New Delhi: Not satisfied with the ‘must carry’ diktat and regulation of carriage fee outlined in the latest regulations by the broadcast regulator, both multi-service operators (MSOs) and news broadcasters may soon take legal recourse. MSOs and broadcasters are studying the order before approaching the courts, sources said.

On Monday night, the Telecom Regulatory Authority of India (Trai) issued the tariff order and regulations for digital addressable system (DAS) roll out mandating every MSO to upgrade its delivery platform so as to carry 500 channels in DAS areas, starting with the four metros. DAS entails mandatory use of a digitally addressable set-top-box for accessing TV channels and encryption of all television signals in DAS notified areas.

“The tariff order applies equally to DTH service providers and MSOs. No such ‘must carry’ mandate is imposed on DTH operators. The Trai orders directly attacks every MSOs right to do business. This should be challenged in court,” said a top executive in MSO Alliance, the apex body of leading MSOs.

News Broadcasters Association, the apex body of leading news channels too as expressed its displeasure accusing the sector regulator of legalising the menace of carriage fees when DAS in itself is supposed to eliminate it.

Both Trai and the ministry of information and broadcasting have supported the move. Trai chairman J S Sarma ruled out any roll back of the DAS order. Sarma told a news channel that Trai does not issue regulations and tariff order to roll back or re-look at them the next day. On its part, Uday Kumar Varma, Secretary, I&B ministry told FE that the DAS order was balanced and pro-consumer.

But MSOs are not satisfied. “It costs a lot to upgrade the network and digital head-ends in order to make them ready for carrying 500 channels. While there may be a demand for these many channels in metros and bigger towns, no such demand is there in smaller towns. This directly impacts the fundamental right of doing business,” said the head of regulatory and legal affairs in a leading MSO brand requesting anonymity as the matter was still be discussed internally.

Even the markets welcomed the Trai order as the stocks of MSOs like DEN, Hathway and WWIL went up by 2.12%, 19.23%, and 4.73% respectively. However, the stocks of some broadcasters took a beating. News broadcasters like NDTV -0.84%, Zee News (-2.31%), and TV Today (unchanged), while general entertainment channels like Zee Entertainment closed in the red while Sun TV saw 5% gain.

Source: The Financial Express

MUMBAI: News Corp. has offloaded its entire stake in cable firm Hathway Cable & Datacom, allowing it to focus on its direct-to-home (DTH) and broadcasting businesses in India.

The Rupert Murdoch-led media conglomerate sold its 17.3 per cent stake to private-equity firm Providence and Macquarie Bank for Rs 3.58 billion.

Providence is the buyer and Macquarie Bank has acted on its behalf, it is learnt.

News Corp, the second largest shareholder in Hathway, held the stake through Asian Cable Systems.

“We have exited from Hathway. We were a minority partner. We didn’t feel the need for investing into so many businesses and do not have the management bandwidth. We will continue to have presence in DTH (through Tata Sky) on the distribution side of the business,” Star India CEO Uday Shankar told Indiantelevision.com.

Asian Cable Systems sold its entire holding of 24,715,500 shares through open market transactions for Rs 145 per share, according to filings with the National Stock Exchange.

Around 14.1 million shares were purchased by Providence Equity Advisors Mauritius for Rs 2.05 billion, while remaining 10.5 million shares were acquired by Macquarie Bank for Rs 1.53 billion.

The shares were sold through separate bulk deals at the NSE.

As of 31 December 2011, other promoter entities include Akshay Rajan Raheja (17 per cent), Viren Rajan Raheja (16.74 per cent), Hathway Investments (10.47 per cent) and Spur Cable & Datacom Pvt Ltd (5.36 per cent).

Other major non-promoter shareholders of the company include Infrastructure India Holding Fund, Reliance Capital Trustee Co Ltd, Government Pension Fund Global, UTI Mutual Fund and SBI Mutual Fund.

