ITV

Category: Multi System Operators

  • ‘Digitisation will throw open acquisition opportunities’ : IndusInd Media and Communications chief executive officer Nagesh Chhabria

    ‘Digitisation will throw open acquisition opportunities’ : IndusInd Media and Communications chief executive officer Nagesh Chhabria

    T he Hindujas have started the first round of cable TV digitisation in the three metro cities of Mumbai, Delhi and Kolkata. The second phase will open up 15 more cities where IndusInd Media and Communications Ltd (IMCL), the cable TV company they own, operates. Aggression is being planned to take on 14 more cities through acquisitions, joint ventures or direct entries.

     

    The ambitious target set is deployment of four million digital set-top boxes (STBs) on top of the 1.5 million IMCL is expecting to achieve in the first phase of digitisation. The company is also planning to own one million last mile connections in two years, up from its current base of 300,000.

     

    IMCL, which operates its cable TV business under the Incablenet brand, will need Rs 6 billion in the new phase that will see 38 cities go digital by 31 March 2013. The company is in talks with private equity investors to raise $75 million.

     

    “There is a huge appetite now to invest in cable TV companies. The first phase of digitisation has been successfully implemented in the three metro cities of Mumbai, Delhi and Kolkata. There is also no uncertainty now about India’s digitisation programme across the country. We should see equity deals happening in the sector,” says IndusInd Media and Communications chief executive officer Nagesh Chhabria.

     

    Chhabria believes the cable TV ARPUs (average revenue per user) would rise to Rs 500 by 2015, while carriage income would see a 10-15 per cent drop in DAS (digital addressable systems) markets.

     

    “In the first phase, we are looking at a 15 per cent increase and believe our ARPU would settle at Rs 225. If the ARPU is lower than this, the local cable operator will not survive,” he says.

     

    In an interview with Indiantelevision.com’s Sibabrata Das, Chhabria talks about the changing cable TV environment and the multi-system operator’s (MSO) expansion plans.

     

    Excerpts:

    Q. Is IMCL in talks with private equity investors to raise capital for funding its cable TV digitisation programme?
    We are looking at raising $75 million and have mandated Ernst & Young for this purpose. There is a huge appetite now to invest in cable TV companies. The first phase of digitisation has been successfully implemented in the three metro cities of Mumbai, Delhi and Kolkata. There is also no uncertainty now about India’s digitisation programme across the country. We should see equity deals happening in the sector.

     

    Q. Will $75 million meet IMCL’s total funding requirement for the second phase?
    We will need Rs 6 billion as we expect to deploy four million set-top boxes (STBs). We have existing lines of credit from banks for $15 million. We can further raise $10 million of new debt. So along with equity financing, we should be comfortably placed. Of course, there is concern about the weakening of the rupee, which will mean STBs becoming costlier. But we are asking our STB manufacturer to offer us a better rate so that it offsets any rise in dollar value.

     

    Q. Hasn’t IMCL lined up vendor financing so that the pressure on funding upfront eases?
    We have not gone in for that option. The Cisco set-top boxes are 15-20 per cent more expensive than ours. Our model works out cheaper for us.

     

    Q. Isn’t your estimate of the STB requirement too high as IMCL operates in only 15 out of the 38 cities that fall under digitisation in the second phase?
    It is easier now to get into new cities because there is less entry cost. You don’t have to pay broadcasters for an assumed number of subscribers as digitisation would reflect your actual subscriber base. Capital expenditure, of course, is going to be higher but there is an assured revenue model.

     

    We plan to enter into 15 more cities and anticipate a requirement of two million STBs from the new operations. For our existing operational cities, we would need two million STBs.

    ‘Even in the second phase, DTH will hardly be able to make an impact. Since most of the cities that fall in this round of digitisation are carriage markets, the national MSOs have a presence in them. Already 10 per cent of this market is digitised by the MSOs‘
    Q. Will you take the acquisition route for entering into these markets?
    Digitisation will throw open acquisition opportunities. There are many operators who will find it difficult to fund for the STBS. So they will either want somebody to invest in their cable networks or completely sell out. We are in talks with many independent operators. We can also enter on our own through fibre or available bandwidth.
     

    Q. How are valuations getting decided?
    We look at the profits made in the last fiscal and offer four times that value. The other option is to look at future profits (sans STB investment) made from the first six months of digital operations and then fix a value. But this has few takers as nobody wants to take the risk.

     

    Q. Are you not looking at last mile acquisitions that will give IMCL direct ownership of the consumer homes without having to share a portion of the subscription revenue with the local cable operator?
    We have an aggressive plan to own last mile. Our target is to own one million primary points in two years, up from our current base of 300,000. The acquisition of primary points, however, is much costlier and the price could be in the region of ten times the subscription fee. In Mumbai, this could go up to 20 times. But with digitisation necessitating billing systems, the primary points will be up for grabs.

     

    Q. Has DTH been able to eat into IMCL’s subscriber base in the first phase?
    We have hardly felt the impact. Even in the second phase, DTH will not be able to win over cable TV consumers in a big way. Since most of the cities that fall in this round of digitisation are carriage markets, the national MSOs have a presence in them. Already 10 per cent of this market is digitised by the MSOs. DTH will stand a better chance in tier III and IV towns. Acquisition of primary points in these smaller places will be a good strategy for MSOs to follow.

     

    Q. How many STBs has IMCL deployed across three cities in the first phase?
    We have already seeded 1.3 million boxes and our target is to touch 1.5 million. In Mumbai we will do 850,000 million and 0.5 million in Delhi. The progress in Kolkata is slow but it will also pick up.

     

    ‘We are looking at raising $75 mn and have mandated E&Y. There is a huge appetite now to invest in cable TV companies. The first phase of digitisation has been successfully implemented in the three metro cities of Mumbai, Delhi and Kolkata. There is also no uncertainty now about India’s digitisation programme across the country. We should see equity deals happening in the sector‘
     

    Q. Is the conversion into second TV homes significant?
    The demand for second TV sets is higher in Delhi than in Mumbai. But at a combined level we are talking of a 25-30 per cent conversion rate. We are working out a pricing for second and third TV sets as we have to match the DTH offers. But we are yet to ink deals with broadcasters on this.

     

    Q. What is the kind of content deals that you have stitched with broadcasters?
    We have done cost-per-subscriber deals. This works out better in the long term and is a more transparent system. We get to know our cost per box and it is easier to work out negotiations later. Our content cost would work out to 33 per cent of our subscription revenue.

     

    We wanted to do three-year deals with broadcasters but they were not ready for it. Most of our content deals are on a yearly basis.

