China’s film, radio and television authority is to issue IPTV licenses in the coming months. Telecommunications operators China Telecom, China Netcom and China Unicom are already testing the service. "Once the license is available, we will start the service," said a China Netcom source. China Telecom, one of China's major telecommunications operators, announced that it plans to launch large-scale promotion of Internet Protocol Television (IPTV) in 2005 on its broadband website.

IPTV is not simply a way of accessing internet content through a TV screen. It is a new medium that streams a huge choice of video and audio content into homes. For existing TV stations, it’s a possibility to greatly expand their influence around the world, while non-TV media units will have the opportunity to enter a business with a very low-cost.

Wang Liang, head of the Beijing People's Broadcasting Corporation, said: "There is a huge potential for IPTV. There are limited channels for both television and radio, whereas the space for internet television is endless. Unlike television stations we do not need big television cameras: a family-use digital camcorder will work."

In China, the country has been playing leapfrog with western technologies by going straight from radio to IPTV, almost missing out traditional television altogether. It is cheaper to use China’s mushrooming number of internet connections than it is to build cable TV networks.

At present, there are 94 million Internet users in China, according to the January CNNIC report. That represents an increase of 18.2 percent, or 14.5 million new Internet users, since January 2004 when CNNIC reported that China had 79.5 million Internet users. Many believe the number of people logging onto the Internet in China will overtake the US within three years.

IPTV will not just be limited to television stations but will bring computer games to the television. Nasdaq-listed Shanda Interactive Entertainment, China’s biggest online game operator, has plans to enter the IPTV market later this year. Shanda has been carrying out research into IPTV for more than a year. According to CEO Chen, Shanda has held discussions with all major TV set makers in China and have signed an agreement to work with Intel to manufacture IPTV Set-Top Boxes.