billion. Industry watchers estimate Chunghwa will invest around TWD10 billion in MSTV over the next three years and collaborate with Microsoft to boost the Internet Protocol TV (IPTV) market in the face of mounting competition from cable TV operators pushing for digitised services. If all the problems can be resolved the contract should be finalised by June.

Taiwan, Chunghwa Telecom