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MUMBAI: As the CAS story firms up, so too does the interest with
which big international cable companies view the Indian scenario.
The most active on this front appears to be John Malone's Liberty
Media Corp, which is eyeing an investment into the cable TV business
in India. The company has initiated talks with Hinduja-owned IndusInd
Media and Communications Ltd (IMCL) but no breakthrough has been
reached thus far, sources say.
Late last year, a senior team visited IMCL headquarters in Mumbai
but talks have stalled after that. A preliminary agreement on the
valuations couldn't be reached, sources say.
When contacted, Hinduja TMT Ltd MD K Thiagarajan said the cable
business of the company was attracting a "lot of interest from
strategic and financial investors." But he refused to comment
on whether the company was in talks with Liberty Media. "I
can't comment specifically on any investor," he said. IMCL,
which operates the cable business under Incablenet brand, is a subsidiary
company of HTMT.
Sources say HTMT was looking at a valuation of around $900 million
for its cable TV business. Interestingly, Zee Telefilms Ltd chairman
Subhash Chandra said, in an interview to a business channel, that
the value of his cable assets ought to be in the region of $800-900
million.
Liberty, however, is waiting to see how conditional access system
(CAS) rolls out. Investors feel digital cable TV will help organise
the industry and bring subscribers under the addressable system. Average
revenue per users (ARPUs) would also go up.
If Liberty does make an entry into India, then it will be Malone's
second big entry into the Asian market after Japan. According to
the latest report by Hong Kong-based Media Partners Asia (MPA),
Liberty-controlled J:COM, the most successful broadband cable TV
operation in Asia and in Japan, will April 15 launch HDR services
(High Definition Recorder capabilities with a High Spec Double Tuner
Recorder), a new J:COM digital service available in all J:COM franchises,
which pass 7.9 million homes.
Zee Telefilms has already announced its plans to de-merge Siticable,
a wholly owned subsidiary, into a separate company called Wire and
Wireless (India) Limited (WWIL). This would bring specific focus
into the cable business and be attractive to investors.
Queried by Indiantelevision.com earlier as to whether he saw the
demerged cable business (Siticable) and the direct consumer services
business (Dish TV) as being the most likely to invite international
interest for strategic and financial partnerships, Chandra had replied
in the affirmative.
HTMT is also planning to de-merge the company's IT/BPO and media
businesses into separate entities. "It couldn't be done this
year because of certain taxation issues. The programme is still
alive and we hope to de-merge early next fiscal. A committee of
directors are looking into the issue," said Thiagarajan.
When asked whether HTMT would de-merge after selling its stake
in Hutchison Essar Ltd, Thiagarajan said he wouldn't like to comment
on the issue. HTMT, together with its wholly owned subsidiary InNetwork
Entertainment Ltd, is holding 91.54 per cent of IndusInd Telecom
Network Ltd (ITNL) corresponding to a 4.68 per cent effective stake
in Hutch. HTMT plans to exit from the telecom business and sale
out its entire stake before Hutchison Essar goes for an initial
public offering (IPO).
With Zee de-merging its cable subsidiary, foreign companies may
now turn their eyes on WWIL. And with CAS rollout imminent, Liberty,
Comcast and Time Warner Cable may seriously look at setting up a
footprint in India.
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