Sudhir Agarwal, CEO , WWIL, in an interview with ET Now talks about company’s overall condition and prospect. Excerpts:

ET Now: This is a good news for the industry as a whole, FDI in DTH being raised from 49% to 74%, give us a sense of what kind of an impact this could potentially have on WWIL?

Sudhir Agarwal: It is a very good and encouraging initiative from the government to raise the current FDI limit across platforms in our industry from 49% to 74% across DTH, IPTV, MSO platforms. As you would know, government recently announced an initiative to digitise the whole country and they came out with a sunset date of December 2014 when the entire nation would be digitised and that’s a huge announcement and industry game changing announcement as far as I am concerned. This would require a substantial amount of investment as well. My belief is the current announcement of raising the FDI would encourage a lot of foreign players who till now were kind of waiting and watching before investing into India because of the very nature of the business here, the distribution business was essentially very unstructured and analogue in nature. So this announcement coupled with the announcement, which happened a couple of weeks back for digitising the country would mean a lot for this industry going forward.

ET Now: Given that your FII limit is currently quite low around 4%, will this move? Will you look at more foreign institutional participation as well?

Sudhir Agarwal: I am sure and I am confident about it. You are right, current foreign investment into our company is low but with the announcement of digitisation, not only WWIL but companies across platforms would benefit. This would help us fructify our plans going forward.

ET Now: Earlier you had been saying that you are open to the idea of a strategic sale as well and getting in a strategic investor to raise capital for your company. What is your view right now? Do you maintain that position?

Sudhir Agarwal: We are open to foreign investors having a dialogue with us. We will examine proposals based on the exact norms that government comes out with, so we will see as we come to the bridge, we will cross the bridge when we reach it.

ET Now: How much of a capital do you think you would require to completely digitise your analogue cable business?

Sudhir Agarwal: If you ask me as an industry, the investment required would be quite substantial. In the next three years, my guess is the investment could range up to US$3 billion and that’s a huge amount. So across platforms in this industry for digitisation, the requirement would be anywhere between $2.5-3 billion.

Source: The Economic Times

MUMBAI: Wire and Wireless (India) Ltd is targeting a revenue of Rs 3.4 billion and expects to be Ebitda positive for the full-fiscal, a source close to the company said.

Fuelling this over 20 growth will be the MSO’s entry into new markets, a projected rise in carriage revenue and growth in subscription income.

WWIL is setting up a joint venture company, Siti Vision, with a group of people who have strong ground control to revive its presence in Hyderabad. “WWIL will hold 51 per cent stake. The content has been tied up with the broadcasters and the cable TV service will launch in September. The JV will also expand operations into other parts of Andhra Pradesh,” the source said.

The company has also firmed up plans to invest Rs 200 million towards acquisition this fiscal and is conducting due diligence on five cable networks. “The investment on acquisition could climb if good opportunities throw up,” the source added.

Carriage income is expected to make up 57 per cent of WWIL’s total revenue in FY’11. The MSO has a presence in 54 cities across the country and is eyeing acquisitions in the Tam markets (which influence TV ratings and fetch high carriage fees).

WWIL has eight digital head-ends and is planning to add more during the fiscal. It has stopped its Headend-In-The-Sky (HITS) operations after taking a loss of Rs 1 billion. Zee Group chairman Subhash Chandra told shareholders at the AGM that launching HITS was a mistake as the regulatory system was not in place and “it was a launch ahead of its time.”

WWIL has reduced its debt from around Rs 3.50 billion in FY’10 to Rs 3 billion.

For the three months ended June, WWIL posted an operating consolidated revenue of Rs 692.46 million, up from Rs 630.06 million in the year-ago period, and turned Ebitda positive with the operating profit standing at Rs 74 million from a Rs 10 million loss in the first quarter of FY’10.

Source: Indiantelevision.com

MUMBAI/NEW DELHI: On 31 March, Wire and Wireless (India) Ltd. ended its only Headend-In-The-Sky (HITS) service in the country after making no impact on the market, sinking in losses of over Rs 1 billion.

Four months later, the scenario is no different and the technology that would have put digitisation on the fast track stands unused. Several multi-system operators (MSOs) have applied for a HITS licence but are not particularly enthused as they await a more comprehensive policy.

“We want the government to allow the DTH signals to be used for HITS. This would save the sector from duplication of transponder use. There are other issues on content and tariff that need to be addressed,” says WWIL CEO Sudhir Agarwal.

