Jane Chen / Shanghai Daily news

Shanghai Media Group has become the nation's first licensed Internet Protect Television (IPTV) provider after receiving a business license from the State Administration of Radio, Film and Television, the Shanghai-based Oriental Morning Post reported.
The television industry watchdog will issue a formal document announcing the licensing and specifying the IPTV business scope "after a few days", said the same Oriental Morning Post report, quoting sources close to SMG.
Industry analysts regard this issuance as a signal of the beginning of cooperation between the country's TV and telecom sectors, because IPTV providers will have to distribute TV programs to television sets via the existing broadband Internet networks. Previously, as ruled in the country's 1999 No.75 document, the two sectors were banned from intersecting.
Both TV companies and telecom operators are eager to enter the Internet TV business, attracted by China's huge broadband market.
China Network Communications Group Corporation, operator of China's second-largest fixed-line telecommunication network, invested 50 million yuan (US$6 million) last year to create Jiuzhou Online Co Ltd to provide video-on-demand service online.
China Telecom also launched its Internet television Website Chinavnet.com in 2003 to boost its value-added business.
Though the telecom operators are excluded from the first group of two IPTV license receivers -- an affiliated unit of China's central TV station CCTV is reportedly obtaining the other of the first two licenses - telecom firms do not seem upset by this move.
Telecom firsms will be able to share the market by cooperating with TV makers because they are an essential partner in the  IPTV business, the Oriental Morning Post quoted a senior official of Beijing Telecom Corp. as saying.
This year will be the fledgling stage for the IPTV market, said Wang Ying, vice president of Alcatel Shanghai Bell Co Ltd.
She estimated the market will boom in 2006 and 2007, when at least 15 percent of the country's broadband users will watch IPTV.
By 2008, China's IPTV market is expected to jump to 100 billion yuan, while the number of broadband users will expand to 100 million.  Last year, there were 26.3 million broadband users.