Century Vision Network (CVN)


OVERVIEW

CVN is building a two-way interactive broadband cable television network that supports video, voice and data transmissions. With existing 319 million television households and 80-90 million cable subscribers, China boasts a far higher cable TV penetration rate than telephone lines or PCs*. As such, cable TV is expected to be the most popular choice for the Chinese to go online, with its faster speed, richer content, more secure e-commerce and lower costs. The CVN is being developed using existing cable television networks that are already in operation.

CVN seeks to bring leading interactive technologies, applications and content services to households and commercial users throughout the People's Republic of China (PRC) using affordable next-generation set-top boxes and interactive service applications.

CVN has been forming exclusive joint ventures with the State Administration of Radio, Film, and Television (SARFT)'s provincial and local broadcasting & television industry administrative bodies.

MEETING CHINA'S ACCELERATING DEMAND

China Convergent along with its subsidiaries and joint venture partners are developing a vast broadband multimedia network that can deliver services through television sets via proprietary decoding set-top boxes. Since the television ownership rate exceeds 90 percent of the population in China (TV household penetration is 100%) and personal computer ownership is as low as 4%, and even telephone ownership is only 15%, this delivery channel is viewed as the leading broadband access channel for Chinese consumers. China's existing backbone cable fiber network is well developed with ample capacity to support two-way, interactive multimedia service expansions for subscriber access.

OUR NETWORK

JVs in 10 Provinces and 2 Metropolitan Regions

Until now, in conjunction with China's 12 provincial and city's cable network providers, the Company is developing the Century Vision Network. The Century Vision Network includes joint ventures with cable
networks in 12 major geographic regions (Baoding City is in Hebei Province) in China, representing 1118 cities and counties and approximately 543 million people, or 43.5 percent of the national population**.

The existing subscribers in these provinces and cities have exceeded 40 million and in next ten years the subscribers of broadband interactive cable television will be developed more than 50 million. Through the joint ventures in 12 geographic regions, which include ten provinces of Fujian, Hebei, Yunnan, Shaanxi, Zhejiang, Sichuan, Jiangxi, Shandong, Hunan, Heilongjiang and two cities of Baoding and Wuxi, CVN has exclusive access to over 40 million existing one-way cable subscribers. As these one-way networks are upgraded, CVN will market its data services, video-on-demand and premium programming options to both existing and new cable subscribers.

China Digital Broadcast Joint Venture

In addition to the joint ventures in 10 provincial and 2 metropolitan regions, CVN has a joint venture with China Digital Broadcast Center, an institute enterprise directly under SARFT. The Joint venture - China Digital Broadcast Corporation will (1) establish a digital broadcast platform in Beijing; (2) establish a central information database, storing the classified information from the state, provincial, and city's sources; (3) cooperate with the provincial and city's administrative bodies to establish database sub-centers for exchange and allocation of information between central database center and local television stations; (4) utilize the existing convergent cable fiber network to interconnect the network centers and television stations in provincial and city's level through the country.

New Blue Being Planned for Public Listing in China

New Blue Digital Network Limited, which is owned 97% by CVN and incorporated with the State Administration of Industry & Commerce of PRC, is being planned for public listing in China. In the coming several years, New Blue will invest total 16.6 billion RMB (approximately US$2 billion) in Mainland China to develop, upgrade, and construct the domestic broadband interactive television and multimedia information network. New Blue will soon move to Zhong Guan Cun ("Zhongguan Village") in Beijing. Zhong Guan Cun is the "Silicon Valley" in China.

The Company is making the CVN network open to content developers and international media companies to provide an array of programming options to CVN subscribers. Over time, China Convergent will be developing a full array of business and consumer services as well as hosting and e-commerce applications. China Convergent and its subsidiaries are currently providing broadband technology to their partners to upgrade existing one-way networks to two-way networks.

REGION POPULATION (MILLION)
FUJIAN PROVINCE 32.99
HEBEI PROVINCE 65.69
SICHUAN PROVINCE 84.93
YUNNAN PROVINCE 41.44
SHAANXI PROVINCE 35.96
ZHEJIANG PROVINCE 44.56
WUXI CITY 4.32
JIANGXI PROVINCE 41.91
SHANDONG PROVINCE 88.38
HUNAN PROVINCE 65.05
HEILONGJIANG PROVINCE 37.73
CVN COVERED POPULATION 542.96
NATIONAL POPULATION 1,248.1

ENHANCING NETWORKS & PROGRAMMING

CVN's ability to utilize and enhance existing bandwidth cable television network to support the delivery of their service hosting and exceptional quality programming through set-top boxes will help to fuel the Company's subscriber base growth as it executes its strategy. Through its joint ventures, China Convergent will market its e-commerce, data services, and premium programming options to CVN partner's existing subscribers.

China Convergent's subsidiaries own and develop movies, television programs, video and advertising content that can be played or transmitted on its Century Vision Network. By leveraging its unique joint venture connections, the Company is also attracting foreign strategic partners who alone might be unable to gain adequate access to China's vast market. China Convergent is currently seeking to develop additional connections with Western and Asian content and entertainment providers to offer higher quality programming, a greater variety of movies and other services than currently available from Chinese-based production sources.

REGION EXISTING ONE-WAY SUBSCRIBERS (MILLION)

FUJIAN PROVINCE 3.50
HEBEI PROVINCE 3.00
SICHUAN PROVINCE 5.00
YUNNAN PROVINCE 3.50
SHAANXI PROVINCE 2.10
ZHEJIANG PROVINCE 6.50
WUXI CITY 0.85
JIANGXI PROVINCE 3.00
SHANDONG PROVINCE 5.60
HUNAN PROVINCE 3.40
HEILONGJIANG PROVINCE 3.80
TOTAL CVN JVS' SUBSCRIBERS 40.25 MILLION

 

CHINA TV & CABLE FORECASTS

CHINA MARKET STATISTICS