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  • Broadband Asia & TV Connect Asia 2013 returns to Hong Kong

    Broadband Asia & TV Connect Asia 2013 returns to Hong Kong

    MUMBAI: The ninth edition of Broadband Asia & TV Connect Asia 2013, Asia Pacific’s largest broadband and media event, is set to relocate back to Hong Kong.

    Co-located with TV Connect Asia, the conference and exhibition will highlight visionary new developments in TV and broadband, bringing together the two ecosystems and their leading figures from across the region.

    The event’s focus is reflected throughout its agenda which has an impressive speaker line-up that will give visitors exclusive insight into the latest advancements in mobile and fixed broadband, and the content evolution.

    The two-day event is made up of two programme tracks which complement each other to reflect the nature of the converging broadband and connected entertainment industry.

    Day One will address fixed access evolution, mobile and wireless opportunities, business models, the digital home, making TV multi-screen, and effective content delivery management, while Day Two will focus on leveraging broadband networks, capacity and accessibility, effective TV delivery and content business strategies.

    Combined keynotes will take place across both days with C-level speakers, including CSL, Celestial Tiger Entertainment, Youku Tudou, Hulu, Telstra, Telecom New Zealand and KT (Korea Telecom).

    As the event’s official Host Operator Partners, Hong Kong’s leading operators PCCW and HKT have come forward as supporters of the conference and exhibition.

    The event also has support from CSL, Pacnet and the Commerce and Economic Development Bureau for Hong Kong.

    The conference agenda also boasts a joint super session on Day Two, set to focus on tackling content piracy in the Internet Age. Here, leading figures from News Corporation, Media Partners Age, Motion Pictures Association, PCCW-HKT and CASBAA (Cable and Satellite Broadcasting Association of Asia), will lead the discussion on this hot topic.

    Broadband Asia & TV Connect Asia HKT’s Group Managing Director, Alex Arena, will provide the host keynote.

    Arena comments: “PCCW and HKT are very excited to have this event return to Hong Kong where we look forward to greeting a wide range of delegates from across the region and beyond. This is a highly valuable opportunity for us all to meet new partners, discover new business opportunities, benchmark your own business and to gain insight into the hottest topics facing the broadband and TV industry in the Asia Pacific region.”

    Susie Ho, Permanent Secretary for Commerce and Economic Development (Communications and Technology) at Hong Kong’s Commerce and Economic Development Bureau, will open the conference and exhibition with a Ministerial welcome address.

    Visitors will benefit from conference sessions delivered by over 150 visionary speakers and an exhibition featuring leading industry solution and technology providers.

    The event’s VIP Executive Summit is also back for another successful year, taking place on Day One and bringing together top executives in the industry for an exclusive exploratory session.

  • Tewari says govt pursuing Phase II digitisation deadline

    Tewari says govt pursuing Phase II digitisation deadline

    MUMBAI: Information & Broadcasting (I&B) Minister Manish Tewari said the government will pursue implementation of the second phase of switchover to digital delivery of television channels in 38 cities with population of one million.

    The government has mandated digitisation in the 38 cities by 31 March, after going ahead with the first phase of digitisation in Mumbai, Delhi and Kolkata. The switchover to digital delivery in Chennai is stuck in court proceedings initiated by Tamil Nadu cable operators against digitisation itself.

    “We will stay the course,” Tewari said in response to a question about digitisation in the 38 cities when he was in the city to give away the first edition of International Advertising Association’s leadership awards. He further said, “Phase II digitisation is on track.”

    He said the government has the learning from the implementation of phase I digitisation and expected all the stakeholders to be firmly backing the effort.

    Addressing the advertising fraternity, advertisers and the media, the I&B Minister dwelled on the issues concerning the media and advertising industries. These included freedom of speech with reasonable restrictions, imperfect television audience measurement model, the need to observe advertising regulations on television and self-regulation vs statutory regulation of content.

    He asked all concerned to think whether content can remain in the self-regulation domain, while suggesting an overarching statutory mechanism to address issues related to convergence across media, entertainment and telecom.

