ITV

Category: Cable TV

  • DAS Phase III status report: East and West

    DAS Phase III status report: East and West

    MUMBAI: Though the deadline was announced well in advance, the action on-ground took quite some time to get rolling. And now it’s certainly too late to finish on time. “It’s chaos and carnage together. Digitisation, which was meant to be a panacea has turned out to be a poison for cable operators and it’s sad that there is no one to stand by their side,” said a retired official from the Ministry of Information and Broadcasting (MIB) on condition of anonymity.

     

    As per the official’s assessment, on an average, 40 per cent seeding of set-top-boxes (STBs) has been done successfully and it will be impossible to meet the 31 December, 2015.

     

    Digitisation is an East – West – North – South affair and the progress report is quite similar everywhere. This report by Indiantelevision.com covers the proceedings of the eastern and western parts of the country.

     

    East

     

    The North Eastern part of the country has always been one of the most neglected areas when it comes to central government’s attention. The story is no different when it comes to DAS too. “People here are not aware of 10 per cent of the laws. There is nobody to go to and talk about grievances. Not everyone can go to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) as they cannot afford to. So they have two options, to either opt out entirely from the cable business or succumb to unfair means. While there are grievances involved, we cannot expect work to go on a brisk pace and it’s all delayed,” Task Force member from Assam Iquebal Ahmed tells this website.

     

    While Ahmed refrained from putting a number to the progress but as per the assessment of other cable operators, approximately 30 per cent of the seeding has been done so far.

     

    And this 30 per cent is still on higher side the story is even worse in West Bengal. “Only eight to 10 per cent of the seeding has been done so far,” estimates Siticable Kolkata director Suresh Sethia. But he also says the work has picked up recently and it is not impossible to meet the deadline provided there is a surge in consumer demand.

     

    “The government has to advertise more aggressively by putting more newspaper inserts to drive consumer requirement. The message needs to be very clear that people need to have set top boxes before 31 December or there will be no TV,” stresses Sethia.

     

    The crisis of STBs, which is very widely spoken about is not something Sethia is bothered about. “As far as we are concerned, we have enough hardware to meet the demand,” he says confidently.

     

    West

     

    The west side story is a lot better in comparison. “About 60 per cent of the seeding has been done in Gujarat and if we continue with the way we are forging forward, there is a good possibility of us reaching the target by March if not December, provided the deadline is not postponed. However, if the deadline is postponed, the momentum of work will break since the pressure will ease off and then we might not be able to achieve it by June,” says GTPL Hathway COO Shaji Mathews.

     

    Mathews is of the opinion that deals with broadcasters cannot be a reason behind the delay. “Even in Phase I and II, analogue deals continued in digitised areas for a brief period. The transition takes time and will gradually fall in place,” he adds.

     

    However, the progress report in Maharashtra is not as hunky dory as that of Gujarat. The Maharashtra government, like the Central government, is adamant on no extension of deadline. The respective collectors have also communicated the same across every nook and corner. But there is a huge lack of awareness among consumers, says a senior member of Nasik District Cable Operators Federation.

     

    He further adds, “Do we have the infrastructure ready? Why are we not talking about that? The MSOs will benefit the most from this chaotic scenario. They are not releasing the boxes now and the reason is that when the demand hikes up at the last moment, they can jack up the price and sell. DEN is charging Rs 1600 for a STB! Can a phase III consumer afford it? The government needs to look into the deeper issues and generate more awareness instead of showing its muscle power.”

     

    What the scenario at the ground level will be post 31 December, 2015, only time will tell.

     

    Indiantelevision.com’s next report will focus on the ground realities in the Northern and Southern parts of the country. Stay tuned.

  • AIR/DD engineers to inspect MSO set-ups for DAS; b’casters asked to stop signals to unlicensed MSOs

    AIR/DD engineers to inspect MSO set-ups for DAS; b’casters asked to stop signals to unlicensed MSOs

    NEW DELHI: Broadcasters have been asked to ensure that signals should not be made available to those multi-system operators (MSOs), who have not received registration from the Ministry of Information and Broadcasting (MIB) and who do not provide digital encrypted signals in Digital Addressable System (DAS) Phase III areas from the cut off date of 31 December.

     

    This was conveyed at a meeting convened by the MIB with over 120 MSOs, which was held prior to a meeting of the Task Force over the weekend for the third phase of DAS.

     

    The Ministry has deployed engineers from All India Radio and Doordarshan to inspect the technical set ups of MSOs.