     

    Q. What is the revenue share you are giving to local cable operators?
    The value chain will take away 33 per cent of our subscription revenue. We also have operational costs and an investment on the STBs, but we also earn carriage or placement revenue. We are seeing a 10-15 per cent drop in our carriage deals for DAS (digital addressable system).

     

    Q. Will ARPUs go up?
    In the first phase, we are looking at a 15 per cent increase and believe our ARPU would settle at Rs 225. If the ARPU is lower than this, the local cable operator will not survive.

     

    ARPUs for MSOs should at least be Rs 300 for them not to be dependent on carriage income. MSOs with ARPUs below Rs 300 will have to be carriage dependent.

     

    Our forecast is that cable TV ARPUs would rise to Rs 500 by 2015. What will lift up ARPUs is HD and regional packages. Premium packages will also get sold.

     

    Q. So are we talking of financially healthy MSOs in digitised India?
    A lot on how the market shapes up will be decided over the next six months. We will know the actual seeding of boxes in consumer homes once the subscription collections happen.

     

    Q. Will IMCL rely only on video services or there is a serious plan to pump up broadband investments?
    We will be investing Rs 1 billion on broadband infrastructure in the next fiscal. We are also going to prepare for IPTV and OTT (over-the-top) services.

     

    Q. What about launching local cable channels?
    Yes, this is very much a part of the plan. Since there will be no constraints on bandwidth in the digital era, we are planning to put together 10-12 local channels, including local news. We are also looking at ad-free channels.

  • ‘We are net positive in our deals with cable TV networks in the metros’ : IndiaCast Group CEO Anuj Gandhi

    ‘We are net positive in our deals with cable TV networks in the metros’ : IndiaCast Group CEO Anuj Gandhi

    IndiaCast Group CEO Anuj Gandhi is spearheading an effort to extract bigger pay-TV revenues from broadcast-carriage platforms as TV18 founder-promoter Raghav Bahl searches for growth engines that would propel his media empire to the top league of broadcasters like Star India, Zee Entertainment and Multi-Screen Media.

    Known both in the broadcasting as well as the cable TV world as CEO of Den Networks, Gandhi has already turned around TV18’s distribution business in the four digitised markets of Delhi, Mumbai, Kolkata and Chennai. “We will be net positive in our deals with the cable TV networks in the metros,” he says, after sewing the new commercial deals with the multi-system operators (MSOs).

    Gandhi is ready to reap richer harvests for TV18 as India moves towards digital cable TV. “We will be doubling our subscription earnings within three years,” says the man Bahl has spotted to shepherd the growth of IndiaCast.

    Correcting that is no mean achievement. For the full-fiscal ended 31 March 2012, TV18 Group paid carriage fee of Rs 3.5 billion against Rs 3 billion earned as subscription income from TV viewers through broadcast-carriage platforms.

    Hard bargaining over legacy issues including payment of carriage fees have held up agreements between broadcasters and MSOs with just nine days left for the shift to digital delivery of television channels in the four metros of Mumbai, Delhi, Chennai and Kolkata. But Gandhi is confident that there will be no shift in the deadline of 1 November for digitisation in the four metros.

    “We are entering a new era of television history in India,” he insists, with a smile and a twinkle in his eyes.

    In an interview with Indiantelevision.com’s Sibabrata Das, Gandhi talks about broadcasters‘ different nature of commercial deals with direct-to-home (DTH) and cable TV service providers, a drop in carriage fees, the need to correct “legacy loads” and the growth prospects for all the stakeholders in a digitised regime.

    Excerpts:

    Q. How can you say so firmly that there will be no shift in the deadline of 1 November for digitisation in the four metros?
    We are entering a new era of television history in India. The bad news staring at all of us today is losses, distorted business models and bandwidth constraints. If that is going to halt, the turnaround story for all of us will have to evolve around the digitisation script. The good thing is that all the stakeholders realise that hidden value will unlock only if we end the analogue cable regime. The government is also backing digitisation and has taken all the tough decisions. While Mumbai and Delhi are in full gear, we will know about the ground reality in Chennai and Kolkata as we hit the digitisation date.

    Q. But aren’t we just nine days away and all the commercial deals between broadcasters and MSOs are yet to be in place?
    While all of us are sighting a new dawn, we have a lot of legacy issues to correct. And this takes time. But it is only a few deals that are pending, a few knots that have to be tied. I don’t think this by itself will be a strong force to push digitisation behind. We have gone too much ahead to retreat.

    Even DTH had this dark cloud hovering around it in the initial days; Dish TV did not have Star channels when it launched and Tata Sky (a joint venture of Tata Sons and Star India) had to go without Zee channels in the beginning. We will have digitisation by the set date, with or without a few deals.

    Q. Is IndiaCast unable to lock the deal with Den Networks because of historic high carriage fees?
    I can’t comment on any specific deal. But in some cases there is a revenue mismatch between carriage payouts and the subscription earnings of a broadcaster. This may be due to legacy and involves a lot of negotiations to correct. We have done deals with all the other MSOs except Den (Anuj was earlier CEO of Den Networks). We are confident of sewing a deal with them in the next few days.

    Q. What kind of deals are being stitched? Has IndiaCast done more of cost per subscriber (CPS) or fixed fee deals?
    After rounds of negotiations, we have been able to work out most of our deals with MSOs on a CPS basis. But we are not stuck on any single formula. We are also signing fixed fee deals in certain cases.

    ‘There will be no drastic fall in carriage fees. While the TAM towns are rising, the number of channels are also shooting up. But in the digitised markets, we will see a good drop in carriage fees‘
     
    Q. Are CPS deals in IndiaCast’s case easier to ink because subscription revenues have been comparatively lower than the peer networks while carriage payouts have been higher?

    It has been easier to strike CPS deals because we have been late entrants. We are also at an advantage because we are the only major distribution company to have subscription and carriage under one roof. And as we inducted a new team (Anuj Gandhi joined in March 2012) in IndiaCast, the industry knew that we would seek a revenue-carriage correction.

    Q. Are DTH service providers able to do fixed fee deals while cable is moving more towards CPS arrangements?
    We are seeing an interesting trend emerge. DTH has been able to negotiate more fixed fee deals with broadcasters as they have a national satellite footprint. They can bet on their future subscriber growth numbers with some authority. And they benefit from this kind of commercial arrangement as the yield per box comes down in a fixed fee deal.

    Cable networks, on the other hand, are moving towards CPS deals as they address a finite market (city-specific like Delhi or Mumbai or Lucknow) and there is less chance of them growing horizontally (unless acquisitions happen or they compete amongst themselves to grab more territories). Though MSOs want to do fixed fee deals, broadcasters are not comfortable in forecasting the swelling in future cable TV subscriber numbers.