    Tewari assured the media and advertising industries that they will be taken into confidence before taking any decision on any of the contentious issues.

  • Jaibeer Ahmad quits Saatchi & Saatchi to join Cheil Worldwide

    MUMBAI: Saatchi & Saatchi vice president Jaibeer Ahmad has decided to move on from the agency after a stint of over two years.

    Ahmad is on his way to join Cheil Worldwide. However, his designation at Cheil is still not announced.

    He will continue to be based in New Delhi. His responsibilities at Saatchi & Saatchi included driving top line growth through organic and new business development, relationship management, ownership of the strategic and creative output for all brands, team building, retention and training.

    Ahmad has over 12 years of experience in advertising and marketing. He has worked across multiple product categories including Telecom, FMCG, Durables, Online and Media others. He has worked with brands like Airtel, Nestle, LG, Samsung, Whirplool, SC Johnson, Carlsberg, OLX and India Today.

    Prior to joining Saatchi & Saatchi, he had also worked with DRAFTFCB+Ulka Advertising, Ogilvy & Mather, Lowe Lintas, Samsung Electronics, Rediffusion DYR and RKSwamy BBDO.

  • Sports emerging as preferred marketing tool for brands: SportzConsult

    MUMBAI: Sports emerged as the most preferred marketing tool over celebrities, events and product placements in movies, music or art, according to a survey conducted by SportzConsult, a Mumbai-based sports management company.

    The survey spoke to over a hundred senior marketing professionals across sectors such as FMCG, Automotive, Telecom and BFSI. Of this group, 83 per cent have already used sports in their marketing campaigns and 72 per cent have seen positive results.

    Of the brands that have not yet used sports as a marketing tool, 77 per cent have affirmed it as a course of action in the near future, as per the survey.

    The survey was designed to demonstrate the trends and perceptions in the use of sports as a marketing tool among brands in India, including the primary reasons to engage sports for brand marketing, the channels of engagement, key audiences and evaluation of sport based marketing campaigns.

    Commenting on the results of the survey, SportzConsult Co-Founder and CEO Jitendra Joshi said, “Sports has the power to mobilise and motivate. In the coming years, brand managers have the huge opportunity to leverage the positive attributes of sports and earn better ROI on marketing spends. The growing adoption of sports for marketing among corporate India will be a win-win for both brands and consumers.”

    Passion drives brands to sports

    Passion, youthfulness and the association with active lifestyle came up as the top attributes for choosing sport over other options. Nearly 75 per cent of the respondents favoured one of these attributes as the key driver for a sports engagement.

    Only one quarter of the respondents cited iconic nature of the sportsmen as the key reason for associating with sport. Given the fact that over 50 per cent of the population are under the age of 26 years, marketers believe that sports is the most attractive platform to engage their target audience.

    While popular sports like cricket and football are still the top choices for marketers, it emerged in the survey that these choices may not always provide the real bang for buck, especially if you want to concentrate on a niche audience.

    According to many brands ( more than 40 per cent of the respondents), an exclusive sport like golf or traditional sports like Kho-Kho & Kabaddi are a much better way to engage the relevant target group.

    Moreover, the heightened need for a healthy and active lifestyle among working professionals is making marathons increasingly popular among marketers, as 24 per cent of the respondents cite a marathon as an ideal marketing opportunity.

    Sports is a strategic and long term commitment among Indian marketers

    More than half the respondents looked at their association with sports for brand-building as strategic and long term, indicating the growing relevance of sports in the marketing mix. Of this group, 67 per cent of the respondents considered using sports as a strategic long term decision rather than a tactical approach.

    While over 70 per cent of respondents count TV advertising spots as the main component of their engagement with sports, almost 95 per cent cited professional event sponsorships as the best option for brands looking at stepping up their reach among the TA. While over 85 per cent of the brands used existing sports properties, 45 per cent of them had also created their own properties around sports as part of their marketing campaign. However, the survey also revealed the perception that creation of sports properties is risky, as against investments in popular properties.

