Hong Kong's leading broadcaster TVB has denied reports that it is pulling out of the local pay-TV market by dropping plans to launch its $640m (HK$5bn) Galaxy Satellite Broadcasting platform.

According to a report in Hong Kong daily, the South China Morning Post, TVB board members, led by chairman Sir Run Run Shaw, have decided to scrap the service because of a lack of interest from other investors and a harsh regulatory framework. Galaxy's licence requires it to find an investor to take up a controlling stake in the company to ensure that TVB does not dominate the pay-TV market as well as free-to-air broadcasting.

However TVB claims it is pressing ahead with the service.
Galaxy is working hard on plans to go ahead with its launch and is having active discussions with potential partners,
said TVB controller of programming and external affairs Stephen Chan.

Hong Kong's government handed out five pay-TV licences in 2000 in an attempt to liberalise the market currently dominated by i-Cable Communications. Two licensees - Star TV and mainland China-owned Hong Kong Network TV - have since decided to scrap proposed services. Of the remaining entrants, Taiwan-based Pacific Digital has postponed its full roll-out, while UK-owned Yes Television launched in February despite losing its main backer, Hong Kong utilities giant CLP Holdings, only weeks before.