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Manthan Broadband to invest big bucks to expand reach

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KOLKATA: The kingpin of the Multi System Operator (MSO) ecosystem in the East, Manthan Broadband Services has drawn an aggressive plan to secure its current position. Aware of the competitive market, this Kolkata-headquartered MSO plans to invest Rs 450 crore by 2014 end to upgrade its cable TV operations and also expand its reach in the eastern region.

The cable operator which planned to install around 36 lakh Set Top Boxes (STBs) in the entire eastern region including Kolkata, rest of Bengal, Orissa, Jharkhand, Meghalaya and Assam by September 2014, has already installed around seven lakh STBs in Kolkata.

While for the subscribers’ management system (SMS), Manthan is likely to sign a contract with an international brand soon. “We will soon be signing Rs 120 crore contract for the management work for 10 years. We will also invest to build best infrastructure which includes network, encryption, SMS and call centre,” informed Manthan Broadband Services director Sudip Ghosh.

Created way back in 2002 through a merger of the operations of nine cable TV operators, Manthan has indeed come a long way.  The MSO caters to 30 lakh households, serving a greater part of Kolkata and West Bengal and other eastern regions with four digital headends and 40 analogue headends. It has more than 2,500 cable operator partners in the region.

Manthan had earlier earmarked an investment of Rs 600 crore, out of which around Rs 150 core was spent in the markets of Kolkata and Jharkhand. “We will now spend Rs 450 crore in other states of the east. The promoters would invest a part of it and Manthan is looking at raising debt from banks,” added Ghosh.

The company has a market share of 34 -35 per cent in the installed STBs offering 350 channels in Kolkata Metropolitan Area (KMA). Manthan has penetration in areas like Kolkata, Howrah, Hooghly, Baraipur and Chandannagar among others.

On the company’s plans to hit the capital market with its initial public offering (IPO) to fund its expansion plans in the next two to three years, Manthan Broadband Services director Gurmeet Singh said, “We have started the backend work. There are many regulatory issues which we have to look at.”

Also on the back of Indian rupee depreciating against the US dollar and Manthan as a company is likely to import more than 30 lakh STBs in the next one year. Ghosh said the import of the boxes have become costlier now as compared to when the rupee to dollar rate was Rs 46 - Rs 47 a dollar.

“Even if the import cost for us is Rs 2,000, we give a subsidy to consumers and sell at Rs 999,” he hinted, saying that apart from other cable operators, it has a tough war to fight with direct-to-home (DTH) players. “We feel a hit at the revenue but it does not strike the bottom line up since we are in other added services too,” he said.

Singh said that the company imports STBs mainly from China and added that if any local manufacturer sets up an assembling unit upon getting benefits and incentives from the government, it would help the industry people immensely.

Manthan currently employs more than 300 people. This number will go up by another 30 per cent by 2014 end. The MSO currently serves more than 25 lakh households in the states of eastern region. “Of this we have around 18 lakh analogue cable connections,” he informed.

According to sources, by September 2014, the rest of Bengal will witness 50 lakh STB installations. Also Orissa will see seven lakh installations, Jharkhand eight lakh-10 lakh, Meghalaya and Assam will register five lakh STB installations each.

Commenting on the reach of Manthan, Hathway Cable and Datacom MD and CEO Jagdish Kumar G Pillai said, “The fragmented cable TV is likely to see some consolidation and the same applies to eastern region too. Manthan’s investment plans in the eastern region shows its commitment.”

While aother MSO on the condition of anonymity stated: “Manthan had been performing well in the past but with digitisation kicking in, it has lost its hold on the market and dropped in its position. In terms of box supply and system integration, the company could not stand at par with its competitors. In fact recently due to funding issues, it has become difficult for it to operate in locations like Mednipur, Kharagpur and Bankura among other locations.”

Industry sources feel that the company in order to move ahead and achieve such ambitious plans will have to work jointly with other companies, going forward.

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