    The number of participants and spectators emerged as the most important criteria that brands cite in evaluating a sports program. The next two important factors while evaluating a sports program were the opportunities to leverage brand with the event and media promotion and impressions.

    Spend on sports sponsorships to go up

    Over 65 per cent of the brands responding to the survey have spent over Rs 10 million on sports-led marketing campaigns, while 35 per cent of the group has spent over Rs 50 million. Not surprisingly, IPL attracts the big chunk of sports sponsorships spends. 60 per cent of the total respondents have confirmed an increase in their investments in sports in the coming years. However, despite this buoyant interest in sports as a marketing tool, around 30 per cent of the respondents still spend less than 10 per cent of their marketing budget on sports, citing the nebulous nature of sports sponsorships in India.

    Effectiveness of sports-led marketing campaigns tied to sales and customer perceptions

    As much as 82 per cent of the respondents measure perception changes owing to the sports-led campaigns, while 62 per cent of the group preferred tangible results such as direct impact on sales as the top criteria for evaluating the success of a sport-led marketing campaign. Yet, over 50 per cent of the group believe that the need of the hour is a more effective evaluation toolkit to measure the impact of sports-led campaigns.

    Leveraging sports sponsorships

    The survey revealed that while sports sponsorships are popular, Indian marketers, have not mastered the art of leveraging sponsorship programs for continued and long-term marketing success. While sponsorships help brands attain reach and visibility among TA, leveraging the sponsorship is generally more crucial to meeting one’s marketing and organisational goals. In India, only 7.2 per cent of the brands have invested 100 per cent equivalent of the sports sponsorship investments (a norm in markets such as the US and Europe) in leverage programmes, while nearly 38 per cent of the brands invested an equivalent of less than 25 per cent of the sponsorship spend on these programmes.

  • Telecom ad spend continues to grow: Nielsen

    MUMBAI: Though many industry sectors are spending cautiously in today‘s uncertain economic environment, telecom companies invested significantly more on advertising in the first half of 2012 than they did last year, according to Nielsen‘s Global AdView Pulse report.

    With a 7.9 per cent increase in global ad spending, the telecom sector saw the largest increases in emerging markets, like Latin America (32.5 per cent) and the Middle East and Africa (28.3 per cent).

    After more cautious spending during the first quarter, the automotive sector also boosted ad spending by 6.3 per cent during the first half of 2012, compared with the same period last year.

    Even in the embattled region of Western Europe, advertising spending increased by 1.4 per cent when comparing the first halves of 2012 and 2011.

    Entertainment‘s ad spend grew by 6.3 per cent. The media sector grew by 4.9 per cent. The financial sector‘s spend grew by 4.5 per cent. The durables segment saw a reduction in ad spend by 4.4 per cent. The healthcare sector along with Industry and Services also saw reductions in ad spend.

  • VML Qais appoints Natasha Kapur as business director

    MUMBAI: VML Qais has appointed Natasha Kapur as business director. This appointment marks the expansion of VML Qais‘ India operations to Delhi. The Delhi office will offer digitally-led marketing experiences with in-house service lines across strategic planning, creative, research and analysis, social and digital media.

    Kapur joins VML Qais with over a decade of experience in digital marketing, brand management and strategic initiatives across India, Asia Pacific, USA and Europe. She has worked with companies in the media, advertising and telecom sectors. She has conceptualised, co-created and driven digital marketing strategy and integrated marketing campaigns, both at a global and national level, building many successful brands during her career.

    In her earlier role, Kapur was senior manager – strategy and communications at Sony Mobile. She was responsible for developing and driving integrated marketing strategy and communications for Sony Mobile‘s mobile content and services ecosystem, that included mobile app stores, graphics, games, music, movies and device management services on a global level.

    VML Qais Asia CEO Tripti Lochan said, “With Natasha‘s rich experience in brand building using digital and new media, platforms, partnerships and tools, she is ideally suited to join our team and provide thought leading, cutting-edge digital marketing experiences to clients.”