Allowing the download of DTH signals for HITS would mean that WWIL need not have a separate teleport and uplinking facility as the MSO can use the existing infrastructure of its sibling company Dish TV India, India’s leading direct-to-home (DTH) operator.

Digicable Network (India), which is being snapped up by Reliance Communications, is ready to jump into HITS if transponders are made available. “There are no transponders. We have filed with ISRO. If we manage to get transponders, we will get into the HITS bandwagon,” says Digicable MD and CEO Jagjit Singh Kohli.

RComm runs a DTH service under the Big TV brand. The company has agreed to buy Digicable in an all-stock deal and in the new entity it would house its DTH, IPTV and broadband business as well.

“We need more clarity on the transponder issue, content policy and tariff order,” says the head of a leading MSO who did not want his name to be revealed.

The Telecom Regulatory Authority of India (Trai) has come out with a tariff policy for digital addressable systems, but MSOs want a differentiated pricing system for HITS.

The government has also indicated that the HITS scheme has not made any headway because Trai has not so far submitted its recommendations on policy issues.

While conceding that no operator is providing HITS services in the country, the Information and Broadcasting Ministry sources told indiantelevision.com that Trai had on 18 March been asked to examine policy issues following representations from MSOs.

Trai had submitted a report on 21 July but this covered only tariff regulations. This followed a request on 10 December last year to Trai to revisit the interconnection regulations, tariff orders and quality of service regulations in the light of the HITS policy announced by the government.

Dish TV India, which holds a HITS licence, had, in a representation on 3 March this year, raised the issue of absence of any tariff regime due to which broadcasters and content providers had either refused to provide content or were asking exorbitant amounts.

The downlinking guidelines had been last amended in December following the Government’s approval of the modification of policy guidelines for downlinking of television channels to enable broadcasters to provide their content to HITS service providers.

The clause 5.6 of the downlinking guidelines now provides “the applicant company shall provide Satellite TV Channel Signal reception decoders only to MSOs/Cable Operators registered under the Cable Television Networks (Regulation) Act 1995 or to a DTH operator registered under the DTH guidelines issued by Government of India or to an Internet Protocol Television (IPTV) Service Provider duly permitted under their existing Telecom License or authorized by Department of Telecommunications or to a HITS operator duly permitted under the policy guidelines for HITS operators issued by Ministry of Information & Broadcasting, Government of India to provide such service.”

Source: Indiantelevision.com

The Rs 21,000-crore cable and satellite sector is likely to improve profitability on the back of higher subscriber base, lower costs and improving average revenue per user.

The consolidation activity and the Telecom Regulatory Authority of India’s (Trai’s) recently-proposed norms on foreign direct investment in the cable and satellite sector could hasten corporatisation and make operations of service providers more profitable.

The sector, which is currently dominated by the over 50,000 local cable operators, suffers revenue leakage due to under-reporting of subscriber numbers by operators.

The organised sector, comprising multi-system operators (MSOs) and direct-to-home (DTH) players, is sitting on huge losses due to this leakage and high customer acquisition costs.

However, analysts say the recent acquisition by Reliance Communications (RCom) of India’s third-largest national MSO, Digicable, fund-raising by MSOs Hathway and DEN Networks, as well as the proposed norms will bring the much-need capital.

This will not only help national MSOs consolidate but also compete against DTH players, which are spending heavily to acquire new customers. In a short period, DTH players have notched up 20 million subscribers in a market of 110 million cable and satellite connections.

Faster growth for the organised segment
What is attracting players such as RCom and will be of interest to other foreign cable operators is growth of the organised sector. IDFC Securities estimates that while the overall sector will grow 14.5 per cent annually between 2009 and 2015 to Rs 48,000 crore, the share of organised players will grow from Rs 4,100 crore now to Rs 24,000 crore by 2015. If VAS (value-added services) revenues are included, the share will jump by 6.5 times to Rs 34,000 crore, it says. This means the share of organised players, which is currently less than 20 per cent, will grow to about 70 per cent. A large part of this is likely to come from the rise in the number of declared subscribers as well as DTH subscribers.

From 11 per cent now, the number of DTH homes is likely to move up by a factor of three, contributing over a third of total subscribers over the next six years. Going ahead, the six players in the DTH space and large national MSOs are likely to focus on profitability once their subscriber acquisitions stabilise and consolidation reduces competition.

Not yet there
Most players are making losses due to revenue leakage and high subscriber acquisition costs. DTH operators are among the heaviest advertisers as they compete against cable operators as well as other DTH players to attract subscribers by giving heavy subisidies. The six DTH players are estimated to be sitting on losses of Rs 7,000 crore and have so far spent Rs 15,000 crore on setting up operations.