     

    The status of digitisation and stock & supply position of set top boxes (STBs) was also reviewed and all stakeholders were requested to ensure that seeding of STBs is completed in Phase III areas by 31 December so that consumers do not face any difficulty due to stoppage of analogue signals.

     

    In the 12th Task Force meeting held over the weekend presided over by its chairman and Ministry Special Secretary J S Mathur and Joint Secretary (Broadcasting) R Jaya, broadcasters were advised to increase the frequency of publicity on cable TV digitisation and to ensure that it is carried by all the approved TV channels. 

     

    While a public awareness campaign is being carried by all stakeholders; the meeting was told that the multilingual Toll Free Helpline and 12 Regional Units are operational.

     

    The government has updated the list of urban areas to be covered in Phase III for 24 States & Union Territories after comments from State/UT Governments.

     

    In response to the concerns raised by some of the stakeholders about delay in signing of interconnection agreements between Broadcasters and some MSOs, it was decided that these MSOs may furnish the details of pending cases to the Telecom Regulatory Authority of India (TRAI) by the middle of this month for holding immediate meeting with Broadcasters.

     

    As was earlier reported by Indiantelevision.com, TRAI will hold a meeting with stakeholders on 18 December to iron out any problems in this regard.

     

    In the meeting with MSOs, it was emphasised that MSOs must carry public awareness campaign on cable TV digitisation on their local channels and by distribution of leaflets, holding meetings and putting kiosks etc.

     

    A demo of the MIS system, which has been deployed to collect seeding data of STBs online from all operators, was also made.

     

    MSOs who have not started feeding the seeding data in MIS were advised to start immediately and update it regularly.

     

    It was informed that multilingual Toll Free Telephone Number 1-800-180-4343 to answer queries of stakeholders, including consumers, for seamless transition to digitisation is already operational and they were advised to publicise it.

     

    As was reported earlier, all stakeholders were told categorically that there would be no extension of the deadline for Phase III and analogue signals should be switched off from 1 January, 2016 in all urban areas of the country. The final phase covering the rest of India will be completed by 31 December, 2016.

     

    TRAI had earlier asked all stakeholders to apprise it by 28 October of any problems arising out of finalising agreements amongst various stakeholders.

  • MSOs, LCOs upbeat about Hinduja’s NXT Digital HITS platform

    MSOs, LCOs upbeat about Hinduja’s NXT Digital HITS platform

    MUMBAI: The Indian television industry is bracing itself for the third phase of digitisation as the deadline for Digital Addressable System (DAS) ends on 31 December, 2015.

    Phase III deadline of digitisation is what the broadcast ecosystem has been talking for a year now. While on the one hand, the government of India has time and again made it clear that there will be no extension of deadline, which is 31 December, 2015, on the other, stakeholders are pointing fingers at the system as the teething issues like inter-connect agreement (ICA), CPS deals et al are yet to be taken care of. In a recent notice the Ministry of Information and Broadcasting (MIB) headed by Arun Jaitley and MoS RajyavardhanSingh Rathore, has asked broadcasters to stop beaming analogue signals to all MSOs. Now with only days to go, people are still unclear as to what’s ahead.

    Amidst the chaos of litigations between stakeholders and various pot-shots being fired, Hinduja’s Headend In The Sky (HITS) platform NXT Digital found its calm in doing actual ground work before launch.

    Harvard Business School professor Rosabeth Moss Kanter once said, “Leaders must pick causes they won’t abandon easily, remain committed despite setbacks, and communicate their big ideas over and over again in every encounter.” And that’s exactly what the team helming NXT Digital did. Prior to its launch on 16 September, the HITS platform carried out road shows involving Last Mile Operators (LMOs) in over 19 cities spread across the length and breadth of the country to communicate the new idea.

    While the initial reactions from the operators weren’t that encouraging, the lack of collaboration on-ground between existing MSOs and LCOs turned out to be a blessing in disguise for NXT Digital, which in turn fuelled its penetration into the hinterland. Now, MSOs and LCOs that Indiantelevision.com spoke to are upbeat about the new platform.

    An independent MSO from the North Eastern Province tells Indiantelevision.com, “I recently invested Rs 50 lakh to establish a cable head-end but as of now I don’t know how much I will be charging the consumers. The Cost Per Subscriber (CPS) model is not even talked about yet. Broadcasters are giving out different deals to different MSOs. If anybody asks me for a suggestion, I would tell them to go for HITS as it is a much more transparent platform.”