    “I‘m really looking forward to building great brands for companies by creating engaging experiences for consumers wherever they live in the digital universe, and am pleased to be joining the VML Qais team during this exciting stage in their India journey,” added Kapur.

  • Aircel brings to the youth a ‘Limitless’ proposition

    MUMBAI: Telecom brand Aircel has launched a campaign to communicate its latest proposition for the youth – ‘Limitless‘ which is about bringing to the youth limitless friendship, fun, music, games, and hanging-out together with friends 24×7.

    The campaign includes a new TVC to promote Aircel‘s new product – Aircel Pocket Buddies which offers limitless surfing and texting options. The TVC stars south Indian actor Suriya and is directed by Kunal Kohli.

    The advertisement is conceived by McCann Worldgroup India chairman Prasoon Joshi and will be on air from 24 September across all electronic channels. The advertisement demonstrates the limitless joys that people will experience through Aircel‘s Pocket Buddies.

    The ad follows a girl‘s life who is overwhelmed as she is connected to the boy of her dreams wherever she goes. It is accompanied by a soundtrack composed by music composer Shantanu Moitra. The ad takes the tagline ‘Life mein koi limit nahi hai.‘

    Aircel Limited head marketing OPCO Anupam Vasudev said, “Youth has always been the primary focus for Aircel. The youth of today is digital savvy who like to stay connected with their friends, family and peer group. Aircel now makes it possible for them through the latest ‘Limitless‘ proposition.”

    Kohli said, “The new ad film is all about capturing fun, passion and dreams. It is about Limitless friendship, fun, music, games; Limitless hanging-out together; Limitless Opportunities to help you excel and Limitless connection with friends 24×7. All my films have always revolved around the youth and Aircel has given me this opportunity to continue my trend of working on youth centric projects. It is great working with a versatile and young actor like Suriya who touches the right cord with his audiences.”

  • ICICI, Airtel in world’s top 100 brands

    MUMBAI: Telecom major Airtel has become the new Indian brand to have made it to WPP company Millward Brown‘s annual BrandZ Top 100 Most Valuable Global Brands study.

    Valued at $11.53 billion, Airtel has joined ICICI Bank, the country’s largest private sector bank, to become the only brands from India to feature in the illustrious list which consists of world’s biggest brands.

    ICICI has been ranked 63 on the list, while Airtel is 71st most valuable brand in the world.

    Brand ICICI, which has seen its brand valuation decline by 15 per cent to $12,665 million, has made to the list for a record third time a row. The financial service major was ranked 45th most valuable brands in the world in the 2010 study, which has entered into its seventh edition.

    Apple No. 1 brand, IBM edges past Google

    The study notes that world‘s biggest brands have continued to grow in value even during the current economic uncertainty with Brand Apple, the number one brand for second year in a row, growing 19 per cent to $182.9 billion.

    American technology and consulting corporation IBM has eased past internet search giant Google to take number two spot. IBM grew 15 per cent in value to $115.9 billion and overtook Google, which dropped to third place in the ranking and is now worth $107.8 billion.

    In advance of its IPO, eight-year-old Facebook rose 74 per cent in value, making it the fastest brand value riser in the ranking. Worth $33.2 billion, the social network moved up to number 19 from 35.

    Apple sits at the top but faces competition in luxury brand segment to Samsung. Apple continues to innovate and maintain its ‘luxury‘ brand status, but faces future competition from Samsung. Now worth more than $14.1 billion, thanks in part to the success of its Galaxy handsets, Samsung is successfully outpacing Apple in a significant number of markets by positioning as a cool, well-priced alternative to the ubiquitous iPhone.

    The study, commissioned by WPP and conducted by Millward Brown Optimor and now in its seventh year, identifies and ranks the world‘s most valuable brands by their dollar value, an analysis based on financial data, market intelligence and consumer measures of brand equity.

    The 2012 BrandZ Top 100 Most Valuable Global Brands ranking demonstrates the power of strong brands as both a driver of new business growth and a critical support in hard times.

