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Race for phase II digitisation hots up

Gaurav Laghate/Mumbai 15 Nov 12 | 12:43 AM

Digitisation is a reality now, which all stakeholders, including the local cable operators (LCOs), have accepted. With the Information and Broadcasting Ministry being firm on the deadlines of the phase-wise mandatory switchover of analogue signals to the digital addressable system (DAS) of television signals, the race has just began.

Consider this: There are 38 cities from 15 states, with a population of over 1 million, falling under the second phase. These include cities like Bangalore, Hyderabad, Pune, Faridabad, Navi Mumbai and Chandigarh, where seeding of set-top-boxes (STBs) has already began.

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Among these cities, Hathway Cable and Datacom has the dominant position as it is already present in 25 cities, of which it is number one in 11 cities. Den Networks is present in 19 cities, Subhash Chandra-owned Citi Cable (Wire and Wireless India Ltd) is in 18 cities, while IndusInd Media and Communications’ (IMCL) InCable is present in 16 coverage areas.

Hathway, for instance, will invest close to Rs 500 crore during the second phase. Now that the first phase is over, the company will be looking to raise funds. And with the permission to foreign companies to own up to 74 per cent stake (from the earlier 49 per cent cap), multi-service operators (MSOs) and direct-to-home (DTH) players are hopeful that it will bring in fresh capital to trigger growth in the broadcast-carriage services sector.

Den and IMCL are looking at an investment of close to Rs 300 crore in the second phase. “We are expecting seed 3.5-4 million STBs in the second phase. Our investment will be in the tune of Rs 300-350 crore," M G Azhar, chief operating officer of Den Networks, told Business Standard.

A senior executive at IMCL said its investment would also be in the range of Rs 300 crore. “We are looking at a more realistic 2.5 – 3 million STBs. The investment needed will be around Rs 300 crore and we will be open for new equity funding," the executive said. IMCL had made earlier investments from the internal accruals and promoters money.

Asked if MSOs will be able to gain the incremental share, Azhar said: “Right now, the energies are focussed on converting the existing analogue base to digital cable. In later stages, we might see some conversion from DTH to digital cable as consumers will see how digital cable is better."

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