However, as the subscriber base increases and higher average revenue per user (ARPU) from VAS services kicks in, they could see profits at the operating level in the next two years. Dish TV, the only listed player, for example, is already making profits at the operating level with a subscriber base of nearly six million. Similarly, among MSOs, DEN networks, with 10 million subscribers, is making profits at the net level. In addition to the higher base, VAS revenues from broadband, advertising, gaming, movie-on-demand and recording services are likely to improve ARPUs from under $3.8 to $6.3 over the next five years, adding to profits.

Den Networks
The country’s second-largest MSO has used the inorganic route to expand its network to 77 cities in just two years. It would use the Rs 360 crore it raised from an initial public offer some time ago to add 3.1 million digital connections to its existing base of 10 million, with a significant portion going towards digitisation. Given its execution capabilities, aggressive expansion and improved declaration of subscriber numbers by cable operators, its revenues are expected to grow 43 per cent annually to Rs 1,320 crore by FY13, believes IDFC Securities. Its syndication business under a joint venture with Star TV should add about Rs 600 crore to the kitty. The stock is expected to give over 40 per cent returns over the next one year.

Dish TV
While the company has raised about Rs 1,500 crore that it will use to scale up its six-million subscriber base to about eight million by 2013, it is likely to make profits at the net level only in the last quarter of FY2012. Though expenditure is coming down due to fixed content costs and higher subscriber base, subsidies, at Rs 2,500 per customer, are delaying profits in the most competitive DTH environment in the world. The well-funded balance sheet, expanded subscriber base and lower content as well interest costs are likely to help the company record a profit of Rs 136 crore for FY12. Expect over 35 per cent returns over the next one-and-a-half years from these levels.

Hathway Cable
The company is India’s largest MSO with a 30 per cent market share of the digital subscriber base. The Rs 480-crore initial public offer equity infusion should help the company aggressively expand its customer base and reach revenues of Rs 1,700 crore by FY13. Coupled with strong growth from the high-margin broadband business, Hathway’s operating profit is likely to grow five times to Rs 630 crore, with net profit reaching Rs 210 crore by FY13. Given its reach, the company is likely to be the biggest beneficiary of the move towards digitisation. At the current price, the stock is expected to give 40 per cent returns over a one-year period.

Wire and Wireless
This Zee group company wound up its head-end in the sky (HITS) operations and suffered revenue loss as its experiment with new technology failed to take off due to high content costs. Elara Securities expects the company to report higher profitability as its analog cable operations are positive at the operating profit level. The stock has corrected considerably due to the failed experiment with HITS and offers an opportunity as the company now focuses on expanding its digital cable business. Elara Securities has a set target of Rs 24, while the stock currently trades at Rs 14.

Source: Business Standard

NEW DELHI: The government has only received three applicants from multi-system operators (MSOs) to operate under the Headend-In-The-Sky (HITS) scheme and is examining the possibility of bringing direct-to-home (DTH) players under it.

“We are studying the possibility of whether DTH operators could be placed under the HITS scheme,” said Information and Broadcasting Minister Ambika Soni.

The government announced its HITS policy which was notified by amendment of the Downlinking Guidelines late last year.

Soni also indicated that the process for FM radio Phase III is to begin shortly and may include introduction of news accessed from All India Radio.

The Minister also indicated in an informal meet that the channels may be permitted to have sports, films or other news bulletins.

She said the Ministry’s note on this was already pending with the Cabinet for the last two and a half months.

Answering questions on other issues, she said it had been decided to hold meetings of Ministry officials with local stakeholders in different regions, beginning with the meeting in Guwahati on 13 July. The north zone meeting would also be held before the end of July.

She said though the report of the Telecom Regulatory Authority of India on permitting new television channels was expected by the end of this month, the Government had already cleared nine channels since April subject to the financial viability of the applicant and his/her expertise in broadcasting.

While declining to name the channels, Ministry sources told indiantelevision.com that these were from the list of existing applications and no new applications had been accepted..

Meanwhile, Soni said a sum of Rs three billion had been set aside to revamp DD Kashmir by the end of September. She said capacity building training classes will also be held in Jammu and Kashmir to find local talent.

She also said that the Press and Registration of Publications Act 1857 and the Cinematograph Act 1952 were being looked at de novo. While the PRB was being strengthened to prevent violation of copyright, both the laws were also being revamped in view of changed circumstances since they were promulgated.

