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China Mobile pays US$165m to Murdoch firm for stake in Phoenix TV
2006-06-12 02:26:33 THE ASSOCIATED PRESS

HONG KONG, June 12 (AP) -- China Mobile Ltd. said Monday its mainland Chinese parent paid HK$1.28 billion (US$164.9 million, €130.6 million) to Rupert Murdoch's media company STAR Group Ltd. for 19.9 percent stake in Hong Kong-listed Phoenix Satellite Television Holdings Ltd.

The companies announced the deal last Thursday but didn't say at that time how much China Mobile Communications Corp. paid for the stake.

STAR Group retains a 17.6 percent stake in Phoenix Satellite, a Hong Kong-listed, Chinese-language broadcaster known for its news programming.

The Chinese government has treated Phoenix Satellite as a foreign broadcaster because of its Hong Kong base and News Corp. parentage, and hasn't allowed it to increase its distribution in China beyond "special compounds," such as luxury hotels and government buildings. The new arrangement gives mainland interests control of the company.

China International Capital Corp. analyst Yu Jin said in a report that Phoenix Satellite, which has long been seeking to broadcast nationwide in the traditional satellite TV sector without success, is unlikely to be allowed to broadcast over China Mobile's network in the near future.

Jin said mobile television is strictly regulated by the State Administration of Radio, Film, and Television, and only three licenses have been awarded so far.

"Without a license, no broadcaster may integrate or transmit video programs over handsets," Jin said. "We don't expect the acquisition to fundamentally change Phoenix TV's operation or growth profile in the foreseeable future."

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