DVN (Holdings) Limited, a Chinese provider of digital cable TV services, today announced that it has entered into a contract for the sale of digital TV broadcasting platform to Hunan Network, valued at more than HK$10 million.

This represents the second major contract won by DVN in 2004. In early January, DVN announced a 600,000 set top box contract with Qingdao Broadcasting Bureau. In the Hunan contract, DVN will supply 200,000 digital TV receivers (also known as set top boxes) to Hunan Network. Pilot testing of the front-end particulars of digital broadcasting in Hunan was completed earlier this month. With the progressive installation of set top boxes, it is expected that digital TV broadcasting will be extended to the majority of the province within this year.

There are 14 major cities in Hunan with a population of 3 million Cable TV users. With digitalization, the number of digital TV channels available to subscribers will increase to about 80 channels, including seven professional channels on movies, drama series, lifestyle trends, etc. Changsha, the provincial capital of Hunan, has taken the lead, launching advanced digital broadcasting in mid-2003. Shaoyang, another major city, launched digital services on January 9, 2004. Altogether there are approximately 10,000 digital TV users in both cities, with the number of subscribers growing rapidly.

Towards the end of last year, China's State Administration for Radio, Film and Television ("SARFT") announced its target for full digitalization of TV broadcasting by 2015. Hunan is to be one of the pilot provinces/cities to rollout digital services in China. It is because of DVN's success in rolling out digital services in numerous locations throughout China that Hunan selected DVN as its strategic partner. The strategic partnership between DVN and Hunan Network extends beyond the provision of digital broadcasting technology and software support. Both parties will leverage on their relationship to provide value-added services on the digital TV platform, including electronic government, business, finance, online games, SMS and e-banking.