    In 6 years, Top 100 brands rise 66% to a value of $2.4 trillion

    Between 2006 and 2012, the total value of the BrandZ Top 100 rose 66 per cent and is now worth $2.4 trillion.

    “Brands are an insurance policy for businesses,” said Eileen Campbell, Global CEO of brand research company Millward Brown. “Despite a prolonged period of economic stress, political uncertainty and natural disasters that buffeted brands across many categories, the value of the world‘s leading brands keeps rising across many categories, sustaining and nurturing businesses.”

    David Roth for WPP said, “Brands help businesses create competitive differentiation, command a price premium and become more resilient to crises or economic turbulence. This year, those businesses that leveraged technology, focused on the customer experience or boosted control of their brands thrived.”

     

    ank 2011 Rank change Rank 2012 Category Brand

    Brand Value
    2012 ($M)
    1 0 1 Tech Apple 182,951
    3 1 2 Tech IBM 115,985
    2 -1 3 Tech Google 107,857
    4 0 4 Fast Food McDonald‘s 95,188
    5 0 5 Tech Microsoft 76,651
    6 0 6 Soft drinks Coca-Cola 74,286
    8 1 7 Tobacco Marlboro 73,612
    7 -1 8 Communication Provider AT&T 68,870
    13 4 9 Communication Provider Verizon 49,151
    9 -1 10 Communication Provider China Mobile 47,041

    Key findings highlighted in this year‘s research report include:

    Technology Prevails: Technology has become ubiquitous in all areas of our lives. Seven of the top 10 brands are technology or telecoms brands. However, the power of smart, simple-to-use technology can also be seen beyond these two sectors.

    In other categories – cars, financial services, luxury and retail for example – we can also see that brands are gaining significant advantages by using smart technology to enhance their customer experience. For example, Burberry – up 21 per cent to $4 billion – created a virtual world where younger brand followers can view fashion shows and more.

    The Rise of Africa: This year‘s ranking highlights the progress of Africa‘s economic development with the arrival of the first African brand in the Top 100 – South African mobile company MTN – No 88 at $9.2 billion. But it‘s not just African brands that are thriving south of the Sahara. Around 40 per cent of Guinness‘s sales come from Africa, Airtel‘s third quarter results showed a 16 per cent increase in revenue in Africa. Similarly, Orange enjoyed rapid growth in Africa in 2011, while Walmart invested there with the acquisition of Massmart.

    The Future is Mobile: The future of the internet will be predominantly mobile rather than computer based. Mobile, to some extent, has been shielded from the recession as one of the few items consumers don‘t want to give up or cut back on. The most valuable telecoms brand is AT&T worth $68.8 billion. USA‘s largest mobile service provider, Verizon, increased its brand value by 15 per cent in the last year and is now worth $49.1 billion.

    Retail is constructing an Omni-Channel Business: The customer experience is a new focus for many retailers as they recognise its importance in keeping customers loyal and the need to be present anywhere and everywhere on the path to purchase. Walmart knocked Amazon from the top position and its brand is now worth $34.4 billion whilst Amazon is now worth $34 billion.

    Brands with Women on the Board Outperform: As the number of women on corporate boards continues to rise, the BrandZ Top100 study this year reveals the success that women bring to brands. 77 per cent of the brands appearing in the BrandZ Top 100 Most Valuable Global Brands have women in the boardroom. The average value of brands with women on the boards is $27 billion, double that of those companies without female directors. Not only that, these brands also show an average five-year growth of 66 per cent compared to an average growth of only 6 per cent for those BrandZ Top100 brands that don‘t have a woman on the board.

    Strong Brands Provide Better Shareholder Value: An analysis of BrandZ Top 100 Most Valuable Global Brands as a ‘stock portfolio‘ over the last seven years shows a highly favourable performance compared to a current stock market index, the S&P500. While the total return on investment (ROI) for all companies in the S&P500 index was just 2.3 per cent, the BrandZ Portfolio provided a 36.3 per cent ROI, proving that companies with strong brands are able to deliver better value to their shareholders.