News Corp. had acquired 26 per cent in Hathway way back in 2000, after it exited from Subhash Chandra-promoted Siticable.

Hathway scrip closed at Rs 179.55 on BSE, up 1.3 per cent.

Source: Indiantelevision.com

With the official deadline for phasing out analog cable TV services fast approaching, digital cable and direct-to-home (DTH) companies are worried because customers are not adequately aware about the mandatory need to switch over to digital services, which will lead to a last minute scramble for settop boxes.

Senior industry executives told Mail Today that although digital customers have been growing, there seems to be lack of awareness about the government’s decision to phase out cable TV networks from Delhi, Mumbai, Kolkata and Chennai by June 31, 2012. Noida and Gurgaon are next in line and compulsory digitisation will be enforced by March 31, 2013.

“There should have been a surge in numbers for the digital services after the government decision in November, 2011, but this has not happened,” a senior executive said.

These companies fear that consumers will probably rush for the change in the last month, when it would become difficult for them to install such a large number of connections in a short time-frame.

The distribution companies had stepped up imports of set-top boxes since they are not manufactured in India but are now seeing the inventory piling up.

The government is keen on the switch over as there is largescale under-invoicing by the local cable operators, who provide the last-mile connection to households and this leads to an erosions in service tax revenues.

According to industry estimates, these neighbourhood cable operators report only 20 per cent of the total subscribers from whom they actually collect money each month.

As a result the government ends up losing around Rs.5,000 crore each year in service tax.

The large digital distributors, such as Hathway, DEN and Digicable, also end up losing big money as they get a revenue share from a meager 18 to 25 per cent of the actual number of subscribers.

According to an industry estimate, the local cable operators retain 80 per cent or Rs.13,600 crore of the entire collection of Rs.17,000 crore collected from viewers as subscription.

The television broadcasters, who invest heavily to provide entertainment and news content, are also getting shortchanged because of this under reporting of subscribers. The digital switch will ensure that the actual number of subscribers get recorded through the set top boxes, which contain cash card with the details of the accounts of the user.

The technology ensures that the broadcasters, distributors and the government get a fix on the actual number of subscribers, plugging the revenue leak. Most advanced countries have phase out analog cable TV. While the US completes the digitisation of its cable sector in 2009, other countries like China are also following suit.

Tata Sky chief marketing officer Vikram Mehra told Mail Today that the company had geared up to provide set-top boxes in the four metros keeping in mind the June 30 deadline. “However, consumer awareness is still low and we plan to launch an advertising campaign to apprise potential customers,” he added.

Mehra said it was important for consumers to choose the right kind of set-top box as this would affect the quality of viewing.

Industry officials are of the view that apart from the number of set-top boxes, the problem of installing the connections had to be tackled.

Installation requires technical expertise and skilled manpower have to be made available in adequate numbers. Thus, any last minute surge in volumes would also make it difficult for company’s engineers to cater to the customers within a deadline.

Mehra said Tata Sky was also putting its billing systems in place to cater to wider customer base as with the entry of set-top boxes consumers would be choosing channels on a la carte basis, which would require different bills for diverse viewers.

A digital platform offers a wider choice of TV channels, better quality of transmission and allows consumers to pay for what they view. For the industry, it will bring in greater consolidation, reduced dependence on viewership ratings and drop in carriage fees.

Source: India Today

In an interview with CNBC-TV18, K Jayaraman, chief executive officer and managing director of Hathway Cable & Datacom Limited spoke about the cable digitization bill and the road ahead for the comapany.

Below is the edited transcript of the interview. Also watch the accompanyig video.

Q: Digitisation deadline has been postponed to June 30, 2012 versus March 31. Do you expect digitization to take place in the top four metros by June 30?

A: Certainly. The ordinance, which was signed by honourable President of India, is pending and will have to be approved by the members of the Lok Sabha and Rajya Sabha.

I hope that it would be approved by the members of Parliament in the current winter session. The Bill was tabled yesterday in Parliament, which got adjourned, but I think in the coming weeks it will be approved.