    As we move towards smaller markets involving small-sized cable networks in the second and third phase of digitisation, we would definitely see more CPS deals. These could later evolve into fixed fee deals as cable networks get a fix on what subscriber growth they would be able to register in future.

    Q. TV18 and Network18 on a consolidated basis earned about Rs 3 billion of subscription income while carriage payout was Rs 3.5 billion in FY‘12. Has IndiaCast been able to do net positive deals in these four metros?
    I can’t comment on the financials but we have corrected that legacy and are in a growth phase. We will be net positive in our deals with cable TV networks in the metros.

    Q. How much of the carriage fees the four metros account for?
    For the industry, these four metros would be accounting for about 45 per cent of the total carriage payouts. We would be in line with this trend.

    Q. How much of a carriage fee drop are we seeing in the four digitised markets?
    There will be no drastic fall in carriage fees. There are twin reasons for this. While the TAM (TV ratings agency) towns are rising, the number of channels are also shooting up. And in the digitised markets, we will see a good drop in carriage fees.

    Q. Raghav Bahl had earlier stated that TV18 would have to catch up on the subscription revenue front while the advertising income had reached a level comparable with the competing networks. What sort of pay revenue growth do you forecast?
    The industry will be able to post 20-25 per cent growth in a digitised environment as revenue leakages stop and the pay-TV market gets corrected. IndiaCast would definitely do better than that. We will be doubling our existing subscription revenues within three years. And when we say this, we are not factoring in any new channel that would be added to our distribution bouquet.

    ‘While DTH has been able to negotiate more fixed fee deals with broadcasters, cable networks are moving towards arrangements on a cost per subscriber basis as they address a finite market and there is less chance of them growing horizontally‘
     
    Q. Why TV18 group could capture a comparable advertising revenue after the launch of Colors while the distribution income stayed far behind competing networks?
    Advertising revenues are broadly reflective of the ratings that the shows get. The distribution business, on the other hand, is much more complex and a late entrant will take time to catch up. The challenge is to keep a fine line of balance between subscription and carriage. Growth is also heavily influenced by the ‘legacy numbers’. Digitisation, however, will help correct some of this ‘legacy load’ much faster than what would have been achievable in an analogue cable regime.
     

    Q. The company earns around Rs 300 million from its international content syndication business. What sort of a growth are you forecasting from this segment?

    We will double our revenues from this segment in three years. We will achieve this by expanding our reach and launching in more international markets. Colors already reaches out to 68 countries and we are looking at entering the South African market where we are in talks with the leading DTH operator there.

    We have just launched MTV India in the Middle East. We are planning to take that channel to other markets including the UK (the channel is already there in the US).

    We have also launched a new channel called Rishtey in the UK. The aim is to dig into the fast-growing free-to-air (FTA) market in the UK at a time when the pay-TV growth is shrinking.

    Q. With ETV clocking about Rs 1.1 billion of subscription income in FY‘12, how much of an advantage will the acquisition of these regional-language channels have in multiplying TV18’s consolidated pay revenues?
    ETV will give us a regional footprint, add depth to our distribution strength, help us penetrate the interior markets, and provide negotiating power to ensure that our network channels get carried in the smaller places.

    Q. Has the reworking of the joint venture distribution arrangement with Sun TV Network Ltd helped? Didn‘t TV18 taken the decision of directly handling the distribution of its network channels in the southern states (except Tamil Nadu where Sun distributes) because of the low pay revenues that it used to get despite the JV with Sun?
    Even now we share a good relationship with Sun TV. We distribute the Sun network channels in the Hindi Speaking Market (HSM) while the TV18 channels in Tamil Nadu are distributed by them.

    For the other southern states, we felt that we needed to take direct control of distribution. The fresh deal with Sun has indeed worked well for us.

    Q. Will IndiaCast want to add more channels or follow the OneAlliance model where size doesn’t matter?
    We don’t want to add channels just to get volume growth. We want to have the right mix of channels.

  • WWIL to raise Rs 3.24 bn via warrants to promoter firms

    WWIL to raise Rs 3.24 bn via warrants to promoter firms

    MUMBAI: Siti Cable Network Ltd, formerly Wire and Wireless (India) Ltd, is raising Rs 3.24 billion from promoter firms to cut its debt and fund digitisation.

     

    The company has received shareholders’ approval for issue of warrants convertible into equity shares to overseas promoter group companies Essel International Ltd and Essel Media Ventures Ltd.

     

    The Subhash Chandra-promoted multi-system operator (MSO) has a debt of Rs 4.5 billion.

     

    The funds will also be for acquisition of MSOs, local cable operators (LCOs) and to meet the working capital requirements.

     

    Essel International and Essel Media will invest the amount in tranches with the first tranche being 25 per cent of the issue price on allotment of warrants on a preferential basis. The balance amount will have to be paid by the two promoter companies within 18 months from the allotment of the warrants.

     

    Siti Cable will issue 16,20,00,000 warrants convertible into equivalent number of equity shares at a price of Rs 20 per warrant. The shares of the company closed at Rs 20.55 per share, down 2.38 per cent, at close on Friday on the Bombay Stock Exchange.

     

    The combined shareholding of Essel International and Essel Media will rise to 29.99 per cent after the two companies pay the full price of the warrants and convert them into shares, from the current 4.90 per cent. Simultaneously, the shareholding of other promoters (which includes Bioscope Cinemas Pvt Ltd with 57.95 per cent stake) will after the conversion of the warrants, fall to 43.09 per cent from 58.53 per cent. Essel Media currently has 3.63 per cent stake and Essel International 1.27 per cent.

     

    The total promoter shareholding after conversion of all the warrants will rise to 73.08 per cent from 63.43 per cent now and that of the public will drop to 26.92 per cent from 36.57 per cent.

     

    The price of the warrants is at a premium of 10 per cent over the price arrived at on the basis of SEBI regulations.

     

    The company has filed for approval of the warrant issue with the Foreign Investment Promotion Board (FIPB) as the two promoter group companies are registered overseas.

     

    The name of the company was changed to Siti Cable Network Ltd following a fresh certificate of registration based on a special resolution passed by the shareholders on 30 August 2012.

     

  • ‘Digitisation will not spur irrational price war as the Santa Clauses are broke’ : Hathway Cable & Datacom MD and CEO K Jayaraman

    ‘Digitisation will not spur irrational price war as the Santa Clauses are broke’ : Hathway Cable & Datacom MD and CEO K Jayaraman

    Hathway Cable & Datacom has an ambitious investment plan of Rs 10 billion as India opens up to digitisation across the country.

