Cable TV

‘Trai has come up with the correct CAS economics’ : K Jayaraman – Hathway Cable & Datacom MD & CEO

Published

19 years ago

September 18, 2006

The Telecom Regulatory Authority of India (Trai) has laid out a fertile ground for digital cable TV take off. The formula is simple: price everything low and large volumes will create a viable market dynamics.

India has seen it in mobile phones. The lessons will repeat itself in the television industry. Despite the initial blip, the industry will correct itself and grow as at the centre of this pull of gravity rests the consumers.

Broadcasters are not in tune with this logic. Their programming costs are rising. So why not let them have the freedom of pricing their products?

The cable operators, along with the consumers, are in love with the a la carte pricing of pay chanels at a maximum of Rs 5. The multi-system operators (MSOs) feel that a new business model is being set.

In an interview with indiantelevision.com‘s Sibabrata Das, Hathway Cable & Datacom managing director and CEO K Jayaraman argues how every stakeholder will eventually stand to gain. The a la carte pricing will make digital cable popular while the revenue share across the value chain has been “very accommodative.”

Excerpts:

Do you agree with what the Telecom Regulatory Authority of India (Trai) has fixed as the price and revenue share under conditional access system (Cas)?
The regulator has come up with the correct economics. Consumers will have choice and at a real affordable cost. The a la carte pricing of channels at a maximum of Rs 5 in Cas areas will increase the penetration of set-top boxes (STBs) and drive in volumes. The revenue share allocation across the value chain is also very accommodative. Broadcasters will get 45 per cent share and have access to advertising revenues as well. While multi-system operators (MSOs) will have 30 per cent and carriage fee, local cable operators are also given a fair share with full revenue on the free-to-air (FTA) package and a 25 per cent share on pay channel revenues. Also, the government will get more tax revenues.

Broadcasters complain that the maximum price of Rs 5 per channel is too low and doesn‘t take into account their high programming costs.
When subscription becomes transparent, the rate has to be low. For digital technology to take off, we need such a price regulation. Let us face the reality: these are the consequences of a new environment and a change in business model. Besides, the price regulation is only for one year. Free market will prevail and price will be discovered eventually.

With a la carte pricing, cable bills are expected to drop. How will falling ARPUs (average revenue per user) affect the cable companies?
Nothing can be worse than the current model. But under Cas, we will, at least, have a legally sanctioned revenue, albeit lower. No doubt we will get a Hindu rate of return. But we will not have under-reporting of subscribers. We are happy that a proper business model is being set. Revenues Will grow once the business model settles. Everybody will be on the move. As consumers have choice, broadcasters will have to worry about pricing their channels correctly within a maximum of Rs 5. If they do that, then MSOs can also make money. We will have to focus on providing quality cable TV service. If we don‘t do that, we have competition from direct-to-home (DTH) service and will face threat of being wiped out.

Cable companies will also have to subsidise the boxes. Do they have the resources to absorb subsidy costs and still scale up?
All of us will have to be in investment mode because the business model is changing. The initial subsidy on each box will work out to Rs 1,500. This is the price we have to pay for a change in the business model. But this can be squared off once it settles down. The price of STBs will fall by 15-20 per cent with a surge in volumes. Cable companies will have to raise resources, either through debt or equity. For those who can‘t, survival will be tough. The telcos like Reliance Infocomm are waiting to step in. We should be prepared for a high volume, low margin game. Distribution, initially, is a volume business.

Won‘t your traditional business from non CAS areas be a support?
Yes, we will have other businesses to run: internet, non CAS placement fee, ad revenues from local cable channels. We will also have carriage fee from FTA channels in a CAS system. For cable companies to cover up their overhead and variable costs (STBs), they will have to do other related businesses.

‘A la carte pricing will drive down our ARPUs. But we are happy that a proper business model is being set‘

Like having a well-rounded revenue stream?
If you are a composite cable company, you will survive. We will have to provide video, voice and data through a common pipe. Standalone players will have a tough time. We, for instance, are preparing to launch voice over internet protocol (VoIP) services by the last quarter of this year. Test runs are currently on. We are also be aggressively pushing digital cable TV in non CAS markets. We recently launched in Jalandhar, having rolled out our digital services earlier in New Delhi, Mumbai, Pune, Bangalore, and Hyderabad.

