Indian bloggers mania: sridhar kondoji

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WWIL, DISH TV could be acquisition targets

DTH space has just become on of the hottest grounds with the launch of BIG TV by RCOM.
Dish TV, Tata Sky were the only players in this field with combined 6-8 million subscriber base.  Big TV’s entry has raised the bar and the talk is increasing the space to about 30-40 million subscribers in 3-5 years.  How that is going to happen is yet to be seen. Bharti and videocone are also raring to enter this space and are making plans to laucnh their services soon. Dish TV and Tata sky are also ramping up their infrastructure and raising funds to acquire subscribers on a rapid pace.

However cable tv viewers are reluctant to pay mre than couple of hundred bucks for their entertainment and i don’t see a strong reason for them to switch from cable wallah to antenna wallah.
Unless there is a massive migration of cable tv viewers from analog medium to DTH platform,  i don’ see how RCom, Bharti and videocone are going to meet their numbers.

Apart from aggressive pricing, DTH space could be shrunk to just few players by acquisitions.
Tata Sky would try hard to remain under the fold of Tata. This leaves Wire and Wireless (WWIL) and Dish TV as attractive acquisition targets by Reliance, Bharti and videocone to meet their aggressive subscriber numbers.

No amount of goodies from DTH players can force cable tv viewers to digital platform.  DTH players cannot afford to drop their subscription charges to as low as RS 50 in few cities to as high as RS 150.

I don’t see how DTH players can become profitable without huge subscriber base and pricing as competitive as cable wallahs.
It will be interesting to watch this space.

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WWIL a former SitiCable and part of Zee group

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, , , , , , , , ,

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