     

    In the first phase, India’s leading multi-system operator (MSO) plans to invest Rs 1.75 billion even as it expects DTH to take away 10-15 per cent of its cable TV subscribers in the two lucrative markets of Delhi and Mumbai.

     

    Sitting on a cash pile of Rs 2 billion, Hathway will not source equity finance at this stage. Though net losses will drag on for a long period in a digital environment, the MSO hopes to regain its old valuations if it manages to successfully implement the early phase of digitisation.

     

    Even as carriage revenue will shrink, Hathway’s endeavour will be to have an Ebitda of 20-25 per cent right from the start of mandated digitisation.

     

    In an interview with Indiantelevision.com’s Sibabrata Das, Hathway Cable & Datacom MD & CEO K Jayaraman talks about how no cable or direct-to-home company is in financial health to launch an irrational price war. He also elaborates on the MSO’s digitisation gameplan.

     

     

    Excerpts:

     

    DTH companies have made rapid progress in recent years. How is Hathway Cable & Datacom prepared to exploit the first phase of digitisation?
    We plan to invest Rs 1.75 billion in the first phase. This will include Rs 200 million towards marketing in Mumbai and Delhi over the next 6-8 months. It is the first time that we are splurging on media campaigns.

    Are you comfortably placed on the funding part or you plan to raise fresh capital?
    We have a cash pile of Rs 2 billion. We will not source equity finance at this stage. We are comfortably placed and will manage with bank debt and vendor credit.

    Will you need funding in the second stage?
    We will see when we reach there. We have already digitised around two million homes. We will need to digitise our remaining 6-8 million existing homes (including multiple TVs). Our funding requirement will be Rs 10 billion as we need to subsidise the set-top box (STB) cost and make further investment in infrastructure.

    Hathway was selling at Rs 500 a STB to its customers in voluntary digitisation. Will you further subsidise the boxes in a mandated digitisation environment?
    We are looking at charging Rs 750-790 a STB (including taxes) as the rupee has depreciated against the dollar.
    “LCOs will get a revenue share of 30-35%. They will gain from 2nd TV homes, operational efficiencies and Vas. Distributors will get a 5% rev share. They will also get a 30% share in carriage revenues”

    But DTH could go aggressive and there could be a price war situation?
    We won’t sell below this even if there is a price war. We do not have the financial resources to further subsidise the boxes.

     

    We, however, feel that no player is in a position to indulge in an irrational price war. Nobody in cable can do so. DTH will fight for market share on the basis of perception and brand. All the Santa Clauses are broke.

    Are you expecting a migration to DTH?
    We expect DTH to take away 10-15 per cent of our cable TV subscribers in the two lucrative markets of Delhi and Mumbai. But we see a surge in second TV homes. Besides, we will launch three packages – lower, middle and top-end. In all the packages, we will have a price advantage. Also, we will have more channels on offer than DTH because of our bandthwidth superiority.

    Will the supply of STBs be impacted due to a sudden rise in demand?
    We have ordered 1.3 million digital STBs and signed a letter of intent for another 0.5 million. We estimate our subscriber universe to be 1.5 million in Mumbai and Delhi. About 20 per cent of this will be second TV sets.

     

    We also have a presence in Kolkata through our joint venture company, Gujarat Telelinks Pvt. Ltd (GTPL), which acquired a 51 per cent stake in Kolkata Cable and Broadband Pariseva. We expect to at least seed 400,000 boxes there.

     

    We have already seeded 250,000 STBs on a voluntary basis in Delhi and Mumbai.

    Crucial to the whole implementation of digitisation is the appeasement of the local cable operator (LCO). Have you fixed the revenue share terms with them?
    The LCOs will get a revenue share of 30-35 per cent. There will be a loss of revenue for them but they will make up to some extent with the second TV homes, where they don’t usually charge anything from the subscriber. Besides, they will gain from operational efficiencies and will discover new homes in a digital environment. Also, there will be a revenue share for them from value-added-services (Vas). So they should reasonably settle with us.

     

    The distributors will get a five per cent revenue share. They will also get a 30 per cent share in carriage revenues. In Mumbai, we are comfortable with the distributors. There may be some issues in Delhi but we will manage to strike a smooth bond with them.

    Why haven’t the MSOs sat down together and decided on a common share for the LCOs who control the last mile to the consumer?
    That would attract the Competition Commission of India. But in any other form, we will make efforts to drive consensus up. We don’t want any fissure surfacing among the stakeholders. We can’t afford to derail DAS (Digital Addressable System).

    Do you expect carriage revenue to shrink considerably?
    We expect it to shrink by 30 per cent in the digital environment. This can even go up to 50 per cent. But we will be somewhat compensated by a reduction in content cost.

    How?
    We will do fixed fee deals with broadcasters and believe content cost in a digital scenario will fall in the region of 35 per cent. We are close to sealing deals with two big broadcasting companies.

     

    Even sports channels should allow us to price reasonably; customers should take it round-the-year. Otherwise, we will offer it on a-la-carte basis to consumers.

    Analysts predict that net losses of MSOs will drag on till at least 2016 in a digital environment?
    We can’t predict now. But Hathway aims to stay Ebitda positive. We expect our Ebitda to be at least in the 20-25 per cent range. We know it will be difficult at the early stage of digitisation but our endeavour will be towards achieving that range from the start.

    Hathway had fixed it IPO price band at 240-265 and the scrip is now quoting at Rs 116 per share. When will the valuation be regained?
    We will regain good valuations if we manage to seed the boxes. Investors are bothered about that and not about net profitability at this stage.

    Do you expect the second phase to be tougher for you?
    For Hathway, the ride in the second phase could be even smoother as we have already got a large population of digital subscribers on a voluntary basis in some of these major cities like Bangalore and Hyderabad. Our digital penetration in some of these cities is as high as 60 per cent. In Gujarat we have seeded 150,000 (out of our
    estimated current subscriber universe of 220,000) STBs, in Hyderabad we have 350,000 (out of 800,000) and in Bangalore we have a digital population of 275,000 (out of 400,000).

     

    And in Jaipur, Indore and Bhopal, we have a digital penetration of 40 per cent out of our current subscriber base. In Phase II, we are far ahead.

    Will you follow the acquisition route?
    We will not pursue acquisitions and will prefer to conserve capital for digitisation. We will not do any more analogue consolidation. It is bad to add analogue weight in the current circumstances. Our focus will be on digitsation.

     

    Post digitisation, we may be interested in acquisition in some of these cities. But it should come at the right price.

