Television Broadcasts (TVB), will remain the dominant player among Hong Kong's free-to-air broadcasters despite the prospect of new entrants joining the fray, according to a leading industry analyst.

But the increased competition would force TVB to innovate and improve its content, and Hong Kong audiences can therefore expect better quality programmes, said Vivek Couto, executive director of independent media research group Media Partners Asia.

The Hong Kong Broadcasting Authority accepted applications from three new free-to-air (FTA) providers in late 2009 and is expected to announce its decision soon. Couto said he expected the decision to be announced by the end of July, and market talk was that one or more new providers would be licensed.

"There is speculation that international players like Fox International Channels, which has strong consumer bands, may be tempted to explore the FTA market here as it has done in other markets," Couto said. "But this will clearly be done in co-operation with one of the new players either through a content alliance or a joint venture."

FTA television in Hong Kong has operated under a comfortable duopoly between TVB and Asia Television (ATV) for 40 years, until the three newcomers applied to join the game.

City Telecom (HK) was the first to apply in December 2009, followed by i-Cable Communications' Fantastic Television, and PCCW Interactive Media Holdings' HK Television and Entertainment.

Couto said he believed TVB's market share would fall as a result of the increased competition, but since the market would be larger, the decrease would be fairly small. "TVB will still have 75 per cent of the TV advertising market by 2015, compared with 77 per cent in 2010," he said, basing his estimate on the likelihood of two new industry entrants.

He said the three candidates had strong distribution networks and a level of funding, but lacked TVB's library and massive production mechanism. The challenge would be greater for ATV, according to Couto, since TVB, besides dominating the Hong Kong market, was also a major Chinese television programme distributor worldwide. Couto estimated TVB generated 40 to 50 per cent of its sales outside Hong Kong.

In January, a group of investors led by local dealmaker Charles Chan Kwok-keung and Taiwanese entrepreneur Wang Cher acquired media mogul Sir Run Run Shaw's 26 per cent TVB stake for HK$6.26 billion.