Celrun Co., Ltd., the IPTV specializing company, has announced on 4th day, that it determined to enter into Chinese IPTV service market through the supply contract with Totyu Japanese to supply IPTV solution.

Celrun has attempted the change to diversify the profit model by developing the IPTV-based solution so far. In the result, it will provide the IP set top box, Head-end solution in form of license to Totyu Japanese. In reward to this event, Celrun permanently secures the royalty equivalent to 2% of China’s IP set top box sales revenue and the royalty equivalent to 2% of IPTV service revenue, respectively for 2 years, guaranteed regardless of business success or failure by Totyu Japanese.

As the software company headquartered in Japan, Totyu is going to proceed the IPTV service business in China through its subsidiary. Totyu has agreed to select Celrun as its business partner and to share the profit so that it could be supplied IP set top box, applications, head-end solution technology and know-how required to provide this service.

To proceed this contract, Celrun and Totyu is preparing the service mainly focused on Hangju area in China, aiming at more than 1 million subscribers within 3 years starting the service from this July.

A source from Celrun explains there is no amount due to Celrun because this contract was based on royalty fee and most of it would be realized as the profit. As the contract is based on China, we needed to resolve the expense burdens such as manufacturing cost and tariff duties if we want to directly export the set top box. Therefore, we have elected the method to charge the royalty per one set by providing only set top box software in the form license with the local production.

As for IPTV solution, it will provide s/w only in the license form while the local factory purchases the hardware in the region.