Q: Has Hathway Cable started implementing the required capex?

A: Yes. On a voluntary basis, Hathway was the pioneer in doing voluntary digitization irrespective of the notification. We have almost covered 35% of Mumbai and about 15-20% of Delhi by way of set top box penetration. Substantial portion of voluntary deployment has already begun.

For the balance requirement, we have inventory of set top boxes. We also have ordered additional 1.3 million set top boxes, with an additional provision for another 0.5 million. Committed set top box order is 1.8 million and another 0.5 million will be triggered depending up on demand-supply situation.

Q: What is the amount you are investing in digitization and how would you procure the funds?

A: Not only set top box, but also there is more capacity addition. We plan to increase the number of channel availability to 400, as cable digital can only give maximum number of channels because we don’t have any bandwidth issues unlike DTH.

We should look at anywhere between Rs 150-175 crore. We should fund it out of the cash that we have and vendor credit.

Q: There will be digitization in the four metros by June 30. What will be the increase in the subscription revenues?

A: One has to also consider that there could be a small migration to DTH. All analog homes of all cable guys would not be captured by digital cable. Realistically, if you put the figure, people would say it is 8 times. But I would think there would be some kind of market share that DTH would also take and so on.

So something around 6 times from current levels would be more realistic figure. So suppose ‘X’ was the subscription figure in analog, it would go to 6X.

Q: When could we expect turnaround in the bottomline once digitization kicks in?

A: We have already posted a positive EBITDA unlike many DTH companies. We have substantially repaid our debts, our interest has come down.

Huge amount of depreciation will affect us. But in short to medium-term, all cable companies would be valued on the basis of EV/EBITDA. As long as you have the digitization programme till 2015-16, we would continue to have higher depreciation which his true for any DTH company, any cable company.

We are EBITDA positive and with 6 times growth in subscriber fees, we would obviously be more EBITDA positive. But depreciation would also be higher. We will post positive PAT; only after the phase of digitization is complete.

Source: Moneycontrol.com

Bangalore: Cable Digitization will soon be the mantra of all cable operators to maintain competence with DTH services provided. It is going to be a bright future for India to have Digitized TV experience by users that shifts the entire scenario to completely new world of viewing.

Digitization is to optimize the quality of videos that people watch and to make the service more flexible. This is one the most promising markets for companies who are involved in the development of technologies that will optimize broadcasting.

However the digitization of cable for India is an extremely important task and a monumental one. According to TRAI, there are over 200 broadcasters and about 600 television channels currently. Among service providers we have a large roster of over 6000 cable multi-system operators (MSOs), with 60,000 local cable operators (LCOs), alongside 7 satellite television operators and many IPTV providers- (apart from the terrestrial services of DD, of course.)

Pay TV services, largely cable and satellite services reach 74 percent or 108 million television households, out of which only 33 million today are digital, mostly attributable to DTH subscribers, according to KPMG’s report on M&E.

One such service provider company that is into cable digitization is Cisco which is a company in networking. The ordinance to digitize analogue cable systems television viewing is to see a drastic change happening soon with the digitization of cable services.

Cisco has several products and solutions that benefit cable service providers like Cisco Cable Digital TV solutions, Cable Video, Cable Separable Security solutions and Cisco Videoscape, a solution that lets consumers combine content from multiple sources, social media, communications, and mobility to create a truly immersive TV experience.

Cisco has also recently announced a Wireless TV Solution, which allows consumers to watch TV in virtually any room in the house, wirelessly. In India, Cisco is working with several leading cable service providers to help them do the transition to a digital platform and enhance consumer experience.

Gujarat Telelinks Private Limited (GTPL) is one such customer that will deploy more than 300,000 next-generation digital set-top boxes from Cisco over the next 12 months in the key states of Gujarat, West Bengal, Maharashtra and Jharkhand.