Do you see DTH having a perceptional advantage over cable?
DTH platform providers are well capitalised and have a more long term vision. Their ARPUs can also settle higher as they better their products. But they have a huge variable cost in occupying transponder space. Cable companies, in contrast, have already made the investments and have low operating costs. Of course, now they will have a variable cost towards procurement of boxes. But they have an existing relationship with customers and cable is two-way enabled. Digital cable can also offer more channels. Composite cable companies with focus on multiple revenue streams can effectively fight DTH.

How are you planning to infuse capital to fund digitisation?
We will raise Rs 1 billion as debt to fund the first phase of CAS The bulk of the investments will be towards subsidising the STBs. Funding will also be required in setting up VoIP and expanding broadband infrastructure.

Is it a good time to acquire last mile operators?
If cable companies have the resources, acquisition of last mile will make sense. In the CAS areas where you have an administered price regime for one year, the payback period will be longer. But once the price is market-based, then recovery will be faster as more channels come under the pay system and people start subscribing to them. Even in non CAS areas, acquisition will provide size upon which a digital platform can be built later. But in case of Hathway where we have limited resources, we would rather put the money in placing more STBs.

Will Valuations of cable companies go up under CAS?
CAS will bring some semblance of order into the business. But it is a long term roll out and needs cash flow. What is more important is that cable companies will attract capital, whether in the form of equity, debt or convertible bonds.

Will there be a consolidation in the industry?
Consolidation will happen wherever digitisation is required because of new technology and service requirements.

Zee network‘s Wire & Wireless India Ltd (WWIL) is planning to launch a headend-in-the-sky (Hits) platform and has expressed intent to make inroads into south and western suburbs of Mumbai. Do you see territorial warfare among MSOs returning?
Hits is right now viewed more as a fashion statement. We are delivering digital without having Hits. If it is necessary, then everybody will do it. As far as poaching of operators go, it is an open ground. Cable companies who focus on good service and have capital to create capacity will turn out winners. Competition is not a one-way street.

Related Topics:CAS digital cable TV FTA Hathway Cable & Datacom K Jayaraman MSO Sibabrata Das STB television Industry Trai

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Cable TV

Den Networks Q3 profit steady despite revenue pressure

Published

2 months ago

January 19, 2026

indiantelevision.com Team

MUMBAI: When margins wobble, liquidity talks and in Q3 FY25-26, cash did most of the talking. Den Networks Limited closed the December quarter with consolidated revenue of Rs.251 crore, marginally higher than the previous quarter but down 4 per cent year-on-year, even as profitability stayed resilient on the back of strong cash reserves and disciplined cost control.

Subscription income softened to Rs.98 crore, slipping 3 per cent sequentially and 14 per cent from last year, while placement and marketing income offered some cheer, rising 15 per cent quarter-on-quarter to Rs.148 crore. Total costs climbed faster than revenue, up 7 per cent QoQ to Rs.238 crore, driven largely by higher content costs and operating expenses. As a result, EBITDA dropped sharply to Rs.13 crore from Rs.19 crore in Q2 and Rs.28 crore a year ago, pulling margins down to 5 per cent.

Yet, the bottom line refused to blink. Profit after tax stood at Rs.40 crore, up 15 per cent sequentially and only marginally lower than last year’s Rs.42 crore. A healthy Rs.57 crore in other income helped cushion operating pressure, keeping profit before tax at Rs.48 crore, broadly stable quarter-on-quarter despite the tougher cost environment.

The real headline-grabber, however, sits on the balance sheet. The company remains debt-free, with cash and cash equivalents swelling to Rs.3,279 crore as of December 31, 2025. Net worth rose to Rs.3,748 crore, while online collections accounted for 97 per cent of total receipts, underscoring strong cash discipline across operations, including subsidiaries.

In short, while Q3 showed signs of operating strain, the financial backbone remains solid. With zero gross debt, steady profits and a formidable cash war chest, the company enters the next quarter with flexibility firmly on its side proving that in uncertain markets, balance sheet strength can be the best growth strategy.

Cable TV

Plugging along as Hathway tunes in steady profits this quarter

Published

2 months ago

January 17, 2026

indiantelevision.com Team

MUMBAI: In a quarter where staying connected mattered more than moving fast, Hathway Cable and Datacom kept its signal steady. The cable and broadband major reported a net profit of Rs 21.7 crore for the December 2025 quarter, marking a clear improvement from Rs 13.6 crore a year earlier, even as pressures persisted in parts of its operating portfolio.

For the quarter ended December 31, 2025, revenue from operations stood largely flat at Rs 536.6 crore, compared with Rs 511.2 crore in the same period last year. Including other income of Rs 21.1 crore, total income rose to Rs 557.7 crore, reflecting incremental gains despite a competitive media and connectivity landscape.