Source: Indiantelevision.com

MUMBAI: Wire and Wireless (India) Ltd. has suffered a loss of around Rs 1 billion from its Headend-In-The-Sky (HITS) operations and has suspended the service from 1 April as the government is yet to come out with tariff and content guidelines for the new delivery technology.

WWIL, the first and the only cable TV operator to have launched the service, has invested over Rs 1.5 billion towards HITS.

“We will revive HITS after the guidelines are in place and it is favourable for the industry. We would be losing about Rs 650 million in FY’10 from the HITS operations. Our total loss on HITS would be Rs 1 billion,” a source said.

WWIL, hoping to get a nationwide footprint through HITS, had purchased 600000 set-top boxes but could manage to deploy around 110000 of them.

The multi-system operator, controlled by the Essel Group, expects losses for the fiscal ended 31 March 2010 to be around Rs 250 million, a lower amount than the losses from HITS, as analogue cable has turned profitable for it.

Revenue could close under Rs 3 billion, primarly led by carriage fee paid by broadcasters. “The carriage fee will account for 50-55 per cent of our total revenues in FY’10,” the source said.

WWIL has already received Rs 2.2 billion from its proposed Rs 4.5 billion rights issue.

The focus this year will be to expand the analogue business.”We plan to revive in Hyderabad and expand in Bhubaneswar and West Bengal. We will revive our acquisitions drive,” the source said.

Source: Indiantelevision.com

NEW DELHI: The Telecom Regulatory Authority of India (Trai) has asked stakeholders to give their opinion on whether the tariff model for Headend-In-The-Sky (HITS) should be based on the DTH, conditional access system (Cas), or non-Cas system.

In a consultation paper on “Interconnection and Tariff issues related to HITS services” consequent to the guidelines for providing HITS broadcasting service in India issued by the Government on 26 November 2009, Trai has also sought to know how the tariff model will be regulated and the views of the stakeholders on carriage and placement fee.

The consultation paper follows the Information and Broadcasting Ministry’s reference to Trai on 10 December last to revisit the Interconnection Regulations and issue tariff orders for promotion of HITS services.

The Authority has invited all stakeholders to respond to the issues raised in the consultation paper by 26 April.

Among other things, Trai also wants to know the revenue shares of broadcaster, HITS operator, and cable operator, the retail tariff for subscribers for pay channels, and whether there should be any minimum tariff for the subscribers.

Suggestions have also been sought on any other model to regulate the tariff for HITS service, and whether the quantum of carriage and placement fee should be linked to some parameters. Stakeholders have also been asked to give their views on putting a cap on the quantum of carriage and placement fee and how this will be fixed.

Stakeholders have been asked to suggest any further amendments to implement HITS policy.

Source: Indiantelevision.com

New Delhi,Apr 6 (PTI) In the wake of Government approving the Headends in the Sky (HITS) policy guidelines, the Telecom Regulatory Authority of India (TRAI) today released a consultation paper seeking views of stakeholders on tariff dispensation issues related to it.

The Union Cabinet had cleared the HITS policy guidelines in November last year, giving an option to cable operators to digitally distribute television channels in various parts of the country.

Soon after the HITS-related guidelines were cleared by the cabinet, the Ministry of Information and Broadcasting had requested TRAI to give its views on the interconnection regulations and issue tariff orders for promotion of HITS services.

The consultation paper titled “Interconnection and tariff issues related to HITS services” intends to seek views of stakeholders on issues relating to amendments to the interconnection regulations and tariff dispensation.

Source: PTI News

MUMBAI: Wire and Wireless (India) Limited (WWIL) has mopped up Rs 2.12 billion from the first tranche of its Rs 4.5 billion rights issue.

The remaining amount will pour in by March-end as the Subhash Chandra-promoted cable TV distribution company plans to go aggressive on its Headend-In-The-Sky (HITS) operations.

“WWIL has utilised the entire Rs 2.12 billion. The company has repaid Rs 1.6 billion towards unsecured loans. Investment has also been made for HITS and some acquisitions,” WWIL CEO Sudhir Agarwal tells Indiantelevision.com.

WWIL has invested Rs 1.5 billion for HITS and is the lone operator in this segment so far.

The company has widened its third-quarter consolidated net loss to Rs 344.58 million as revenue dropped 12 per cent. WWIL also took a knock of around Rs 140 million losses from HITS.

WWIL had posted a loss of Rs 226.74 million in the year-ago period. “We are expanding the market through HITS. In the same period of last fiscal, we hadn’t started these operations,” says Agarwal.

Operating revenues fell 12 per cent to Rs 722.2 million for the quarter ended 31 December 2009, compared to Rs 817.9 million in the prior year.