Cisco helps service providers build flexible, scalable, and secure networks that deliver profitable services for sustainable success. The Cisco IP Next-Generation Network (IP NGN) architecture supports medianet, mobile internet transformation, data center, and cloud computing solutions.

Cisco’s Service Provider partners in India include players like Tata, Reliance, Bharti, VSNL, BSNL, MTNL, SIFY and IDEA Cellular and cable operators such as Hathway and Gujarat Telelink Private Limited (GTPL).

Source: Siliconindia.com

MUMBAI: Hathway Cable & Datacom has posted a standalone net loss of Rs 103.18 million for the second quarter of this fiscal ended 30 September.

The multi-system operator (MSO) had posted a profit of Rs 40.39 million in the same quarter of the previous year.

Hathway’s total income stood at Rs 1.28 billion, a marginal dip over the year-ago period (Rs 1.3 billion).

Total expense, however, rose to Rs 1.07 billion (from Rs 943.96 million in corresponding quarter of the previous fiscal).

The payout to pay channels during the three-month period stood at Rs 345.6 million, compared to Rs 280.33 million in the year-ago quarter.

Hathway’s net loss can be attributed to depreciation/ amortization/ impairment which stood at Rs 252.70 million. The company also lost Rs 10.53 billion due to fluctuation of exchanges.

The MSO reported profit from operations (before other income, interest, depreciation and exceptional items) of Rs 218.28 million for the quarter under review.

Hathway said that as per management estimates, its economic interest in the Ebitda of its several subsidiaries/JVs/associate companies for the quarter under review, would aggregate to approximately Rs 210 million based on the unaudited accounts of such entities.

The MSO disclosed that out of Rs 4.8 billion IPO money, it has utilised Rs 3.91 billion as on 30 September.

Hathway said that in anticipation of the Government’s digitisation mandate, it has modernised its head ends in Mumbai, Delhi, Bangalore and Hyderabad by installing state-of-the-art technologies from Ericsson, UK. This implementation provides the company with enhanced capacities to carry additional channels at higher levels of quality.

Source: Indiantelevision.com

Till now it has been a no-brainer what you need to have for home entertainment. On the one hand, there is the Direct-to-home (DTH) service ensuring sharp picture and voice quality, giving you the power to choose the channels you want and even offering interactive elements such as video-on-demand and gaming. On the other hand, you have the analogue cable television with poor reception and a whole bundle of channels you never want but have to pay for.

Indeed, there is another technology called IPTV where your broadband Internet service provider allows you to access television channels. But then, they never hard-sell and a large section of consumers don’t even know what it is all about.

But all that is about to change. Well, at least a part of it.

With the cable television digitisation ordinance for amending Section 4A of the Cable Network (Regulation) Act getting approved by the President, it will be soon ‘bye bye analogue cable TV.’

As far as the industry is concerned, the digitisation process will make the local cable operators toe the line instead of the current practice of under-declaring the number of subscribers and thus profiting at the broadcasters’ expense. It will also lead (and is already leading) to consolidation in the industry as small-bit cable operators may not have the finance to purchase the equipment required to beam digital cable signals. In other words, it is not only another choice for Indian consumers, but also leads to the cable operators becoming more of an organised business. Already multi-system operators (MSOs) – large cable operators such as DEN Networks and Hathway – have brought many of the smaller operators under their fold, thereby leading to business consolidation. A more organised cable industry means more tax collections for the government too, which currently leaks out as no one can make out what the small cable operator in a distant town is earning.

The digitisation process will be carried out in four phases, starting with the digitisation of four key metros – Mumbai, Delhi, Kolkata and Chennai – by March 2012. The rest of the country will be covered by December 31, 2014. This means in five months from now, you would have some form of set-top box (STB) sitting along with your television for you to access channels as the existing analogue cable networks will be banned starting with the top four metro cities. This would be either an STB linked to the dish antenna of a DTH operator or an STB linked to existing cable wires that comes to your house.