    Are you looking at launching value-added services?
    We will tie up with either Ericsson or Cisco for Video-on Demand (VoD) services. We will decide in March whom to partner with. We have launched HD services and also bundled it with our broadband offering. We hope it will enhance our average revenue per user (ARPU). We have 2000 HD subscribers. Given that we get Star bouquet on HD and spend on marketing, we expect HD to eventually account for 10 per cent of our subscriber base.

    Are you bullish on your broadband growth?
    Yes, that gives us an advantage over DTH. We are also ahead of the other big MSOs so far as broadband goes. We will be bundling broadband with digital cable to offer better value to the consumers. The broadband homes passed stand at 1.7 million and our actual subscribers are 400,000.
  • ‘Buyout valuations will now be decided in terms of ARPU rather than carriage growth’ : IMCL MD and CEO Ravi Mansukhani

    ‘Buyout valuations will now be decided in terms of ARPU rather than carriage growth’ : IMCL MD and CEO Ravi Mansukhani

    IndusInd Media and Communications Ltd (IMCL), the media subsidiary company of Hinduja Ventures Ltd, plans to raise $100 million, a major chunk of which will be used to fund acquisitions.

     

    Operating its cable TV business under the InCablenet brand, IMCL had earlier planned an initial public offering (IPO) but changed its stance as the newly listed cable TV entities, Den Networks and Hathway Cable & Datacom, dropped in market value.

     

    Even on the acquisition front, IMCL has changed gears. Earlier, the focus was to buy small-sized cable TV networks and expand geographies. Now it targets big-ticket acquisitions, expecting the sector to consolidate as the government chalks out a schedule for digitisation across the country.

     

    Slow on the broadband path, IMCL is experimenting on new technologies where it will not have to entirely overhaul its network to load on broadband capability.

     

    In an interview with Indiantelevision.com’s Sibabrata Das, IMCL managing director and chief executive officer Ravi Mansukhani talks about how the acquisition game is going to move from carriage calculations to valuations based on ARPU (average revenue per user) growth as the cable TV sector transitions into the digital era.

     

    Excerpts:

    Why is IMCL taking so much time in readying its IPO?
    We are in the market to raise $100 million ahead of the IPO and have mandated Deutsche Bank for this. We want to first build a solid valuation base. We believe the value of the top-rung MSOs will get a significant boost once the government fixes up a schedule for digitisation. We want to also expand on our size before we go for a public float.

     

    We have separately raised Rs 1 billion of debt from General Electric. So funding is being taken care of. We are getting ready to move into top gear.

    Have you finalised on how you are going to raise this amount?
    We are weighing various options. We are looking at mezzanine structures. The final structuring will depend on what fund-raising instrument we select.

    Are we going to expect acquisitions or a drive to greater digitisation?
    We plan to use three-fourth of the amount raised for acquiring cable TV networks. We are looking at small and big-ticket acquisitions. We believe there is going to be consolidation in the industry. For digitisation, we have a separate funding plan to meet the capex requirements.

    Why has there been a change in stance as the earlier focus was to buy small-sized cable TV networks and expand geographies?
    We see an opportunity out there as the other leading MSOs like Hathway Cable & Datacom and Den Networks are not on a buying spree. The valuations have dropped and we are ready to make big-ticket acquisitions ahead of the government‘s digitisation schedule. The acquisition focus now will be not on expanding into new geographies but on consolidating and growing in existing operational cities.

    Will the acquisition game change even as the government lays out a roadmap for digitisation across the country?
    The game will definitely change. A few years back, when the pace was set by new entrants such as Den and Digicable, acquisitions were based on carriage calculations and TRP cities were favoured. Now, as digitisation creeps in, buyout valuations will be decided in terms of ARPU growth. So we have decided to consolidate and expand in areas where we already exist like Maharashtra. There is no point in spreading lean.
    “We are in the market to raise $100 mn ahead of the IPO. We want to first build a solid valuation base. We believe the value of the top-rung MSOs will get a significant boost once the govt fixes up a schedule for digitisation. We want to also expand on our size before we go for a public float”

    Do you see MSOs fighting amongst each other once the digitisation programme is announced?
    MSOs would rather consolidate and expand where they are strong; their focus would be on digitising their existing network. MSOs can‘t create a fight today without being attacked; too much is at stake.

    How will MSOs counter the DTH invasion?
    India will remain primarily a cable country. Yes, in a diversified and fragmented market, DTH will have space. But being the incumbent player, cable TV has a distinct advantage. Besides, it is cheaper priced, bandwidth is no issue and it can be interactive. MSOs will also start launching server-based local channels as in the digital era, space will open up for more channels. There will be need for local news and events. DTH can‘t offer these channels.

    How much of IMCL‘s network is digitised?
    We have over half a million digital set-top boxes (STBs) installed. Out of the 28 cities that we operate in, we provide digital services in 17 cities via 10 digital head-ends.

     

    If the government‘s digitisation plan is on stream, we will deploy close to two million additional boxes in Phase 1. We are going to fund our digitisation through lease and vendor financing.

    Why is IMCL‘s broadband story yet to emerge?
    Our focus has not been on broadband in the past because the franchisee operators have been providing it. Though we provide broadband in nine cities, our revenues from this segment stood at just Rs 50-60 million in FY‘11.

     

    We plan to have a strong broadband story once the digital path is properly spelt out. We are currently experimenting on new technologies where we will not have to entirely overhaul our network to load on broadband capability.

     

    We won‘t have a problem building up broadband revenues once we have pushed the digital STBs in. The script will change after the government announces the sunset date for the digitally notified areas. It is companies like You Telecom who will need to grow their cable TV presence in order to provide broadband.

    Hathway has announced it would launch its HD service in June. When are you getting into this segment?
    Our first priority is to offer digital service. We will then graduate to HD. The market is still not ready for it. HD boxes are on the anvil and we will introduce them into the market in the next few months.

    IMCL‘s total income jumped 23 per cent to Rs 4.03 billion in FY‘11. What growth do you estimate in FY‘12 and what is the outlook on carriage income?
    We expect revenue to grow between 20-25 per cent. This will be higher if we raise capital fast and make big-ticket acquisitions.

     

    We saw 18-20 per cent growth in carriage income in FY‘11. We expect strong growth from this stream as more and more channels get launched in the fiscal.
  • Indiantelevision.com’s interview with You Telecom CEO EVS Chakravarthy

    Indiantelevision.com’s interview with You Telecom CEO EVS Chakravarthy

    Citi Venture Capital International-owned You Telecom India has resized its investment plan amid the economic downturn.

    The trimmed-down plan will mean a fresh investment of Rs 2.5 billion over two years, instead of Rs 4 billion as earmarked earlier.

