A potent pay-TV rights buying force emerged in Taiwan this week after two of the country's most powerful communications groups announced they would combine to launch a $200m digital TV joint venture.

The new company is to launch by the end of the year or early 2001 with equal investment from Taiwanese cable operator Eastern Multimedia and wire maker and communications investor Pacific Electric Wire & Cable. Along with tiered pay-TV services, the joint venture is to offer TV commerce and shopping, plus other interactive features such as TV email and computer gaming.

The partnership is expected to lead to a flurry of TV activity in the region as Eastern Multimedia and Pacific Electric square off against GigaMedia, the Nasdaq-listed Taiwanese internet media company which has announced a joint venture with News Corp to develop interactive TV. Gigamedia, part of the Koo's Group, is now likely to seek new allies after it pulled out of a proposed joint venture with Pacific Century CyberWorks of Hong Kong in September.

Pacific Electric is also eyeing the broader Asian market and recently secured a Hong Kong pay-TV licence. The Taiwanese venture is scheduled to launch test digital broadcasting to one million cable subscribers in Taipei early next year, with international investment to be sought through a listing on the Nasdaq or elsewhere.