It is my great pleasure to present in this Annual Report exciting new developments in Hong Kong's broadcasting landscape and the Authority's role in maintaining a competitive, fair and vibrant broadcasting market.

A Thriving Broadcasting Market

Domestic Free Television Programme Services

Last year marked an historical milestone in the development of terrestrial television in Hong Kong. The two domestic free television programme service licensees, Asia Television Limited (ATV) and Television Broadcasts Limited (TVB), officially launched their respective digital terrestrial television (DTT) services on 31 December 2007, comprising digital simulcasts of the four existing free-to-air channels together with new digital programme channels. ATV has launched five new standard definition television (SDTV) channels, namely "aTV" News & Business Channel, His TV, Her TV, Plus TV and CCTV4, as well as the "aTV" HD Channel broadcasting 14 hours of high definition television (HDTV) programmes per week. TVB has launched a new 24-hour HDTV channel called High Definition Jade and plans to launch later this year two additional SDTV channels, J2 and Interactive Information Channel.

The Authority earlier examined and approved the digital programme investment plans of respectively ATV and TVB¹. During the year under review, the Authority took further measures to facilitate the implementation of DTT by revising its Generic Code of Practice on Television Technical Standards and relaxing certain licensing requirements for ATV and TVB on coverage of new digital services. In the interests of providing greater programming diversity to viewers, the Authority exercised its discretion to exempt the licensees from positive programming requirements.

Domestic Pay Television Programme Services

We are pleased to see continued growth in the domestic pay television market in terms of subscription size, programming variety and service development. The total number of subscribers to licensed pay television services increased by 20% from 1 530 000 to 1 840 000. The total number of pay television channels offered by the three domestic pay television programme service licensees increased by 13.4% from 239 to 271 over the previous year.

During the year under review, PCCW Media Limited launched a high definition televison (HDTV) service and other interactive services including the trading of securities via the now Business News Channel and the now shop channel. We welcome the introduction to consumers of innovative new services.

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In 2005, the Authority approved ATV and TVB's plans to each invest more than $400 million for digital terrestrial television in-station facilities and programming in addition to their original six-year plans.

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