    Another impeding problem that the industry will soon face is a serious crisis of Set-Top-Boxes (STBs). While the boxes are assembled in India, the components are still being shipped from China. “The components have not yet been ordered. While a few have placed the first round of orders, there are many who are yet to do that. It takes three months for the components to be delivered from China and then an additional one month to assemble them. So it is certain that the boxes will not reach on time. The STB crisis will be there for NXT Digital too,” said a senior official of an established MSO.

    However, NXT Digital is unperturbed. A senior official of the company says, “There was going to be a set-top box crisis and we always knew about it. Hence we placed an order for four million boxes and there are close to 1.1 million boxes available for us at this stage. So NXT Digital is pretty sorted from the STB point of view.”

    If sources are to be believed, Star is charging Rs 38 for its bouquet in DAS Phase III areas, whereas the Zee bouquet costs close to Rs 30. Sony Pictures Networks India (erstwhile Multi Screen Media) is pricing its bouquet at Rs 24, while India Cast is charging Rs 20.

    On the other hand, NXT Digital is charging Rs 71 per box. “It’s a good deal. It’s just that they don’t have Zee in their package yet. But I don’t think it will take long for them to get them in,” says a reputed member of a Southern cable federation. “They are giving a total of over 300 channels and if there is a spike in demand, they have the infrastructure to meet it too. So it’s a good long term investment.”

    NXT Digital follows a prepaid model, which the Indian ecosystem is not yet used to. “That’s not really a big issue; people usually get used to it. I am getting a lot of positive feedback from the industry about the HITS platform. However, there’s one thing that I will request Mr Tony to look at and that is the exchange of STBs. People are not ready to forget the STB investment that they have already made to have one. If they give an exchange offer, it would be great for us,” opines an LMO.

    Now it remains to be seen how NXT Digital proceeds further and to what extend they succeed in capitalising the hinterlands.

  • Reliance Jio touches 70 mbps download speed during trials

    Reliance Jio touches 70 mbps download speed during trials

    NEW DELHI: The download speed on Reliance Jio’s 4G network during its beta-test phase peaked at 70 megabit per second but remained in 15-30 mbps range on most occasions, as per field trial report by brokerage firm Credit Suisse.

     

    “We experienced peak download speed of 70 mbps during our trials, and on most occasions in the 15-30 Mbps range, even on the move,” said the report by Credit Suisse Research Analysts Sunil Tirumalai and Chunky Shah.

     

    At 70 mbps download speed, a Bollywood movie size video can be downloaded in about half a minute while at 15-30 mbps, the same can be downloaded in about three minutes.

     

    The report compared the commercially launched 4G service of telecom major Airtel and beta network of Reliance Jio and found “Airtel 4G giving 10-20 mbps, often slower than Jio, and 3G network speeds of sub 2 mbps (peak 7 mbps).”

     

    Analysts found urban coverage of RJio network at par with incumbents but remarked rural coverage as “poor.”

     

    During trials analysts experienced call drop-free RJio network in Mumbai but lost signal three – four times when they entered on village roads.

     

    Analysts said that they experienced seamless phone call experience between Reliance Jio and network of other telecom operators.

     

    “Overall, our take away is that the Reliance Jio network is turning out to be as strong a threat to incumbents as we had feared. Next focus would be on pricing and marketing execution,” the report said.

     

    The conglomerate is planning to do a soft launch of the 4G services on Dhirubhai Ambani’s birth anniversary this year, which falls on 28 December.

     

    Credit Suisse analysts said that the speeds will fall once a commercial launch happens and more users get on to the network but globally 4G has delivered better speed than 3G services.

     

    The company has matched up with incumbents on coverage in urban area but there is not much rural focus.

     

    “Until the rural network is fixed, RJio could enter into roaming agreements with other operators. We suspect Jio would use sub-1GHz spectrum for rural coverage,” the report said.

     

    Commenting on handset availability for Reliance Jio’s 4G service, the report said that ZTE is making Reliance Jio’s LYF branded 4G handset and some handsets of Samsung, LG, Lenovo and ZTE also supported VoLTE calls.

     

  • Taj TV to restore signals of Digi Cable Com Services, subscriber base subject to BECIL audit

    Taj TV to restore signals of Digi Cable Com Services, subscriber base subject to BECIL audit

    New Delhi: Taj Television (Taj TV) has agreed to restore its signals to Digi Cable Com Services Pvt. Ltd and its joint ventures in the DAS areas after the Telecom Disputes Settlement and Appellate Tribunal worked out a formula over the subscriber imbroglio.
     
     
    Both parties had agreed on all issues except the subcriber base, and the Tribunal said this would be subject to an audit by the Broadcast Engineering Consultants (India) Ltd.
     
