Cable TV

Cable TV veteran Nagesh Chhabria announces new national MSO; $200 million investment

MUMBAI: The Indian cable TV market is about to witness the emergence of a major multisystem operator: one which is backed by industry veteran Nagesh Chhabria. The former Indusind Media CEO and promoter of Bhima Riddhi Digital Services, runs cable TV networks in several towns in Karnataka, Maharashtra,  and some regions of the Goa and Gujarat border, and has been a powerful force in the cable TV distribution space.


Now Chhabria has signed an agreement with Atlas Consolidated LLC - a joint venture between Greenwich Equity Partners and Jagran Infra-Projects led by Sanjiv Mohan Gupta - to create a national MSO with about $200 million being pumped into it..


The Agreement was signed sometime back and the formalities for formation of the new MSO are in process.  “The name of the MSO and its brand will be announced shortly,” informs Chhabria.


Not disclosing the equity share Chhabria will hold in the JV, he says, “We may in the future, based on the decision of the new members of the board, plan to list the company.”


The new entity plans to have a pan India network with a target base of six million subscribers in the next 18 months. And in order to achieve the target, it will take both: the organic and inorganic route. “When I say organic it will be through a fibre rollout and converting a large analog base into a digitised set up with a fixed revenue share in place,” informs Chhabria.


On the inorganic route, the company may apply two models: one, buy out the last mile, so it has complete control and two, look to have a majority stake in an existing network with a ready base. “We have numerous tie-ups in place which will enable us to reach to our targets in the required timelines,” opines Chhabria.


In late May Chhabria acquired a 50 per cent stake in Mumbai-based Bhawani Rajesh Cable & Digitech Services, with the option to take it up to 74 per cent.


The JV will also grow its business through the acquisition route. “The networks we are acquiring will be announced shortly. Ground level assessments are taking place as we speak,” he adds.


The new entity has chalked out a foolproof plan for its successful launch. “We have a 45 cities rollout plan which will be announced shortly,” says he.   


According to a recent Deloitte report, currently there are 80 million non-TV households and Chhabria will at the appropriate time look at tapping  those households as well. “Eventually most of the non TV households in the future will have screens to consume entertainment and data.”


To start operations, initially 25 digital headends across the length and breadth of the country will be set up. “It's likely that in eight to 12 weeks from now the new company will be in place. There will be a simultaneous rollout in all parts of the country,” he informs.


Greenwich Equity is an emerging markets fund, based in the United States with a focus primarily on infrastructure and media. Jagran has a storied pedigree in the production and entertainment space. Atlas was created as a joint venture between Greenwich Equity and Jagran Infra and is the holding company for all of Greenwich and Jagran’s investments in the cable and media space.


Atlas Consolidated LLC managing director Sanjiv Mohan Gupta says, “We plan to be one of the significant players in the cable TV industry similar to what we did in the other media business.”


Adds Greenwich Equity Group managing director Suhas Kundapoor, "We are excited to be in this space at this time and find that there is tremendous potential in this industry."


What is interesting to note is that the announcement for the JV has come at a time when the general sentiment towards cable TV industry is negative. Chhabria is quick to respond, “Sentiments are like seasons.  Sometimes sunny, sometimes gloomy. But investments are made on fundamentals. The fundamentals of cable TV industry are in place and have tremendous potential that will be unlocked in the coming future.”  


For him, digitisation has thrown open huge opportunities and set top boxes with the right middleware give opportunities for advertisers and content marketers. “Beside subscriptions, we are geared to deploy numerous Video and Non - Video VAS along with Broadband services,” he adds.


Chhabria and his company currently have a subscriber base of one million which will be brought into the new entity initially. “Cable TV industry in India still requires 140 million boxes to completely digitise the universe. We firmly believe there is tremendous potential in aggregating direct subscribers in phase III and phase IV. We are in talks with numerous players in the market to acquire their networks,” feels Chhabria.


 The MSO will not stop at the $200 million investment or at the six million subscriber base. “This is just the beginning. Future plans will be shared at the appropriate juncture,” concludes Chhabria.  


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