    Narrowing down the spread, the expansion plan will focus on depth and consolidation of the business in the cities where You Telecom runs operations.

    The redrawn map will mean that You Telecom stays as a niche player in the market for at least two years, shunning away from a frenzy among many multi-system operators (MSOs) to land grab and build scale.

    You Telecom is in talks to rope in Indian investors for Digital Outsourcing, its cable TV arm. Tulsi R Tanti and his family members, promoters of wind power company Suzlon Energy Ltd, hold 49 per cent stake in the company. You Telecom has 36 per cent stake while the balance is held by high net worth Indian individuals.

    In an interview with Indiantelevision.com‘s Sibabrata Das, You Telecom CEO EVS Chakravarthy talks about how important it is for cable TV companies to work on their business models, stay away from reckless acquisitions, conserve capital and penetrate deeper into last mile services.

    Excerpts:

    Two MSOs are in the process of tapping the capital market. Do you think the cable TV sector has reached a stage of maturity for listing?
    The two preliminary draft prospectus filings are the first in the cable TV sector of significance for raising money from the capital market. The outcome of these two IPOs will send strong signals for the future. Investors will watch carefully the pricing of the issues, the intrinsic value of the business it captures and the sustainability of it. Hathway Cable & Datacom and Den Networks need to do everything to make sure that the sector becomes attractive for current and future investors.

    How does this impact companies like yours?
    We are not in a hurry to capitalise on the high valuations in the market today. We want to see if this is sustainable. We prefer to go to the market as a profitable company with a strong business model and management bandwidth. We want to time the IPO appropriately.

    Are you saying that Hathway and Den are in a hurry to raise money via the IPO route?
    Both the MSOs expanded aggressively through acquisition of cable networks. They need further capital to fuel their growth.

    Will these two listings aid digitisation?
    Consolidation will happen faster than digitisation. As a process of consolidation, I wouldn‘t be surprised if Hathway buys Den – or the other way round. Besides, more and more cable companies will get listed.

    Will the climate be favourable for foreign strategic investors like Comcast?
    Foreign strategic players will still stay away because no single Indian cable TV company has built that scale. Post consolidations, they will show interest. For Comcast and others to come, it is 3-5 years away.

    ‘Post listing of the two MSOs, consolidation will happen faster than digitisation. As a process of consolidation, I wouldn‘t be surprised if Hathway buys Den – or the other way round‘

    Since the IPO is throwing open early exit options for private equity firms, won‘t they find the cable TV sector attractive?
    Some of them came into the sector with the hope that the government-mandated Cas (conditional access system) will spread to other cities. That has not happened. Still the sector attracted further private equity investments as everybody saw an opportunity in the distribution business. New PE players will wait to see if the market price of the listed companies is sustainable. The calls that they will take now will be more informed due to the last two years of collective experience of the industry.

    You Telecom had plans to expand in the bull phase and had decided to invest Rs 4 billion over two years. What made you scale back your investment plans?
    We have decided to pump in Rs 2.5 billion over the next two years to boost our cable TV and broadband business (the investments for cable TV are made through a subsidiary company, Digital Outsourcing). Our focus will be on depth and consolidation of the business in the cities where we run operations. We had earlier planned to expand into 15 new cities, including 10 for cable TV services. But in a capital scarce scenario, we will go to six more cities in the first phase. For cable service, we will be adding 2-3 cities to our existing operations in Mumbai, Bangalore and Vizag. After that, we will rework on our fund requirement.

    So you plan to stay as a niche player in the market for at least two years?
    We have seen how some MSOs have been pursuing a high-growth subscriber universe by recklessly acquiring cable networks. Having a large universe can become a liability. The capital has dried up for them and there is no change in their business models. It is important to be consistent, strong, stable and profitable.

    We are looking at an optimum size of 4-5 million in the first phase, up from our current reach of two million. You can‘t just focus on the reach universe when there is just a 20 per cent revenue share (due to under-reporting). Our focus will be to penetrate deeper into last mile services.

    But if government announces a policy for HITS (Headend-In-The-Sky), will you scale up?
    When the regulation comes, we will be one of the applicants. We are ready as far as the rest of the infrastructure is concerned. We will partner with Cisco on technology; we already have an existing head-end infrastructure with them. We have also signed an MoU for the transponder. We plan to invest an additional amount of Rs 1.5 billion for HITS.

    Will Tulsi R Tanti and his family members (Suzlon promoters) commit investments for such expansions?
    They currently hold 49 per cent stake in Digital Outsourcing and stand committed. We might also bring in other Indian investors.

    You Telecom acquired a majority stake in Scod18 Networking to have a cable TV presence in Mumbai. What are the expansion plans under this entity?
    Scod18 has been a Mumbai-centric MSO. We will continue to be a significant player with a significant market share in Mumbai. We will expand in areas around Mumbai and in parts of Maharashtra along with them, if and when we get the right opportunities. Our focus will be on digitisation and other value-added services like on-demand and TV-commerce.

    And for Bangalore?
    We acquired a 50 per cent stake in Digital Infotainment, a small-sized local cable network, and our investments in this venture so far has been Rs 500 million (out of a total investment of Rs 5.5 billion). We will expand in Bangalore and other areas in Karnataka through this joint venture.

    Will acquisition be the only growth route for you?
    Yes, that is how we will grow. We are planning to offer stock in lieu of last mile acquisition. This is how Cisco grew from a $2 billion to a $22 billion company – by offering stock. Pragmatic cable companies, after all, have to start a trend. But for this listing is important.

    Having taken the position of a niche player, how important is it for you to launch premium products to drive in higher ARPUs (average revenue per user) as a strategy?
    The market today is not matured for premium products. The content cost is exorbitant and pricing is a big issue. The MSO that could have monetised on value-added services is Hathway Cable & Datacom as it has a million digital subscribers. But as this has not been a focus area for them, there must be compelling reasons for this.

    What will the focus area for MSOs this year?
    MSOs will have to make sure that they have enough capital with them.

  • ‘We plan to raise Rs 5 billion’ : Ravi Mansukhani – Indusind Media & Communications CEO and MD

    ‘We plan to raise Rs 5 billion’ : Ravi Mansukhani – Indusind Media & Communications CEO and MD

    Hinduja-owned IndusInd Media & Communications Ltd (IMCL) has survived the scare from a wave of new multi-system operators (MSOs) that threatened to land grab even in the lucrative market of Mumbai.

    IMCL has expanded its footprint to 27 cities and thrived on a hefty carriage revenue that helped the MSO turn profitable. In FY‘09, carriage made up for almost 50 per cent of IMCL‘s turnover as broadcasters coughed out Rs 1.4 billion to place their channels on the network.

