Sumangali in talks to acquire RPG Netcom

MUMBAI: Sumangali Cable Vision is on the prowl. The Chennai-based multi system operator (MSO) is in talks to acquire RPG Netcom, a move which coincides with Sun Network's plans to launch a Bengali channel 'Surjo' this April.

Sources say RPG Netcom, the dominant MSO in Kolkata, has given the mandate to Ernst & Young to find a buyer. The buzz is that Deloitte is carrying out the due diligence on behalf of Sun Network.

Neither companies were willing to talk about the negotiations. When contacted, Vittal Sampadakumaram of Sumangali Cable Vision declined to comment. RPG Netcom CEO Amit Nag also said he was not in a position to comment on the issue.

RPG Netcom has been trying to find an equity partner for the last few years. The negotiations with Star India broke down after the government passed legislation on the conditional access system (CAS). Star's argument was that CAS would require huge capital infusion while there was no estimate on the cash earnings that would come into RPG Netcom.

RPG's disadvantage is that it has very few direct points and, like the other MSOs, has little control over its last mile operators. Besides, the scope to offer value-added services in West Bengal is limited.

So why is Sun Network's Sumangali Cable Vision showing interest? Analysts believe the acquisition of RPG Netcom will provide Sumangali an entry strategy while Surjo channel will get distribution support.

The talks were initiated over a month ago and RPG Netcom officials went to Chennai for discussions. Sumangali officials, according to a source, have also visited the RPG Netcom office for further talks.

Sun Network is planning to move out of its traditional southern bastion to reach out to a pan national market. Kalanidhi Maran has already announced plans to launch a Hindi channel in 2006. So it would be logical to expect Sumangali to make a similar march outside the south into other markets after it has breached "Bangla land".


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