    Meanwhile on the Tribunal’s suggestion, the parties agreed that with effect from 1 December, the ad hoc subscriber base will be taken as 60000. However, prior to December, the ad hoc subscriber base will be taken as 55000. 
     
    Both these subscribers bases will be subject to the audit by BECIL and will abide by the subscriber base as determined after the audit. The audit of the BECIL will be completed within six weeks.
     
    Digi Cable Com Counsel Jayant Mehta said the subscriber base was 46000 but Taj TV counsel T S Bhatia insisted that it was 70000.
     
    Members Kuldip Singh and B B Srivastava noted that the subscriber base is purely an ad hoc interim arrangement and has to finally abide by the result of the audit by BECIL. 
     
     
     
  • Sky invests in US online TV company TV4 Entertainment

    Sky invests in US online TV company TV4 Entertainment

    MUMBAI: Sky has invested $0.3 million, via convertible debt security, in LA-based TV4 Entertainment, which owns a growing portfolio of special-interest television channels aimed at audiences which are typically underserved by traditional TV companies.

     

    The channels are distributed across multiple online platforms in the US including Hulu, Amazon, Sony, Vimeo, YouTube and Roku. 

     

    TV4’s portfolio includes a dozen channels, reaching millions of unique users every month. It has more than 30 new channels in development. The current portfolio includes: DocComTV aimed at documentary devotees; All Warrior Network for fans of the warrior genre; Motorland, a video network for automotive enthusiasts; the Ultimate Champion Network which has programming for combat sports fans; and The Clarity Project, a channel exploring child illness. 

     

    TV4’s strategy has been to acquire and aggregate high-quality video content into recognisable channel brands. Through more than 200 content partners, TV4 has licensed over 5,000 feature length and short form titles as well as many TV and web series. 

     

    The investment in TV4 builds on Sky’s ongoing programme of investing in innovative startups that help Sky bring new ideas, insight and services into its business. This follows recent investments in leading online sports network Whistle Sports, Pluto TV, the online video aggregator and the US ad tech firm Sharethrough. Sky has previously invested in a number of other pioneering US technology companies, including the IP streaming service provider Roku, the immersive 360 video specialists Jaunt and the OTT video delivery firm 1 Mainstream.

     

    Sky director – corporate business development Emma Lloyd said, “This exciting investment will help us develop our understanding of niche content genres and what audiences are most passionate about. We are committed to developing partnerships right across our business that support and extend our leadership position in content and innovation. We look forward to working with the team at TV4 Entertainment as they continue to grow.”

     

    TV4 Entertainment founder and CEO Jon Cody added, “Our goal in this round of investment was to bring on strategic global investors that could unlock business opportunities as we expand internationally over the next year. Bringing Europe’s top entertainment company in Sky into the TV4 Entertainment family is the perfect fit for this mandate. We look forward to growing the value of the Company for our shareholders while bringing tomorrow’s television to viewers across the globe today.” 

  • Durgapur MSO assures Star India and TDSAT it would rectify errors in its head-end

    Durgapur MSO assures Star India and TDSAT it would rectify errors in its head-end

    New Delhi: Durgapur-based multi-system operator Akash Tori Infocom Services Pvt Ltd has assured the Telecom Disputes Settlement and Appellate Tribunal  (TDSAT) that it will rectify the errors in its system pointed out by Star India.
     
    Chairman Justice Aftab Alam and members Kuldip Singh and B B Srivastava adjourned the matter to 11 December for further hearing after hearing counsel for both sides.
     
    TDSAT had on 4 November directed the MSO to make it convenient for Star India to examine its headends in Durgapur. Accordingly, Star India had conducted a technical audit. Some shortcomings were found and this was conveyed to the MSO by Star India in a letter.
     
    Akash Tori counsel Radhika Gupta admitted that shortcomings have been found in relation to set top boxes.
     
    Star India counsel Arjun Natarajan said the audit had revealed that Akash Tori’s Subscriber Management System (SMS) is not integrated with CAS for activation/deactivation of STB, which are not possible from SMS. Furthermore, the basic addressable features in STB, like channel encryption, package activation/deactivation are not available. Natarajan also said fingerprinting and OSD or messaging is not happening in STBs.
     
    Star India asked Akash Tori to rectify the shortcomings and after rectification, it said Akash Tori may either approach Star India for a re-audit, or go for an audit by Broadcast Engineering Consultants (India) Ltd.
     
    Ms Gupta said she would seek instructions from her client in this regard and take appropriate steps. The MSO had filed a petition seeking Star’s signals in digital mode on RIO terms. 
     
