Hathway aims for star turn in cable TV marketplace

(Posted on 12 December 16:45 pm)

India's rather chaotic cable TV marketplace has entered a critical phase in its development with the main players bidding to carve up as much territory as they can. Hathway Cable & Datacom, one of the four really big operators in a field including InCable, Siticable, and RPG Netcom, appears at present to be making all the right moves.

The multi systems operator (MSO) has 2.5 million subscribers in seven cities where it is represented. The main partner, the Rajan Raheja group, owns 74 per cent of the company through several other firms. The remaining 26 per cent are held by Star TV Asia, which earlier in the year bought into the company at a cost estimated to be anything between $40 and $55 million.

It was just last year that Star TV split with Zee Telefilms, offloading its partnership stake in MSO Siticable for four per cent of ZTL equity and $146.5 million.

Star saw Hathway as an ideal vehicle to take on Zee's Siticable and ensure a significant presence in cable TV, access, broadband and interactive television. Hathway Cable controls more than 50 headends in seven cities, Mumbai, Pune, Ahmedabad, Hyderabad, Bangalore, Delhi, Chennai and Nashik. Led by K. Jayaraman, the CEO, and Hathway plans to pump in at least Rs5,000 million over the next two years using the capital provided by Star's buy-in. It is already making an aggressive push in Andhra Pradesh, Ahmedabad, Delhi and Bangalore. In Andhra Pradesh Hathway is confident of striking a deal soon with one of the largest Siticable distributors in the port city of Vishakapatnam.

In Chennai, it has reached an agreement with the MSO Sumangali Cable Vision (SCV), owned by the politically influential Sun TV group. Under the agreement, it will take a feed from SCV's headends, using its own headends only as a backup. It will also air its shows on SCV's cable channel. The areas where the two will operate have also been mapped out as part of the alliance.

Hathway has set itself a goal of expanding its subscriber base to reach into 15 cities nationally over the next two years. It hopes to have 4 million subscribers by the end of this period.

The mantra at Hathway at the moment is broadband convergence. It has taken the first step towards that by offering Internet access via cable in Mumbai, Pune, and Chennai. Over 1,000 cable modems have been installed till date. Of these, the largest penetration has been in Mumbai with over 500 connections. The goal is to spread this across targeted cities and take that number up to 250,000 to 300,000 over the next three years.

The next stage is the rollout of digital set top boxes by Q2 2001. It will be the first major deployment of digital set tops in the country though trials have been conducted with analog boxes in the past by a few independent MSOs in Mumbai and elsewhere. Jayaraman believes that Star TV will have a lot to contribute in this area.

If all goes as per plan, Hathway could very well lead the way in cable TV broadband convergence.

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