Finally closing a deal which has been in the making since last October, Star and the Koos Group of Taiwan today announced an agreement to digitise cable systems in Taiwan.

Star's investment in the deal will enable it to obtain an equity interest in the cable systems concerned, a company release says.

The digital rollout plan will commence in the second half of the year and the first digital cable services will be launched in early 2002. Taiwanese cable subscribers will soon be able to enjoy through digital set-top boxes high-quality digital broadcast cable signals, as well as an array of enhanced television functionalities such as parental control and a Chinese-language electronic programme guide, the release states. The digital boxes are also capable of receiving interactive premium channels and e-commerce services.

Chester Koo of the Koos Group said: "The penetration rate of Taiwan's cable TV is among the highest the world over - 80 per cent of Taiwanese households have cable TV. ...This partnership between Koos Group and Star is also a manifestation of the recognition we have been receiving from international media groups."

Star chairman and CEO James Murdoch said: "In Asia where digital and addressable cable systems are so rare, this deal further sets Star and our partners ahead of other players in the market. Partnering with Koos is a perfect match for us to roll out digital cable infrastructure in Taiwan, paving the way for the first large-scale market launch of digital set-top boxes in Asia and the introduction of interactive services in Taiwan, clearly setting the pace for the development of the pay TV business in the region."

It was in October that the Koos group's broadband Internet access and content provider GigaMedia Ltd and Star agreed to form a joint venture that would focus on developing interactive television services in Taiwan.

At the time GigaMedia and Star signed a binding memorandum of understanding to form a 50-50 jointly owned company that would operate independently.

But at the end of March the agreement was modified where Star's investment was to be for the digitisation of headends and the rollout of digital set-top boxes.

Although both parties claimed they remained committed to developing the Taiwanese interactive television market, they said the priority was to upgrade and digitise the network infrastructure.

In money terms this meant that the original plan where GigaMedia was to have injected $ 50 million into the interactive television project stood shelved.