    In the earlier hearing on 4 November, TDSAT was informed by Akash Tori counsel Radhika Gupta that the MSO had not yet received some set top boxes it had ordered.
     
    When the matter had first come up on 19 October, the Tribunal had noted that Akash Tori was a ‘fledgling multi-system operator’ and ‘Star India cannot have any objection to give its signals on RIO terms to it, permitting Star to examine the headend of the MSO.
  • MCOF to organise 2 day event ‘NAFDI’

    MCOF to organise 2 day event ‘NAFDI’

    MUMBAI: Maharashtra Cable Operators Federation (MCOF) is set to unfold its two day special event named NAFDI (National Agenda for Digital India). The event will see Last Mile Operators (LMOs) participating from across the region.

     

    “With this event we are trying to chalk out a plan for the upcoming days. I know 31 December is knocking at the door but there are still few options that we can discuss and that’s what the event is all about” said MCOF president Arvind Prabhoo.

     

    The two day event commences on 28 November and will conclude the next day on 29 November. The organisers are also trying rope in executives form the regulatory bodies.

     

     

    “LMOS’ from all over the country have shown their keenness to attend this event to carry forward the Prime Ministers dream of Digital India” informed MCOF 

     

     

    The Agenda

     

     

    Agenda for NAFDI  (National Agenda For Digital India).

     

    Day 1

     

    9am- tea and breakfast

     

    9:20 a.m. : Welcome speech.

     

    9:40 to 11:00 a.m. : DAS DEADLINE – A THREAT OR OPPURTUNITY

    (Discussion on analogue sunset 31st December 2015 , action required for smooth implementation and maximum penetration of digital boxes)

     

    11:00 a.m. to 12:00 p.m. : LESSONS FROM PHASE 1 AND 2

    (Analysis on past mistakes done in phase 1and 2, its pros and cons faced by LMOs and where they stand now. Changes in MSO Strategies and their impact/B2B prepaid and STB sales)

     

    1:00 to 2:00 p.m. :lunch break.

     

    2:00 to 3:00 p.m. : RIGHT TIME TO SHAPE THE FUTURE

    Impact of FDI in Cable, pro consumer regulation and ICA.

     

    3:00 to 4:00 p.m.CONVERGENCE OF INFRASTRUCTURE AND SERVICES.

    (Role of Telcos and PSUs in Digital India)

     

     4:00 to 5:00 p.m.OUTSOURCING, THE NEXT BIG LEAP

    (Resource sharing, profiting from outsourcing)

     

    5:00 to 6:00 p.m. question and answers / tea break.

     

     

     

     

     

    Day two 29th Nov.

     

    9:00 to 9:30 a.m. :  Tea and breakfast

     

    9:30 to 11:30 a.m. : BROADBAND – THE FUTURE : Monetising the Pipe.

     

    11:30 to 1:00 p.m.Infrastructure development and F.D.I push…role of existing M.S.O affiliated LMOs .Changing Regulations, their impact and imposing GST…100% FDI approved.

     

    1:00 to 2:00 p.m. : lunch break.

     

    2.00pm onwards. National Alliance requirements on one India and one solution for digital India LMOs , suitable platform required.

     

    Tea break and summit curtain falls.

  • Q2-2016: Indian Cable TV companies report improved numbers, but only just

    Q2-2016: Indian Cable TV companies report improved numbers, but only just

    Indian Cable TV is a long haul work in progress is what we had said a couple of quarters ago and mentioned this in the last quarter also. The results of the same four sample companies in the quarter ended September 30, 2015 (Q2-2016, current quarter) in those reports once again endorse this fact. Albeit, all the four companies – the big three– Hathway Cable and Datacom Limited (Hathway), Den Networks Ltd (Den Networks), Siti Cable Network Limited (Siti Cable) and the minnow – Ortel Communication Limited (Ortel) reported a quarter on quarter (QoQ) increase in Total Income from Operations (TIO) in the current quarter, Year on year (YoY ),  TIO of three of the four companies increased, while TIO of Den fell. As expected, broadband subscriber numbers and revenues continue to grow.

    Operating margins (EBIDTA) of three of the four companies grew QoQ, and of two, EBIDTA grew YoY also. Overall the combined EBIDTA of the four companies grew QoQ, but declined by more than a third on a YoY basis. However, the results reported by the four companies show a faint glimmer at the end of the tunnel. How they perform over the next few quarters will tell if the Cable TV fairy tale is going to be real, or remain just a fable. In this paper, there can be no comparison of profit after tax, because, of the four, only one has posted profit after tax quite consistently-Ortel.

