TNAG-0350-FCO40-386-Future-of-broadcasting-in-Hong-Kong-1972 — Page 108

CONFIDENTIAL

3. Mr Dennis then went on to speak about the financial position of RTV(HK). He said that the existing service was operated under a licence due to expire in April 1973 but it was already barely breaking even and would be run at a loss certainly from the beginning of 1973. It now seemed unlikely that the call for tenders could be put gut before/November 1972. Depending on the time allowed for submission of tenders the situation was likely to be:

(3 months for

tenders)

6 months for

tenders)

Tenders issued

Tenders in

Decision on award of licence

Issue of licence following detailed negotiation

Nov/1972

Nov 1972

Feb 1973

May 1973

Aug

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73

Nov 1973

Nov 1973

Feb 1974

4. As far as new equipment was concerned it would take RTV(HK), if they won a licence, 10 months to get orders placed, the equipment built and their programme on the air - say about August 1974. For a company starting from scratch, which did not have the studios etc which/RTV(HK) had, he thought it might take until mid 1975. He gave these dates to show what a difficult position RTV (HK) would be in if the company were obliged to consider running/at a loss over the period April 1973 to the completion of the tendering process at the end of 1973 (assuming that its licence could be extended) but with no certainty that it would get a new licence; even if the company then secured a new licencé it would be operating at a loss till the new service begán. He gave confidential figures for estimated losses in such circumstances to the end of 1973 and 1974 respectively - acopy of the piece of paper he gave us is enclosed.) If, of course, RTV(HK) had a guarantee that they would get a further/licence they could put in their orders for new equipment now and they would be on the air as soon as their new licence was issued. But they could not be expected to bear continuing losses, with no certainty of getting a new licence, or to order equipment on a hypothetical basis.

5%

As he was leaving Mr Dennis added that they had heard another rumour that the Government was considering extending RTV(HK)'s licence for a year or two. RTV(HK) had not been consulted about this, but from what he had said to us and from the figures he had given us we would see that this was a wholly unattractive proposition, likely to cost them about £1.5 million with no guarantee of a new licence.

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2.

CONFIDENTIAL

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