  • MTS ropes in Imran Khan as brand ambassador

    MTS ropes in Imran Khan as brand ambassador

    MUMBAI: Telecom brand MTS has signed Bollywood icon Imran Khan as its brand ambassador. The deal was facilitated by Kwan Entertainment.

    Sistema Shyam TeleServices, which operates MTS brand, and Khan have entered into a multiyear contract and the actor will play an integral part across all MTS‘ forthcoming campaigns.

    MTS India chief marketing and sales officer Leonid Musatov said, “Brand MTS is all about experimenting and doing things differently. When we cross mapped these attributes, Imran came across as a clear choice. Both believe in challenging the norm and being a ‘Step Ahead‘ when it comes to their appeal amongst the youth.”

    Khan said, “What drew me towards a global brand like MTS was its energy and its desire to connect and engage with people specially the youth. Given the times we live in, a national telecom operator like MTS is also a big unifier, connecting the nook and corners of our country. I am delighted to come on board and be a part of the same journey.”

    MTS plans to leverage Khan‘s association through mass media, online space and a range of on ground initiatives across all its key markets. The brand will offer an array of voice and data solutions to its customers including youth. This includes smart devices and MBlaze dongles through prepaid and postpaid plans. To further strengthen its engagement with the youth, MTS has rolled out ‘Red Energy‘ a youth outreach program. Khan is expected to be a part of this program.

  • ‘We are entering into an era where capital will be scarce’ : Citi Venture Capital International managing director India region head PR Srinivasan

    ‘We are entering into an era where capital will be scarce’ : Citi Venture Capital International managing director India region head PR Srinivasan

    There may be pressure on Citigroup Inc. to remove the flab with the US government agreeing to infuse $20 billion of capital as part of a rescue package, but Citi Venture Capital International (CVCI) is drawing up plans to make acquisitions at attractive valuations. Out of the $4.5 billion fund, it is yet to invest $3 billion, almost a third of which will pour into the Indian market.

     

    Though CVCI has made only one media investment in You Telecom, a broadband and cable TV company, it is also eyeing the direct-to home (DTH) and Hindi entertainment broadcasting space.

     

    In an interview with Sibabrata Das, Citi Venture Capital International managing director India region head PR Srinivasan talks about the opportunities of investing in various sectors including media at a time when capital is going to be scarce.

     

    Excerpts:

    Being in the midst of an unprecedented global economic turmoil, how comfortable is Citi Venture Capital International (CVCI) in its funding structure to grab buying opportunities in Indian media companies?
    We have a $4.5 billion fund, out of which $3 billion is yet to be invested. We have already invested $500 million in India. We are likely to pump in a further $750 million-$1 billion in this market while the balance will be put in China, Eastern Europe, etc. You Telecom has been our only investment in the media and entertainment sector. But as asset prices come down, we are open to picking up stakes in other verticals within the media sector.

    Have you initiated talks with any of the media companies?
    We see a good investment opportunity in DTH and are talking to one player. We may also start looking at TV channels in the Hindi general entertainment space, if they come at attractive valuations and are managed well. Even if we are headed for a slowdown, the truth is that people will still want entertainment. Since we have already acquired You Telecom, we are not looking at parallel investments in the cable TV sector. We would expand and make further acquisitions through You Telecom.

    Since CVCI has a running investment in a broadband and cable TV company through You Telecom, why is it that you are eyeing a competing distribution platform like DTH?
    There is space for all three forms of carriage – DTH, cable TV and IPTV. No form of distribution is superior or dominates over the other. In the US, both cable and DTH enjoy substantial market shares. The only country which has a single dominant platform is UK where DTH has a content advantage in form of exclusive sports telecast rights. India, however, has a content-neutral policy. The regulatory framework is also in favour of independent distributors and is neutral to broadcasters. The DTH sector also has a 20 per cent equity cap for broadcasting companies.

