Star TV Faces Disputes in Indonesia, H.K.

5/02/1999 8:00 PM Eastern

Hong Kong -- Star TV is fighting legal and regulatory
battles on two fronts, as its dispute with Indonesian direct-to-home platform Indovision
continues and it tries to roll out digital transmissions here.

A judge in Jakarta, Indonesia, issued an injunction against
the News Corp.-owned satellite-TV platform that effectively bars it from allowing its
channels to be transmitted by any Indonesian pay TV provider.

Separately, Star TV has appealed to Hong Kong's
Telecommunications Authority to end a dispute with satellite-master-antenna-television
(SMATV) installer Rediffusion Satellite Services. Star TV said Rediffusion -- which is
owned by Wharf Holdings Inc., the parent of pay TV monopoly Cable TV -- has delayed the
installation of digital receivers.

The Indonesian injunction was brought by PT Matahari Lintas
Cakrawala (Malicak), which operates Indovision. Star TV dissolved a four-year-old
management and channel-provision agreement with Indovision in December, after a number of
disputes with the company. Malicak countered with a $60 million lawsuit in January.

"We have been taking legal advice at the moment, but
up to now, we have only received court documents after a hearing," a Star TV source
said. "So we have not taken any active part in these proceedings yet. There are some
outstanding issues that need to be resolved."

In Hong Kong, Rediffusion general manager Anton Li denied
that he was holding up the digital-receiver rollout. "Some clients" had the
boxes installed, and others were about to, he said, but he would not give any more
details. Li said he was "surprised" by Star TV's comments.

Star TV CEO Gary Davey said 653 Pace Micro Technology Asia
Ltd. boxes had been sold by his company at $452 each. This covered about 220,000 of the
estimated 300,000 homes that are able to receive Star World. About 90 percent of the
remaining 80,000 homes are served by Rediffusion equipment.

Star wants the digital receivers installed so that homes
can receive its Star World channel after it is converted to digital from analog Friday
(May 7).

In built-up Hong Kong, a building or estate-management
company signs up for one SMATV provider to service the apartment block or estate, which
could cover thousands of individual homes.

"What is going on with the behavior of Rediffusion is
a disgraceful misuse of a unique position in this market," Davey said. "If
something cannot be done about this, Hong Kong is destined for the digital dark

Of longer-term concern to Star TV is the fact that after
June, the government is likely to allow channel providers to charge for programs delivered
to SMATV homes. Failure to have interconnections to all of Hong Kong's satellite
homes would cut into Star TV's market for its planned subscription services.

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