When it comes to entertainment services and the delivery of the same, there is lot of confusion in the minds of consumers as well as investors.
Lets get to the consumers confusion first and then investors next.
Consumers have plethora of service providers when it comes to cable, broadband and VOIP (data) services.
Also there are many value added services like Video on Demand and interactive services like gaming etc provided by these service providers.
THe consumers have seen Cable providers like SitiCable, Incablenet etc and now they started to seeing DTH providers. Telcos are now nervous lot to protect their revenues from their voice services like land lines etc. They are now coming up with IPTV technology. Reliance, bharathi etc are among the leading entrants in IPTV services.
Consumers:
Only cable providers have proven to provide reliable service in comparison to other type of services until now in the West and i believe this is true everywhere.
DTH is still on its way to take off and have many technology hurdles to pass. DTH in India is not feasible due to the construction types of old multi storey buildings.
Also, there is shortage of KU band thus restricting thier growth and also their profitability by many new entrants in this space.
IPTV still has long way to go. They have to invest a lot in the infrastructure and i believe this technology cannot be usefull to people with old TV sets. IPTV needs lots of bandwidth and that is difficult in India atleast for now.
Stay with Cable for now until other technology evolves.
Investors:
All these services have their shortcomings when it comes to technology and implementing the same to provide un-disrupted service to consumers.
Cable providers like Siticable (wwil) have the problem of converting thier analog cable to digital in order to reap more profits and provide value added services like more channels, broadband, voip services. They also want to connect directly to the customers by-passing local cable operators (last mile operators), who are largely under reporting their subscribers thus cutting into the profits of MSOs like WWIL (Wire and Wireless). One of the impediments in increasing their subscriber base is 49% FDI cap which has to go up to 74%. 49% FDI cap is largely restricting these service providers in raising cash to invest. Also, TRAI has to mandate CAS implementation in all major cities which is still pending. Only handfull of cities have CAS for now.
Short term triggers: TRAI raises FDI limit to 74%. TDSAT, TRAI rules in favor of cable providers in sharing FTA channel fee of RS 77.
DTH: Too many players and profitability of any player is too far from now. Stay away for now.
IPTV: This story is still playing and may not be able to provide the value added services like Cable providers due to infrastructure shortcomings. Huge investments are also needed for this play.
I am buying WWIL and a long term investor.
Filed under: Finance India, India blogs, Indian Bloggers , 74% FDI cap, CAS, digital cable, DTH, incablenet, IPTV, TRAI, wire & wireless, wwil