“The television distribution market in India is fast changing, with visible signs of progression towards a digital environment. The HITS policy announcement this quarter is a positive indication and I am confident that digital cable will also start playing an important role in the digitization of television,” says WWIL chairman Subhash Chandra.

Expenses in the quarter dipped marginally by 2 per cent at Rs 793.6 million, compared to Rs 810.3 million in the year-ago period. WWIL has streamlined staff and content costs over the quarters.

Operating loss for the quarter was Rs 71.3 million, as against an operating profit of Rs 7.7 million in the prior year.

The operating profit for analogue business in Q3 was Rs 61 million compared to an operating profit of Rs 8 million.

Says Agarwal, “The initial rollout of HITS has focused on tapping critical tier-II and tier-III cities and we are scaling up at decent pace. I am confident that going forward, HITS shall be a win-win proposition for WWIL, its consumers and stakeholders.”

WWIL promoters pledged 32.2 million shares, or 11.2 per cent of their stake, amounting to 7.1 per cent equity of the company.

Shares of WWIL closed Friday at Rs 19.15 on the BSE, down 2.54 per cent from its previous close.

Source: Indiantelevision.com

Going into 2010, television in India is set for a new age of digitisation. With the Union Government approving Headend-In-The-Sky (HITS), the Indian television viewer will soon get a cheaper option to watch digital television. Wire and Wireless India Ltd (WWIL), the country’s first HITS operator, believes this is the next big revolution in Indian television. Sudhir Agarwal, Chief Executive Officer, WWIL, speaks to BrandLine about the advantages of HITS and what it means for customers.

What is Headend-In-The-Sky (HITS) and how will it be implemented?

When terrestrial broadcasting started it was all very unorganised. Local cable operators would scan the skies for channels and beam it to the various localities. This was followed by large multisystem operators such as our predecessor called Siti Cable. This was one business model and the other business model started six years ago with DTH. The concept of DTH is that the signals are congregated at one place, they are beamed to a satellite and downloaded directly at the customer’s house through a dish antenna and a set-top box where decryption happens. HITS is something which is in between both of them. It’s quasi-cable business and quasi-DTH. All the signals are congregated in one place, they are encrypted and beamed to a satellite and they are downloaded at a central place and further distributed through cable.

What is the advantage of HITS? Why should a customer opt for it?

There are huge advantages for this technology. First, HITS is digital in nature so you upgrade the existing customer from analog to digital TV. Second, it is very fast to roll out. The signal is terrestrial in nature (as the signal is distributed through the cable) so you get signals across the country. All you need to do is get a receiving unit, download the signal and put it into the existing cable footprint.

What are the cost advantages of HITS over DTH?

HITS is an extremely capital-friendly technology. If digitisation of a given area costs Rs 2-3 crore via DTH, the same area can be digitised using HITS for Rs 3 lakh. There are a large number of areas in the country which are unviable to digitise because of the large investments required. But with HITS, even the remote areas would be covered at a viable cost. The reason for the cost advantage is you do not need to put separate digital headends everywhere. There is one single facility, the headend is on the satellite which beams and encrypts signals. All that is required after that is downloading the signals and distributing it. The Government is very keen to digitise the country to bring in more transparency in the country and provide better customer service. Being terrestrial, HITS is also going to be weather-proof unlike DTH where the signal goes missing when it rains.

Will HITS mean a return to the cable operator era when customers were held hostage to the local cable operators?

I don’t think so. The backend is controlled by the company directly. We have a system called SMS (subscriber management system) and every customer is logged onto that. The customers are directly connected to the local partners and WWIL for any service-related issues. There are also many other verticals of businesses. HITS need not necessarily be rolled out via cable operators. We could have direct points in townships and housing societies. We have had tremendous successes from the townships where we have already rolled out our direct point services.

How many cities is WWIL present in and what is the subscriber base currently?

We are present in 130 cities, present in a lot of industrial townships and we are constantly moving up. We currently offer 180 to 200 channels. At present we have 10 million customers overall. Customer care centres are in major cities such as Bangalore, Mumbai, Kolkata and Delhi. We plan to consolidate the customer care base in one place and harness the advantages. Our endeavour is to address the concerns of people regarding customer care.

How many channels can a HITS operator show?

Customers want a lot of channels and a lot of local channels and we can provide that with HITS. Once channels are downloaded a lot of local channels can be inserted. Besides this, we have two satellites with us, Asiasat and NSS. Transponder space won’t be an issue right now. If we want to add more channels we can route it locally.

Source: The Hindu Business Line