Profitability improved on the back of disciplined cost control and higher contribution from associates. Profit before tax increased to Rs 28.2 crore, up from Rs 19.1 crore in Q3 FY25, aided by Rs 3.9 crore in share of profit from associates and joint ventures. After tax, earnings for the quarter climbed nearly 60 per cent year-on-year.

Over the nine months ended December 31, 2025, Hathway reported a net profit of Rs 71 crore, compared with Rs 57.7 crore in the corresponding period last year. Total income for the nine months came in at Rs 1,677.3 crore, up from Rs 1,599.8 crore, while profit before tax rose to Rs 94.7 crore from Rs 84.2 crore.

A closer look at the segments shows a familiar split story. The cable television business remained under pressure, reporting a segment loss of Rs 11.4 crore for the quarter, though this narrowed sharply from the Rs 16.6 crore loss seen a year ago. In contrast, the broadband business returned to the black, delivering a modest but positive contribution of Rs 4.2 crore, helped by associate income. Dealing in securities continued to be a bright spot, generating Rs 14.7 crore in quarterly profits.

Costs stayed broadly contained. Pay channel costs, the single largest expense, rose to Rs 287.4 crore, while depreciation and amortisation stood at Rs 74 crore. Finance costs remained negligible at Rs 0.2 crore, keeping leverage risks in check.

Hathway’s earnings per share for the quarter improved to Rs 0.12, up from Rs 0.08 a year ago. The company maintained a strong balance sheet, with total assets of Rs 5,302.4 crore and total liabilities of Rs 848.9 crore as of December 31, 2025.

While structural challenges persist in the traditional cable business, the numbers suggest Hathway is slowly recalibrating its mix trimming losses where needed, leaning on associate income, and keeping the broadband engine ticking. For now, the company may not be racing ahead, but it is clearly staying tuned in to profitability.

Cable TV

Signal drop Tejas Networks’ numbers stay patchy in a volatile quarter

Published

2 months ago

January 10, 2026

indiantelevision.com Team

MUMBAI: In telecom, even the strongest signals face interference and Tejas Networks Limited’s latest numbers show just how noisy the airwaves remain. The Tata Group-backed networking firm reported unaudited standalone revenue of Rs 305.72 crore for the quarter ended December 31, 2025, up sequentially from Rs 261.37 crore in the September quarter, but sharply lower compared with the Rs 2,642.05 crore clocked in the year-ago period. The topline recovery, however, was overshadowed by a pre-tax loss of Rs 303.20 crore, widening from a Rs 473.03 crore loss in the previous quarter, and reversing a Rs 211.06 crore profit reported in the December 2024 quarter.

After tax, the company posted a loss of Rs 196.89 crore for Q3 FY26, compared with a loss of Rs 307.17 crore in Q2 FY26 and a profit of Rs 165.42 crore a year earlier. For the nine months ended December 31, 2025, Tejas Networks reported revenue of Rs 769.02 crore and a loss after tax of Rs 697.97 crore, a sharp swing from a Rs 512.67 crore profit in the corresponding nine-month period last year. The numbers reflect a year marked by execution challenges rather than demand collapse.

Costs remained the dominant spoiler. Total expenses for the December quarter stood at Rs 616.50 crore, driven by elevated material costs, employee expenses and provisioning. The company also flagged several one-offs and adjustments: a Rs 9.85 crore provision linked to the implementation of new labour codes, ₹24.35 crore in warranty provisions, and reversals related to inventory obsolescence. Earlier quarters had already absorbed heavy charges tied to contract manufacturing losses, design changes and write-downs, the hangover from which continues to weigh on profitability.

Tejas reiterated that it operates as a single reportable segment focused on telecom and data networking products and services, offering little insulation from sector-wide volatility. While revenue momentum has stabilised sequentially, the contrast with the previous financial year remains stark. For context, the company closed FY25 with audited standalone revenue of Rs 8,915.73 crore and a profit after tax of Rs 450.66 crore, underscoring how sharply the operating environment has shifted in FY26.

The results were reviewed by the audit committee and approved by the board on January 9, 2026, but they leave investors with a familiar question: when does recovery turn structural rather than episodic? For now, Tejas Networks appears to be in reset mode, balancing execution clean-up with cost discipline. In a sector where margins can be as fragile as fibre strands, the next few quarters will matter as much as the signals the company sends to the market.