If you already have a DTH service, it may not interest you much. But there are millions who still have the age-old cable network at home and they need to decide soon whether to switch to DTH or upgrade to digital cable. So let us have a close look at both the options.

Direct-to-home (DTH) Wins Hearts?

DTH service provides ensure superior picture quality in the first place and with the introduction of high definition (HD) channels, viewers have a lot to gain from this service. Plus, you have the freedom to select the channels you want to watch and pay only for those. For instance, a typical North Indian may not like to subscribe to watch regional channels from the South (because of the language barrier) and similarly a South Indian may not be keen on subscribing to Hindi language channels.

However, there is more to it, in terms of consumer freedom. As a subscriber, you have complete control over your profile and you can easily exercise the power of your choice. In other words, you can add more channels to your list (for a fee, of course), modify them or even delete them from the list without calling up the operator every time. Additionally, the interactive features provided by DTH operators in the form of video-on-demand, games, quizzes, puzzles, paid shows, etc., are also a big attraction. All these make DTH a formidable opponent of the existing cable TV.

Salil Kapoor, chief operating officer (COO) at Dish TV India Ltd. believes that although the digitisation process will definitely help improve the quality of content offered by MSOs and local cable operators, DTH operators already have a substantial lead over them in that department. Add to the fact that the back end work required on the part of the cable operators for implementing the process is huge and will take a lot of time.

“DTH operators have a large customer base and are well established and positioned in the Indian market. In terms of services, we are already providing high definition (HD) channels to our viewers. We also offer additional services like a Job portal (in tie up with Monster.com) and a financial portal (in tie-up with ICICI bank),” said Kapoor.

Another advantage of DTH is that customers have the convenience of selecting their mode of payments. They have the option of buying a recharge coupon, getting a recharge done from a local dealer or they can simply make online payments. While in the case of cable operators, the payment mode is mostly limited to cash payments made to the operator directly. So in the case of DTH, the power of selecting the mode of payment rests in the hands of the consumers.

But the DTH service is not without its fair share of woes. Consumers often complain that the dish antennas frequently malfunction during the rainy season and consequently, the transmission suffers. Otherwise, too, those antennas cause a lot of headache as they have to be placed outside the houses/flats and that may not be an easy proposition. There are societies in Mumbai that do not allow members to take DTH connections as the antennas spoil the overall look of the buildings. Other metros are more lenient but the quality of transmission remains an issue when the weather is bad.

Then, there is the service issue that plagues all and sundry. Sometimes large DTH companies may take up to a week to fix a complaint you have lodged. Also, once the due date for the monthly renewal passes, DTH operators shut down the service until the payment is made. This means keeping a tab on the billing date and paying on time, every time, if you are not fond of TV blackouts.

There are presently seven DTH operators in the country including Dish TV, TataSky, Airtel Digital, BIG TV, Sun Direct, Videocon D2H and Doordarshan Direct Plus.

A Close Peek At Digital Cable TV

So what changes with digitisation? Unlike the traditional analogue TV, digital cable TV can actually beam similar superior picture quality provided by DTH operators. Moreover, it can also bring home the HD channels (just like DTH). Therefore, even in terms of premium picture quality, they happen to be equals.

Digital cable TV will also bring interactive elements. “We can provide all interactive services that a DTH operator offers. Moreover, you get to see local events like Satsang sessions or exhibitions or even festival coverage including Ganesh Chaturthi and Janmashtami in Mumbai,” said Ravi Singh, vice-president of Cable Operators & Distributors Association of Mumbai. “In addition, local operators can provide up to 1,000 channels if required but as of now, DTH operators are nowhere close to that number.” However, since the availability of channels depends on the amount of bandwidth the operator has, DTH operators can very well match that number.

Singh has also pointed out that local cable operators can provide Internet services and if you have a Smart TV, you can access the Net directly from your television set. But even if you don’t have one, you can still make use of the Net connection for your desktop or laptops. Since local cable operator can provide both (digital cable TV and Internet services), that will save consumers the trouble of getting a separate Internet connection.

