Quake aftershocks may cost industry upto Rs 1 billion

(Posted on 2 February 9:45 pm)

As the western Indian state of Gujarat picks up the pieces in the aftermath of the earthquake that rocked the state on 26 January, the Indian television industry is still counting its losses which are large to say the least.

Aside from the human casualties, there has been the destruction of property and infrastructure. And the losses in revenues will be significant because Gujarat had one of the highest cable penetrations in the country at 70 per cent reaching six million homes, (Himachal Pradesh tops at 73 per cent but is a very small state).

Under strong searchlights, firemen, Indian Army personnel and volunteers search for quake survivors (Courtesy Associated Press)

In terms of human casualties it has been confirmed that one of Star TV's distribution executives in Ahmedabad died along with her husband, infant son and father-in-law in a building collapse. There are also unconfirmed reports that eight to 10 cable TV operators died across the state. One of the largest cable TV operators in Bhuj died in the quake. Clear figures on the final toll will take some time to come in because communications in may areas are still to be restored.

Industry sources estimate it will take at least a year for some semblance of normalcy to return. It is impossible to assess at this stage just to what extent business will be effected but the total losses could be in the region of RS 1 billion.

One surprising aspect of this tragedy is that the state, which is a manufacturing hub for the cable TV trade has miraculously escaped almost unscathed out of it all. Ahmedabad, which is a major manufacturing centre, presents a strange picture with many units intact while residential buildings in the vicinity have been reduced to rubble, says Satellite & Cable TV magazine editor Dinyar Contractor. Jamnagar, a major production centre of brass parts, had a similar tale to tell, Contractor says.

A player which has suffered badly is MSO Hathway Cable, in which Star TV owns a 26 per cent stake. The apartment block in which its headend was housed in Ahmedabad collapsed on it. Although no one died the place is a mess, a Hathway spokesperson said. It would take at least a month before some semblance of normalcy could be restored, he said. Hathway had a 25 per cent share of the market restricted to Ahmedabad, according to him.

Sony Entertainment Television fortunately did not lose any personnel but has suffered significant material losses, Hitesh Sabharwal, Sony's head of distribution, says. He said the worst hit were places like Bhuj, Bachau, Bhavnagar, Rajkot and Jamnagar.

NK Rouse, Star TV's head of distribution in the western region, believes that almost 30 per cent of the homes in Gujarat will be without a proper cable TV connection. "Close to 1.8 million will be impacted," he says.

Sabharwal estimates that the total loss to the industry in terms of equipment alone was to the tune of RS 500 million.

Broadcasters have to contend with the almost total stoppage at least in the near term of subscription revenues. Sabharwal says Sony is losing between RS 2 to 3 million a month. Rouse says there is likely to be a 30 per cent reduction in collections.

The television industry has a mountain to climb in terms of getting back on track after the disaster that has struck Gujarat as have millions across the state. It will be painful but the industry will have to come together on this and work out how best to go forward.