    Subscription revenues of all the four companies increased both YoY and QoQ. All the four companies reported increase in digitisation percentages. Carriage Fees show a declining trend in general. The combined Carriage Fees of the four companies was flat YoY but declined QoQ.

    The minnow wants rapid growth, and grow it should, because, as mentioned above, it is the only company among the four that has posted profit after tax. One of the avenues for growth that Ortel is looking at is LCO buyout. Ortel’s President and CEO Bibhu Prasad Rath said, “We are witnessing encouraging traction to our LCO buyout strategy in emerging markets like Andhra Pradesh and Chhattisgarh, and I am confident that this would sustain going forward. Also, going forward, we would continue with our strategy of aggressive LCO buyouts across all our markets and diligently integrate the new subscribers into Ortel’s last mile network.”

    Internet subscription revenue in the current quarter increased YoY and QoQ by more than double digits. All the four companies are focusing on broadband internet services, if one were to go by the comments of their senior personnel.

    “We are looking to further streamline our Broadband operations to provide stellar customer experience. Our commitment to digitization of Phase 3 areas remains and we expect this to gain further momentum in the coming quarter,” said Siti Cable Executive Director and CEO V D Wadhwa.

    Ortel’s  Rath said, “Healthy contribution from new RGUs (revenue generating units) along with ongoing focus on the high margin broadband business would enable us to deliver strong financial performance in the forthcoming years.”

    Note: (1) 100,00,000 = 100 lakh = 10 million = 1 crore.

    (2) Some figures are approximate.

    (3) Other income has not been factored in for EBIDTA in the report.

    (4) Siti Cable and Ortel numbers for Q3-2015 are estimates.

    (5) This paper is more skewed towards the financial performance parameters in a limited way, rather than the operational and operational performance parameters of the sample companies.

    Total Income from Operations grew both YoY and QoQ

    A major contributor to all the four companies revenues are revenues from their Cable TV Operations. All the four also offer internet services, and revenue from these services add to their revenues. Companies such as Den and Ortel have other revenue streams also. Total Income from Operations or TIO in this paper, is the sum total of all operating income generated by the company including ‘Other Operating Revenue’ such as revenue earned through advertisement,  activation and service charges, etc. TIO does not include other income such as interest, revenue earned through investments, etc. Den owns a football team and that is one of the revenue streams for its TIO, while Ortel is into infrastructure leasing that contributes to its TIO.

    Please refer to Fig 1 below for TIO for six quarters starting Q1-2015 until the current quarter Q2-2016. The combined TIO of all the four companies increased 1.7 percent (increased by Rs 14.10 crore) YoY to Rs 825.32 crore as compared to Rs 811.22 crore and increased 3.3 percent (increased 26.62 crore) QoQ as compared to Rs 798.70 crore. Ortel had the highest YoY and QoQ growth in percentage terms at 24.6 percent (Rs 9.04 crore) and 12.8 percent (Rs 5.19 crore) respectively. In absolute rupee terms, Siti Cable showed the highest YoY growth with Rs 14.97 crore (6.8 percent), while Hathway had the highest QoQ growth in terms of absolute rupees at Rs 9.62 crore (3.6 percent)

    EBIDTA

    Overall, operating profit or EBIDTA of 3 of the four companies has been increasing since Q4-2015. It is only Den that has seen a decline to the red since Q3-2015.

    YoY, the combined Earnings Before Interest, Depreciation, Tax and Amortisation (EBIDTA) of the four companies in Q2-2016 reduced by a massive 38.6 percent (reduced by Rs 50.73 crore) to Rs 80.57 crore as compared to Rs 131.30 crore, but increased 4.4 percent  (increased by Rs 3.37 crore) QoQ as compared to Rs 77.19 crore.

    Both Siti Cable and Ortel saw YoY and QoQ growth in EBIDTA in Q2-2016. In the case of Den, EIBIDTA declined both YoY and QoQ in the current quarter. Hathway’s EBIDTA declined YoY, but increased QoQ. Please refer to Fig 2 below.

    Cable TV Operations

    The major contributors to revenues of the four companies Cable TV Operations are Subscription revenues and Carriage or Placement fees. Activation fees also contribute to Cable TV Operations revenue.

    It must be noted that Cable TV Operations revenue in this article and the chart below includes only these three streams. Other revenues which are not included are Advertisement revenue, sale of traded goods, lease rentals, management charges, other networking and other income, etc.