    The media subsidiary company of Hinduja Ventures Ltd plans to list through an initial public offering (IPO). Ahead of that, it is in talks to rope in an investor. The total fund-raising agenda: Rs 5 billion.

    Operating its cable TV distribution business under the Incablenet brand, IMCL has agreed to dilute one per cent stake to Ashley Investments at a valuation of $644 million. As part of this exercise, 0.22 per cent has been diluted.

    The MSO has aggressive plans to grow in the digital environment. IMCL is also gearing up to grow its fledgling broadband business, after upping its primary connections to 200,000 that would give it access to the last mile.

    In an interview with Indiantelevision.com‘s Sibabrata Das, Indusind Media & Communications CEO and MD Ravi Mansukhani talks about the MSO‘s growth plans.

    Excerpts:

    IMCL is planning to take the IPO route. How much are you going to raise?
    We are out in the market, looking to raise money. We may get an investor before we possibly do the IPO. We feel this is the best route to take. But if there is no match on our valuations, we will go on our own. We plan to raise Rs 5 billion to fund acquisitions and our digital cable TV expansion. But we are not in a hurry. We want to list with the right fundamentals and the future for digitisation.

    Why are cable TV companies suddenly rushing to list?
    DEN (Digital Entertainment Networks)a late entrant, is planning an IPO this year. There are media reports also about Hathway Cable & Datacom readying to tap the market. Wire & Wireless India Ltd (WWIL) is in the process of raising money through a rights issue. The fact is that cable TV companies are looking at expansion as they feel there is a huge potential left open. Unfortunately, DTH has not been able to fight analogue cable because of the pricing. And with digital cable growing slowly, DTH has not grown to everybody‘s expectations.

    But is it not true that all the DTH operators are mopping up subscribers very aggressively?
    DTH is growing either in cable dark or bad cable areas. In urban India, they have made penetration in mostly multiple TV homes and, thus, co-existed with cable. A very small percentage has come at the expense of the cable TV operators, perhaps because the ARPUs (average revenue per user) are low.

    A wave of new MSOs have entered the market. How has this affected Incablenet?
    In the urban areas, this led to ground warfare as the entrants wanted to grab territory. Subscription rates, undoubtedly, got affected as we had to retain our base. This was particularly felt in case of franchisee fees. But we held on – and are slowly getting back the old rates.

    We have actually grown in revenues as we expanded through acquisitions. We are present in 27 cities, up from 12 a couple of years back. We have laid more infrastructure and have over 6000 km of hybrid fibre network. We have posted a 45 per cent growth year-on-year over the last two years. We have also turned around and become profitable.

    Wasn‘t this largely because of the steep growth in carriage fee which accounted for almost 50 per cent of IMCL‘s FY‘09 revenues?
    Yes, the placement charges helped to a large extent for IMCL turning profitable. But we are no more stuck as just a cable MSO. Though video is the mainstay of our business, we have laid infrastructure and will now aggressively push for broadband.
    ‘This is a good time to make acquisitions as the cost per point has come down. In prime locations, valuations have fallen by a quarter and in other areas by almost 50%‘

    The company has been talking about broadband for the last few years but very little has happened. The revenue from broadband for FY‘09, in fact, was under Rs 50 million. So what changes this time?

    The three bottlenecks that hindered our broadband growth are now behind us. Bandwidth costs have fallen. Secondly, we have merged the broadband company with the cable outfit, so that saves us from paying out any network charges. The third and the most important fact is that we have grown our primary points from 50,000 to 200,000 and, as we own the last mile here, we don‘t have to pay commissions to franchisee operators. We are targeting to double our revenues from broadband this year. We will also get into commercial clients as it will give us higher ARPUs. In the retail segment, our ARPU stands at Rs 400

    Was there a conscious decision to acquire more of primary points?

    When we went in for acquisitions, we ensured that we got into good ARPU areas. We also took care that we acquired 30 per cent of primary connections from the cable networks that we snapped up.

    Were you driven to new geographies because of the carriage market and also because of a land grab situation from new competition?

    The older MSOs like us expanded into new cities because of the promise of digitisation which would lead to transparency and ensure that we carve out a commission system for ourselves. The new MSOs came under the plank of carriage fees. Undoubtedly, placement charges helped all MSOs to survive and grow – including the digital business.

    The economic slowdown is hurting broadcasters and they are pulling down their carriage costs. How is this going to affect IMCL‘s growth this year?

    Carriage revenue will not dip but flatten for us this year. There are new channel launches but they are not of that scale as last year‘s. This will be a consolidation year for us.

    How much is IMCL investing this year?

    We had invested Rs 1 billion in FY‘09, equally split between acquisition, digitisation and laying of infrastructure. For this fiscal, we plan to invest a similar amount. We will add two digital headends to our existing eight. We will also supply digital feed to four more cities during the fiscal, in addition to the four that we have currently linked up.

    We have so far seeded 350,000 digital set-top boxes (STBs) across eight cities. We haven‘t got fresh STBs this fiscal as the government has imposed duty on the import of boxes. But we have placed orders and expect supplies to arrive in November. Our target is to add 150,000-200,000 boxes during the fiscal. The Commonwealth Games in Delhi also could act as a big boost if the government comes out with a digitisation policy to coincide with that event.

    Will you be aggressive on acquisitions this year?

    We will continue to make acquisitions where we see an opportunity being thrown on us at the right value. This is a good time to buy as the cost per point has come down. In prime locations, valuations have fallen by a quarter and in other areas by almost 50 per cent. Operators need the support of bigger MSOs because of the huge subsidy in digital boxes. We will consolidate in states where we are already present.

    And there will be more disturbance on the ground?

    Warfare for territory will reduce as the new MSOs will not be that aggressive. Money is drying up and they are back in the market trying to raise funds.

    Is there a drive to restructure the content business under associate company Planet E-Shop Holdings India Ltd?

    The movie business is moving into Planet E-Shop. This is also housing the distribution of channels for retail and commercial. We are distributing ESPN in Mumbai and are in talks with two other major broadcasters. We have also taken up marketing and distribution of foreign channels like Arirang and Miracle Channel that seek downlinking in India. We are looking at signing up three more foreign channels this year.

    Will the cable movie channel, CVO, move into this company?

    The channel is part of IMCL and there are no plans as of now to shift this out. We may make it a pay channel down the road as the digital environment grows. We have bought 100 movies this year and are planning to add 300-400 more as prices have fallen. The revenues are getting squeezed for cable movie channels. But we have a library of 700 movies and later may create thematic channels for digital subscribers.