According to Rajnish Dixit, general secretary and spokesperson of Bihar Cable Operators Association, digital cable TV definitely has the upper hand. “Local cable operators can also tie up with local retailers and offer additional facilities like shopping-via-television. For example, if a viewer in Patna wants to buy products from a local retail outlet (like Big Bazaar); he/she can view the retailer’s catalogue on TV and order the goods accordingly. The product/s will be delivered at the doorstep and the customer can pay cash on delivery (COD),” explained Dixit.

Also, those opting for DTH service are often plagued by the billing timeframe. Once the due date for monthly renewal passes, the service is automatically discontinued and it does take some and effort to get it back. But when it comes to local cable operators, viewers mostly pay as per their convenience (quite possible if you have a good rapport with your operator). But this practise can also lead to a number of defaulters which in turn affects the revenues of the operators.

As consumers are directly in touch with their cable operators, complaints are quickly dealt with and the problem of time lag is extremely rare. Finally, there is no need to install a dish antenna and your home can still retain the quaint charm, unspoilt by metal sticking out of balconies and rooftops.

Here’s a table comparing the two services:

Our Take

Although the deadline is set for March 2012, many of the local cable operators are already offering digital cable TV (in fact some consumers also have digital cable as the project had once started but failed a little less than a decade ago). A local cable operator in Malad (Mumbai) offers a set-top box (a necessity for digital cable TV) for Rs 1,100 plus a monthly membership charge of Rs 350. A total of 160 channels are available if you opt for the membership.

As of now, you don’t get that much-touted pay-for-only-what-you-want facility in this case, which essentially means viewers must subscribe to a minimum number of channels. But this is likely to change with digitisation and that would bring channel packages to digital cable, just like it is with DTH.

Although both services have their good and bad points, we reckon digital cable TV has the potential to overtake DTH in the long run, but we can only give a verdict once we have tested both the services first hand (after all, it finally boils down to the price and quality of service). Also, let us not forget that the digitisation process will require a lot of backend work (such as importing large quantities of set-top boxes and their distribution) on the part of local cable operators and one would have to wait and see how digital cable operators match up to DTH firms in terms of after-sales services.

Add to that the disheartening fact that the earlier attempts at digitisation (made by the government in 2002 and 2007) had failed, leaving the consumers disappointed. Let us just hope that it will be third time lucky and we will not fail to arrive this time.

Source: techcircle.vccircle.com

New Delhi: Networking major Cisco sees great business opportunities in Indian cable network which is set for digitisation.

The key focus of Cisco’s Service Provider division is to enable service providers (wireless, wire line, cable service providers) to monetise their investments in technology and drive new revenue streams without incurring additional capital expenditure, Cisco Senior VP (Service Provider) India and SAARC Sanjay Rohatgi told reporters here.

Cisco is working with service providers to help them transit to an IP NGN (Next-Generation Network) architecture and offer varied services to consumers across platforms.

“The onset of digitisation would help the cable service provide sector enhance quality of services and increase their subscription revenue by offering plethora of innovative and interactive services,” he said.

Talking about the addressable market in India, Rohatgi said India has 140 million television homes of which 35 million are covered by DTH. The remaining are cable and satellite homes which need to move to digital platform.

The digitisation drive proposed by Indian government, which aims to achieve nation-wide digitisation by December 2014, will help cable operators enable services like HDTV, gaming, digital video recording, video on demand and future ‘connected home’ services to consumers, he added.

Cisco has several products and solutions in the segment like Cisco Cable Digital TV solutions, Cable Video, Cable Separable Security solutions and Cisco Videoscape for the operators. It recently announced a Wireless TV Solution, which allows consumers to watch TV in virtually any room in the house.

In India, it is working with cable service providers like Gujarat Telelinks Private Limited (GTPL) and Hathway.

