They cannot both be right. On the one hand, Television Broadcasts (TVB) says it's now ready to pull out of Hong Kong's pay-TV market, joining two other companies that have already abandoned the highly competitive Chinese harbour colony, Rupert Murdoch's STAR TV and also the Hong Kong Network (NETV).

On the other, Richard Li's struggling Pacific Century CyberWorks (PCCW) announced that it expects to switch its Network Of The World (NOW) channel from a free service to one paid for through subscriptions, joining the UK-based Yes Television and Taiwan's Pacific Digital Media as the only two remaining pay-TV players. What's going on here'

Well, from the perspective of TVB, which operates Galaxy Satellite Broadcasting, the conditions imposed upon its licence by the Hong Kong Government are simply too onerous. In particular, it objects to being forced to wait 18 months after other competitors before being able to roll out a service.

With this in mind, TVB says it will not proceed with a $150m capital raising exercise and nor will it pay over a $88m performance bond to the government - a decision that is likely to lead to its pay-TV licence being revoked.

PCCW, on the other hand, sees subscription revenues as the only answer to its financial woes that have sent share price deeper into the toilet. "Scale-back is our philosophy," said Li, referring to the change of direction at NOW. "We expect advertising revenues will be scarce, or nil. Wherever it is possible, it will be a subscription-based and encryption-based service." Li does have the advantage of owning carriage systems of his own. But the broadcaster is a curious beast at best; it may be ahead of its time in that it is an Internet Protocol-based system, but it also has looked old fashioned in running a mainly English-language service. Li has since opened content production centres in London, Japan, Hong Kong and India. But if the Hong Kong market proves too small, he may never need them.