    What plans do you have to grow the content side of the business?

    We will create server-based local channels when the time is ripe. Cable news channels in metros may not be viable as it makes more sense to get placement fees than run your own channel in a choked analogue environment. The situation can be different in smaller towns. Our interest is to create these server-based local channels that do not depend on advertising but pay revenues.

    Will the cable movie channel, CVO, move into this company?
    The channel is part of IMCL and there are no plans as of now to shift this out. We may make it a pay channel down the road as the digital environment grows. We have bought 100 movies this year and are planning to add 300-400 more as prices have fallen. The revenues are getting squeezed for cable movie channels. But we have a library of 700 movies and later may create thematic channels for digital subscribers.

    What plans do you have to grow the content side of the business?
    We will create server-based local channels when the time is ripe. Cable news channels in metros may not be viable as it makes more sense to get placement fees than run your own channel in a choked analogue environment. The situation can be different in smaller towns. Our interest is to create these server-based local channels that do not depend on advertising but pay revenues.

  • Media Partners Asia: Cable the ultimate key to India’s broadband digital future

    Media Partners Asia: Cable the ultimate key to India’s broadband digital future

    This is an executive summary of a Viewpoint Paper presented to the Prime Minister’s Office on 16 March 2007. The Paper was produced by research firm Media Partners Asia (MPA), and also supported by Liberty Global, Inc; Macquarie Media Group and Star Group.

     

    The current cable industry, which already contributes 0.6 per cent directly to GDP, has the potential to increase this direct contribution exponentially, if it maximizes its broadband digital potential and attract investment. To do this, cable needs to be seen by the Government of India as the significant platform in the national economic context and as the key driving national broadband digital growth. Therefore, it needs higher priority in policy planning and a framework that allows it to maximize value.

     

    Cable today in India is the dominant last mile pipe, connected to 20 million more homes than fixed line telephony. Cable TV already connects an estimated 71 million homes and almost 60 per cent of homes that own a TV set subscribe to cable TV, with India overtaking the US in 2006 to become the second largest Cable power in the world. Projected to further establish its status as the leading last mile network, cable will, serve more than 100 million TV homes by 2010. Its size and scale, if harnessed, presents a great opportunity to drive broadband digital deployment.

     

    What is needed is an influx of capital an order of magnitude greater than currently exists. However, investors say that sentiment on broadband digital development in India is being somewhat dampened by the regulatory framework, which has grown too intrusive and harmful to long-term growth. As a result, investors are still cautious about funding long term broadband digital network upgrades when regulation imposes strict controls on the pricing of new capital intensive services. Concerns have intensified with the regulation for the deployment of digital conditional access systems or CAS in India. While all investors are agreed that CAS will provide a significant impetus to the deployment of broadband digital networks, they think it will work only in a less tightly regulated context.

     

    Shane O’Neill, Chief Strategic Officer & Board Member, Liberty Global Inc., says: “The market is very attractive in terms of sheer size and growth potential but could be held back by ‘over regulation’ in key areas such as channel rate regulation, mandated revenue shares between industry participants and FDI caps. A lighter approach might be necessary to encourage the significant investment required to develop the broadband and digital industries both of which are very important for India’s future development.”

     

    Alex Harvey, MD of Macquarie Media Group, adds, “We think India’s cable businesses, due to their ability to offer a range of converged services, will be material areas of growth and opportunity. A key element to realising these growth opportunities will be a transparent and proactive regulatory environment – this must be a priority area of government focus.”

     

    Paul Aiello, the new CEO of STAR Group says: “The stakes are high for policymakers and the regulator to get it right, ensuring progressive policies that facilitate investment and growth.”

     

    Investors are eyeing many deals in the cable broadband/digital space… one of the complications for some of the larger investor groups is how the current regulatory framework will play out – the current restrictions on revenue share, channel distribution and pricing are not optimal for investment, especially as there is no concrete signal was to when these restrictions will be lifted.

     

    (The views expressed here are those of the author and Indiantelevision.com need not necessarily subscribe to the same.)

  • WWIL acquires 51 per cent in Delhi MSO for CAS

    WWIL acquires 51 per cent in Delhi MSO for CAS

    MUMBAI: Wire & Wireless India Ltd (WWIL) is expanding its footprint in Delhi. The demerged cable company of Zee Group has acquired a 51 per cent stake in Satellite Channels, a multi-system operator (MSO) who was operating in the Cas (conditional access system) notified area of Delhi, for an undisclosed amount.

    WWIL has also signed up with Spectranet and Sanjay Cable Network. All these MSOs were disqualified for Cas as they were found not ready by the Telecom Regulatory Authority of India (Trai) for making the switchover to addressable system by 31 December.

    “We have bought 51 per cent in Satellite Channels and have signed up with Spectranet and Sanjay Cable Network,” WWIL CEO Jagjit Kohli tells Indiantelevision.com.

    Earlier, WWIL had acquired control over 5 Star which operates in Andheri, a western suburb of Mumbai. Kohli claims to have added 250,000 subscribers in recent months through aggressive acquisitions. WWIL is offering to cable operators a valuation of Rs 2,000-3,000 per subscriber where it will hold 51 per cent stake.

    “However, our focus now is to roll out the digital boxes. We will be soon introducing various packages,” Kohli says.

    WWIL will introduce a combo package where consumers who buy STBs on outright purchase and take annual subscription will be offered an attractive subsidy, Kohli says. This scheme will make available 100 TV channels. “We will be offering under this at least 20 pay channels. We will be subsiding the boxes,” he adds, while declining to spell out the pricing structure of the package.

    WWIL’s initial fund requirement is Rs 5 billion and the company plans to invest Rs 7.14 billion over two years. “We have already lined up a debt of Rs 2.15 billion,” Kohli says.

    WWIL is likely to list by mid-January or early February, he adds.

  • Hathway launches digital cable in Mysore

    MUMBAI: Hathway Cable & Datacom has launched digital cable TV service in Mysore through a fibre linkup from Bangalore.

    The multi-system operator (MSO) will have the Scientific Atlanta (SA) solution using the digital content manager (DCM) which supports gig interface (GbE ports) for transmitting the 130 channels over STM4 bandwitdh.

    On the recieving end, is the SA’s digital qam (XDQ). This is an ideal bridge between flexible IP and Giga bit ethernet based backbone networks and existing qam set top boxes.

    Hathway plans to launch the service soon in Nashik, the company said in a statement. Digital cable is already available in Chennai, Mumbai, New Delhi, Pune, Bangalore, Hyderabad, and Punjab.

    The digital set-top box (STB) will offer over 130 TV channels and other value added services like interactive gaming, the release added.