    As mentioned above, all the four companies in this article reported QoQ increase in total income from their Cable TV operations in the current quarter. YoY also, three of the four companies reported growth in revenue from their Cable TV operations.

    The combined total revenue from Cable TV Operations of the four companies was almost flat (reduced by less than 0.1 percent or Rs 0.7 crore) YoY at Rs 699.20 crore as compared to Rs 699.90 crore and increased 1.4 percent (increased by 11.1 crore) QoQ from Rs 688.10 crore.

    Please refer to Fig 3 below that shows a snapshot of revenue from Cable TV operations. In terms of revenue from Cable TV Operations, Siti Cable overtook Hathway in Q3-2015 and is now placed second among the four with Den placed at the pole position.

    The company with the highest YoY and QoQ growth in terms of absolute rupees was Siti Cable with revenue from Cable TV operations growth of Rs 11.40 crore (grew by 5.5 percent) and Rs 5.40 crore (grew by 2.5 percent) respectively. Siti Cable’s Cable TV Operations revenue in the current quarter was Rs 218.20 crore, in Q2-2015 it was Rs 206.80 crore and in the immediate trailing quarter, it was Rs 212.80 crore.

    Ortel had the highest YoY and QoQ growth in Cable TV Operations revenue in percentage terms.  Ortel’s Cable TV Operations revenue grew 12.3 percent (increased By Rs 3.40 crore) YoY and grew 8.8 percent (increased by Rs 2.5 crore) QoQ.

    Cable TV Subscription Revenue

    The combined Cable TV Subscription revenue of all the four companies in Q2-2016 increased YoY and QoQ by 0.2 percent (increased by 0.80 crore) and 2.2 percent (increased by Rs 8.10 crore) respectively. Combined Cable TV Subscription revenue in the current quarter was Rs 381.60 crore, in Q2-2015 it was Rs 380.80 crore and in the immediately trailing quarter it was Rs 373.50 crore.  Siti Cable’s Cable TV Subscription revenues have been the highest among the four players in this report.

    Last quarter (Q1-2016), despite the flat  QoQ ARPUs and higher subscription numbers, Siti Cable’s Cable TV Subscription revenue fell QoQ because  the company had initiated strict measures against erring LCO’s and had switched off signals to the extent of about 4 lakh cable TV consumers say industry sources. The action seems to have been partly successful, because the company’s QoQ Cable TV Subscription revenue increased by 7.4 percent, but did not achieve the Rs 142.40 crores of revenue levels it had in Q4-2015.

    Please refer to Fig 4A below. In absolute rupee terms, Siti Cable’s Cable TV subscription revenue growth was the highest, both YoY and QoQ at Rs 3.50 crore (increased by 2.6 percent) and Rs 9.50 crore (increased by 7.4 percent) respectively. For the current quarter, Siti Cable had Cable TV Subscription revenue of Rs 138.50 crore, in Q2-2015 Siti Cable’s Cable TV Subscription revenue was Rs 135 crore and it was Rs 129 crore in the immediate trailing quarter.

    In percentage growth terms, Ortel’s Cable TV Subscription revenue increased by 4 percent (increased by Rs 0.80 crore), while QoQ, it was Siti Cable that reported the highest growth in terms of percentage in the current quarter as compared to the immediate trailing quarter, as mentioned above.

    Please refer to Fig 4B below.  Though Cable TV Subscription revenue has been increasing in absolute rupees, its contribution to Cable TV revenues has been declining. In the case of Den and Hathway, which have more number of Cable TV subscribers, Cable TV Subscription revenue’s contribution to Cable TV revenue was around 50 percent, while in the case of Siti Cable and Ortel, Cable TV Subscription revenue contributes to around two thirds to Cable TV revenues. The author would like to remind the reader that Cable TV revenue in this report includes only Subscription, Carriage or Placement and Activation revenues only.

    Carriage Fees or Placement Revenue

    Combined Carriage Fees of the four companies saw a 5.9 percent (Rs 16.70 crore) decline QoQ to Rs 265.80 crore as compared to the Rs  282.50 crore and was flat YoY as compared to Rs 265.80 crore.

    Three of the four companies saw a YoY growth in Carriage fees, while Den Carriage Fees declined both YoY and QoQ. Siti Cable saw the sharpest QoQ decline in Carriage Fees of 17.3 percent (reduced by Rs 12.6 crore).  Hathway and Ortel saw YoY and QoQ growth in Carriage Fees. Please refer to Fig 5 below.

    Carriage Fees contribution to Cable TV revenue shows an increasing trend in the case of Hathway and Ortel, while in the case of Den and Siti Cable the trend is declining. Please refer to Fig 5B below.

