While the propensity to subscribe to a SMATV service is influenced by many factors, we estimate that the significant ones include (1) household income, (2) willingness to pay initial installation costs, (3) complexities in securing multiple owner action, (4) control of large numbers of buildings by a few owners/ managers and (5) possible equity arrangements between property owners and SMATV operators. With these factors in mind we estimate SMATV penetration by complex size as follow:
Category A
50% of 338,700
Category B
15% of 381,500
Category C
15% of 341,000
169,350
57,225
51,150
277,725
2.15 This conservative estimate of residential units
subscribing to SMATV represents approximately 20% of the estimated 1.4 million currently serviceable units in Hong Kong:
277,725 1,400,000
=
19.8%
2.16 This 20% market share would be achieved quite rapidly
and would remain steady for a period of time until cable service becomes available. This SMATV market share would be maintained by the existence of exclusive contracts between property owners and SMATV operators and by disinterest in switching by those subscribers who will be satisfied by the first programming (even of lesser quality) available to them. We have estimated that SMATV's market share will remain at a minimum of 6% even when cable service is universally available. This is a very conservative estimate; probably the outcome would be no decline in SMATV market share.
2.17 We attach as Appendix 1, a graph depicting the level of
SMATV market share as estimated above, and the cable market share with and without SMATV. Appendix 2 translates SMATV and its impact on cable into a subscriber count graph. Appendix 3 shows cable subscribers with and without SMATV competition.
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