Indian bloggers mania: sridhar kondoji

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Reliance Big TV may not hit their target subscribers

Success in Mobile market needn’t translate success in DTH segment. Its not that simple nor they can assume that success is given. Look at google, being the world leader in search engine and given the fact that people spend lot of time on their google.com page, they could’t beat hotmail/yahoo in email market, couldn’t beat ebay in auctions/paypal market, couldn’t beat myspace/facebook in social networking areana.

Likewise, Reliance will also not be able to repeat the success story in DTH.
First of all, Reliance Big TV doesn’t offer anything special on the platter for existing DTH customers on DishTV/Tata Sky to switch over. Secondly, Reliance Big TV will not be able to move analog/digital cable customers onto DTH as costs wise DTH platform cannot beat them. Thirdly, Reliance Big TV is so over confident that they didn’t hire a brand ambassador like Shah Rukh or Aamir Khan.

With Videocon and Bharti on their way to DTH, Reliance Big TV is all set for a rude shock in amassing the required number of subscribers to achieve their break even target. With the above things in context, if Indian Government approves HITS platform clearly WWIL former siticable will walk away with customers sitting on the fence still deciding between analog and DTH technology.

Reliance, Bharti or Videocon has to acquire or partner with existing players to reach their own targets and also make this segment profitable.
I see, Sun’s DTH and Zee groups Dish TV, WWIL as clear acquisition targets for Reliance, Bharti companies.

The more they wait the ugly the competition will become and driving their acquisition costs.
Entire Zee group can be up for grabs by Bharti as this aquisition can pit against Reliance in Telecommunications space, entertainment space as well as cable segment.

At the very least, Reliance can go after entire Zee group or just cable business.
This is just my speculation and am watching this space with extreme caution and curiosity.
Let us see the what happens.

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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.

Filed under: Finance India, India blogs, Indian Bloggers, , , , , , , , ,

Slow digitisation process to affect broadcasters

If your background is electronics, you already know that analog cables bandwidth is limited and they can carry only so many channels.
So far that was not an issue at all, but with recent flood of news channels and several varieties of entertainment channels the analog cable which is still predominant has maxed out. Not knowing this or should i say ignoring this fact, new entrants are coming into broadcasting business and loosing money competing for the limited channel bandwidth.

CAS is not manadatory except in 4 metros and there are almost 75 million cable homes running on analog cable.

Who will be the winner in this slow digitisation pace from investment point of view?
Broadcasters or MSOs or Last Mile cable operators (aka LCO)?
So far LCOs under reported their subscribers to MSOs so that they pay less to MSOs and mint money for themselves causing losses to MSOs. This was possible because analog cable doesn’t give MSOs an advantage to accurately measure the subscriber numbers.
In turn MSOs get less carriage fee for channels and broadcasters get less pay channel fee.

However with intense competition for limited bandwidth broadcasters are bidding high for their channels and MSOs are seeing their green days. Now LCOs will be the loosers if they continue to under report, so to get their proper share they have to good job of reporting the subscriber strength and take a share of that carriage fee. This will also result in MSOs getting more money from LCOs resulting in broadcasters getting their fair share of pay channel fees.

Under this new emerging scenario MSOs like WWIL are true winners. If the present slow pace of digitisation contunue, they make more money in carriage fee or if the CAS becomes compulsory, MSOs will still continue to make more money from their value added services and subscription fees from LCOs.

Government should act fast or else the carriage fee will hit the bottomlines of broadcasters forcing them to cut costs and thus sacrifice quality.
In a year or two, this present situation can easily get out of hand.
I&B along with TRAI should hike FDI limit to 74% to help cable companies to invest in infrastructure for faster digitisation program.

Filed under: Finance India, India blogs, Indian Bloggers, , , , , , , , ,

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, , , , , , , , ,

Cable service players FDI cap may soon be revised

In order to give level playing field for cable operators on par with telecom players, TRAI is all set to succumb to the longing demand from cable service providers for raising the FDI cap to 74% from current 49% limit.
WWIL formet siticable and a subsidiary of Zee, will be direct beneficiary of this recommendation and subsequent approval from I&B ministry.
WWIL being largest MSO with 6-7 million subscribers may attract private equity investors or foreign investors like Comcast.
WWIL is on its path to increase its subscriber base by offering several value added services.
Please read further on FDI cap related latest news at http://www.thehindubusinessline.com/2008/02/10/stories/2008021051340300.htm

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