     

    The main cost in DTH is advertising. Unlike cable which has a capex requirement in the distribution architecture, DTH doesn’t have a wired cost. If you get scale in DTH, you will become profitable. The expense mix will change with volumes. But in India with so many players getting into the business, not all will get the scale.

    When CVCI bought out British Gas’s broadband business, was the investment attractive because the infrastructure of You Telecom could be used for cable TV service?
    You Telecom had world class network built to FCC standards. We were clear that we would buy this asset and wait for both competition and regulation to fall in place so that this can be developed into a last mile home entertainment network. When the government came out with Cas and DTH became active, digitalisation got a push. For the cable TV business to grow, there was need for competition, the right market, and the right regulation. We are in that environment today. India is in the early stages of having second TV – so we could have a situation where we have both cable and DTH.

    Were you not in discomfort because the cable TV sector has too many players and there is very little of last mile ownership with the multi-system operators (MSOs)?
    In terms of reaching homes, cable with 80 million does much better than telecom. The sector needs to get more organised; it is only a matter of time before this happens. The cable industry in India is a marathon and not a sprint. Though there is a capex requirement and last mile is still not under control of the MSOs, the mix looks good once you have a base of one million digital subscribers.
    ‘For the cable TV biz to grow, there was need for competition, the right market, and the right regulation. India is in the early stages of having second TV – so we could have a situation where we have both cable and DTH‘

    Why did You Telecom take so long in moving into cable TV service?
    Our efforts to do the video business evolved with the DTH industry. We acquired a 50 per cent stake in Bangalore-based Digital Infotainment, a small-sized cable network, to make our foray into the cable TV business. We also took a majority in Scod18 Networking, an association of cable TV distributors in Mumbai. We have cable TV operations in Mumbai, Bangalore, Vizag and Dharwad in Maharashtra.

    In You Telecom, CVCI has 85 per cent stake. How did you restructure the equity structure as the government allows only 49 per cent FDI (foreign direct investment) in a cable TV company?
    We floated Digital Outsourcing, the company that would handle cable TV business. Tulsi R Tanti and his family members, promoters of Suzlon Energy Ltd, have acquired 49 per cent stake in this company. You Telecom India owns 36 per cent while the rest is held by high net worth Indian individuals.

    How much is You Telecom investing to expand its business?
    You Telecom plans to pump in Rs 4 billion over the next two years to expand its cable TV and broadband business. If we decide to go for Headend-In-The-Sky (HITS), we will require another Rs 1.5 billion. We have 1.3 million cable TV subscribers and expect this to go up to three million. We have seeded 60,000 digital set-top boxes and expect to touch one million in the next 18 months. The cable business will grow through setting up own headends, acquiring networks and forming joint venture partners in different geographies. There is a lot of entrepreneurial talent in the cable community and we want to tap into that.

    Do you have an aggressive plan in acquiring last mile operators?
    The challenge in cable is to get direct points. We bought 5000-7000 points. Our strategy is to own last mile, but all in good time. Our plan is to own a headend and then acquire the last mile. The valuations for last mile were inflated because people thought there was abundant capital available.

    Have the valuations dropped drastically?
    For the last three years, there has been abundant capital and liquidity. Though we purchased at 18-24 months revenue, there were MSOs who bought at 30-40 months turnover. That kind of money is not available; we will not get financing for making purchases like that any more.

     

    Most of the mid caps have fallen over 80 per cent. The last mile business has to follow along those lines. People are not going to bid prices up. It is only a matter of time before people accept the new world realities. We are entering into an era where capital will be scarce. Business plans will have to evolve accordingly.

    Do you see yourself in an advantageous position because you are sitting on cash at a time when the credit markets are frozen and capital is hard to get?
    Money is not going to be available on tap. This will impact the way the new financial system is going to be reshaped. Every sector will feel the jolt. As new broadcasters need to raise capital, MSOs who have planned carriage revenues over the next 2-3 years to support their business models will find the going very hard. Many of them will have to redraw their plans.

     

    It is a good time to have cash. For those who are investing now, the returns will be higher than the previous years.