    Broadband Subscription revenue

    As mentioned above, all the four companies have reported growth in Internet Subscription revenue. The combined Internet Subscription revenue of the four companies increased 62.1 percent (increased by Rs 37.1 crore) YoY to Rs 96.80 crore in the current quarter as compared to Rs 59.70 crore and increased 12.2 percent (increased by Rs 10.50 crore) QoQ as compared to Rs 86.30 crore.

    Please refer to Fig 6 below. Hathway has the highest number of internet subscribers among the four players and its Internet Subscription revenue grew the highest in terms of absolute rupees YoY by Rs 26.50 crore (increased by 58.4 percent) and  by Rs 6.8 crore (increased by 10.4 percent) QoQ. In percentage terms, Den’s Internet subscription revenue grew to almost six-fold (increased to 5.85 times, by Rs 6.80 crore) and increased 57.7 percent (increased by Rs 3 crore) QoQ.

  • Neo Sports’ Mautik Tolia opens up on the Impact of DAS

    Neo Sports’ Mautik Tolia opens up on the Impact of DAS

    DAS (digital addressable system) is here to stay. Despite the shortcomings, the hiccups in the implementation of the first two phases, the government has announced that it will not extend the deadlines of December 31, 2015 for phase III areas and December 31, 2016 for phase IV, when the entire country is expected to be digitised. After complete switchover, cable TV services will be available only through set top boxes in India.

     
    We, at the Indiantelevision.com are starting a new section – ‘The Impact of DAS’ through which thought leaders, experts from the television ecosystem will share their thoughts, ideas, and say their piece on the subject. We are beginning with the impact of DAS on the sports broadcasting ecosystem. 

     
    Our expert for the section is Neo Sports EVP programming Mautik Tolia.

     

    Excerpts:

     

    How big an impact has phase I and II digitization made when it comes to subscription revenue?

     

    Digitization has been a big step forward not just in terms of revenue but in providing secular access to viewers to more sports events, apart from just cricket. As India moves more and more to a multi-sport fan universe, digitization will continue to play in important role in increasing the popularity of all sports. Combined with the increasing market share of DTH platforms, which in turn enhances the reach of sports networks without whimsical interruptions (which were a constant feature in the analog domain) we at neo sports see other sports climbing to a 40 per cent share of revenue universe in 3 years time.

     

    From sports broadcaster’s point of view are you happy with the two phases of digitization?

     

    Doubtless there have been roll out issues and delays in implementation but on balance digitization has been a positive. It will be some time before more sophistication is achieved in packages and tiers, which will steadily take us to a CPS billing norm. Transparency in billing remains a challenge but we believe that too will be resolved in the next 2-3 years.

     

    Is the sports broadcasting industry in a subscription positive scenario? Or we are still ad dependent?

     

    From a 90:10 ad: subscription ratio 10 years back, the sports broadcast industry has probably moved to a 70:30 maybe even 65:35 ratio. This may even be 60:40 or 55:45 in the case of some networks. Due to significant ad spend on cricket, especially IPL this ratio will inch its way to maybe 50:50 in 3 years for the industry as a whole.

     

    Are sports like Football, Badminton which are hugely popular but have very little room for advertisement profitable assets for broadcasters?

     

    Aside of Cricket, the dominant sports are football, tennis, golf, hockey, badminton and motor sport. Except for Football and Badmnton, others have adequate ad break potential. At Neo Sports we believe that it is more a question of focus, ability and experience when it comes to monetizing sports other than cricket.

     

    With phase III and IV scheduled do you see a substantial inclination in subscription revenue?

     

    We see further momentum in subscription revenues, reach and secular access for all sports in phase 3 and 4.

     

    How can a non cricket sport or a sport with least ad room turn profitable for broadcasters in India?

     

    The profitability conundrum is more a function of irrational acquisition prices and lack of focus on monetizing all sports. We have seen at least one sports broadcaster recently pay over the top for rights that were being jettisoned by another and for which there may well have been no other takers. Ill informed and panic buying has resulted in lack of profitability for some. At Neo Sports we believe that intense discipline is required both with acquisitions as well as in monetizing assets. Wise spending may not make a sports broadcaster no 1 but there are plenty of sports rights constantly available, the universe of sports fans is rapidly expanding, advertisers are increasingly willing to spend on sports other than cricket and affiliate platforms understand that tens of millions of viewers are tuning into other sports – hence there is room for multiple sports networks and increasing opportunity for revenue and viewership expansion.