Source: The Financial Express

NDS has announced that in the rapidly growing Indian pay-TV market its technology is providing an enhanced TV viewing experience in 20 million homes. With an industry estimated average of five people per households, NDS is enabling a compelling, next-generation TV experience for 100 million viewers; a milestone that reinforces the company’s position as the leading supplier of digital pay-TV solutions in India.

Sue Taylor, Senior Vice President and General Manager, NDS Asia Pacific said, “We entered the Indian pay-TV market in 1995 and this latest milestone is a testament to not only our pioneering work with some of the most successful cable TV and satellite platforms in India, but also to the remarkable growth in the India pay-TV market.”

“India is expected to overtake the US in the number of DTH homes within the next year and we’re committed to helping operators introduce next-generation applications that will continue to enhance their subscriber offering. As India’s leading digital cable TV solutions provider, we are dedicated to developing a full suite of affordable, scalable and future-ready solutions for operators who want to digitise their networks to maintain a competitive advantage,” added Taylor.

With offices in Delhi, Mumbai and Bangalore NDS has invested over US$250 million in India; the company currently employs over 1,900 people in India with its largest presence an R&D centre in Bangalore. NDS has established relationships with leading pay-TV operators throughout the country, including Tata Sky and Airtel Digital TV in the DTH sector and DEN, Hathway and the newly announced Darsh Digital and Jak Communications in the cable sector.

Source: BestMediaInfo.com

Mumbai: Television cable service provider Den Networks plans to invest Rs1,000 crore over 3-4 years for rolling out digital cable networks in India, a senior official told Reuters on Monday.

Last week, India approved an ordinance on digitization of cable network, in a move that boosted the prospects for cable television service providers and broadcasters.

India had been working to amend broadcasting rules with a view to fast track complete digitization of cable broadcasting in the country. The ordinance was to mandate complete cable digitization in the top metro cities by 2012 and pan-India by 2014.

Out of its total investment, Den plans to invest Rs400 crore on the first phase of cable digitization.

Cable TV operators like Den who have been facing competition from direct-to-home operators in India are confident of achieving a significant jump in subscriptions in the coming years post digitization.

“We are hoping to add 2.5 million subscribers in the first phase. If all goes well, we plan to finish the first phase by April 2012,” S.N. Sharma, president said in an interview.

The company, which has a total subscriber base of 10.5 million, has been adding 0.7 million subscribers annually on their cable networks.

Den also said it plans to fund the first phase investment via an equal mix of internal accruals and debt.

Rival Hathway Cable had said it will invest Rs500-600 crore on cable digitization by 2014 and is planning to invest Rs700-800 million on the first phase.

Analysts have viewed this ordinance as a positive for direct-to-home (DTH) and cable service providers such as Den, Hathway, Dish TV, Videocon DTH and Bharti Airtel.

Brokerage IDFC expects gains for nationalized multi-system operators (MSO) such as Den and Hathway to be “far sharper.”

“Against a backdrop of extremely poor execution and muted subscriber addition of less than 0.5 million subscribers annually, we now foresee a near 3x jump in digital subscriber addition for these MSOs in the next 12-18 months,” it said.

Consolidation

Den Networks which expects consolidation in the cable industry post the ordinance is open to acquiring or considering the merger of smaller multi system operators with itself.

“Consolidation will happen automatically. And there will most definitely be some consolidation by way of merger, acquisition or by some operators getting locked out in the next 3 years,” Sharma said.

“We have been in the process of consolidation of LCO’s (local cable operators) and are open to and considering MSO consolidation opportunities,” Sharma said.

The company also plans to rollout broadband services in the areas where it completes its first phase of digitization.

“We are doing the trail run and are in the process of making our plans and we will unfold them in the next 3-4 months,” Sharma said.

Shares of the company, which the market values at $241.6 million, have fallen 50% from the start of the year compared to a 17% fall in the main index.

Source: Livemint.com