Television
Report on Shemaroo

'Challenge for cable ops is to offer additional services at a reasonable price' : Faizal N Syed - International equity investor and chairman of EMC, Taiwan's largest cable company

https://www.indiantelevision.com/sites/default/files/styles/smartcrop_800x800/public/images/tv-images/2014/08/21/a_67.jpg?itok=sAt2kaVX

For the cable operators in India, there is much to learn from Taiwan. The industry, which was unorganised, has undergone changes: consolidation, network upgradation, and a slow but steady march towards digitalisation. Almost 40 per cent of the national cable TV network is two-way activated.

There is a long way to go though, as the country targets 85 per cent digital television pneetration by 2006. Of a total of 4.2 million paying subscribers, there are less than 125,000 true digital customers in Taiwan.

Eastern Multimedia Company (EMC) Ltd, Taiwan's largest cable TV operator with 1.04 million subscribers through its 13 majority-owned local system operators (SOs), is leading the way in the digital drive. It provides over 100 analogue channels and it is accelerating deployment of its digital platform. The company has invested NT$ 6 billion to upgrade its network to 750 MHz and make it two-way enabled.

EMC chairman Faizal N Syed says the multi system operators (MSOs) in Taiwan control the pipe from the digital headend to the subscribers, encouraging capital infusion into cable companies. Also an international equity investor as the managing director of AIDEC Management Company Pte Ltd (which manages a US$400 million private equity fund), he has broad oversight of regional investments in capital intensive projects in the media, telecom, water, power and transportation sectors. He has experience in international mergers and acquisitions as an advisor and has also worked at JP Morgan Securities as a banker to numerous Indian and South East Asian clients.

In an interview with Indiantelevision.com's Sibabrata Das, Syed talks about how crucial it is for the MSOs in India to control the cable TV distribution pipe end-to-end if they are to attract big investments. Taiwan has also allowed 60 per cent foreign investments, creating a healthy corporate governance environment.

Excerpts:

Despite a drive towards digitalisation of cable TV, why has the progress been slow in Taiwan?
The slow take up for digital cable service is largely due to huge capital expenditure requirements, lack of premium programming for the digital platform, and regulation. There are less than 125,000 true digital subs in Taiwan, far behind the government information office's target of an 85 per cent digital television penetration rate by 2006. The cost for the set-top box (STB) alone for full digital deployment would be approximately $382 million or NT$12.6 billion (NT$ 3,000 x 4.2 million subs), not to mention other costs. Our company has invested NT$ 6 billion in digital.

What made the cable industry in Taiwan invest more than Indian companies?
In Taiwan, the multi system operators (MSOs) control the pipe from the digital headend to the subscribers. That is not the case in India. The MSOs here will have to control the pipe end-to-end. The rationalisation between the signal originated and to the household has encouraged us to make more investments in the pipe. We have increased our value added services.

What helped the MSOs in Taiwan to consolidate and modernise their operations?
In Taiwan, cable TV began in as ad hoc a manner as in India. It was actually the regulator who provided an enabling environment for consolidation in the industry. Licensing came into practice. We now have dual operators per licensed area. We also have sole operators in certain territories. More interestingly, the regulator has allowed 60 per cent foreign ownership at the MSO level. Foreign capital has come with conditions and corporate governance has improved.

How then has Taiwan prevented the emergence of cable monopolies?
There are anti-monopoly provisions which prohibit MSOs from amassing one-third or more of total subscribers in Taiwan. There is, thus, a limitation on ownership to the customer base. The five major MSOs control 80 per cent of the cable TV market. The remaining 20 per cent is controlled by more than 20 independent players. According to June 2004 figures, Taiwan has 4.2 million paying subscribers. Our company enjoys 25 per cent of market share. The natural outcome of this consolidation has meant that cable companies have made investments over time. There is an incentive to invest.

Are MSOs investing on network upgradation to make it two-way enabled?
Only 40 per cent of the national cable TV network is two-way activated. EMC has upgraded 87 per cent of its network to 750 MHz. In Taipei City, 91 per cent of our network is two-way enabled while in Island City it is at 64 per cent.

'It was the regulator who provided an enabling environment for consolidation in the Taiwan cable industry'

Does Taiwan have a rate regulation system like we have in India?
The tariff cap for basic cable TV subscription fees has been kept at NT$550 to NT$600 per month for approximately eight years. Our price is at NT$550. It is difficult to bring in premium content at the regulated price. For increasing rates, we have to go digital.

How has that affected the industry?
Prices on cable are very sticky. They don't go up. Customers are spoilt because they get more channels but the price umbrella is very low. Niche services are costly. And delivery on those pipes cost money. The challenge for cable operators is how to provide additional services at a reasonable price.

Is payout to broadcasters a big issue?
MSOs in Taiwan actually pay uniform price to the broadcasters. There is one price in the marketplace for content. This system has evolved over time. And by government regulation, all MSOs have to carry the same channels and at the same position. It is only in the past that MSOs put different channels and on different positions.

What are the digital plans for EMC?
We want to first roll out digital services in those areas where we are sole operators. Since we would be exclusive operators, we would face no threat of price wars from rival cable networks. This will allow us to invest on content and in our customers. We can offer them a host of value-added services. In the next phase of growth, we will stretch our digital services to territories where there are dual operators. Our operating strategy is to encourage migration to digital platform, increase channel capacity, and offer on-demand and premium services. We can put our focus on package offerings - family, kids, adult entertainment and value - which will be priced differently. We are developing proprietary content in conjunction with international partners.

Are cable companies able to grow broadband subscribers?
Broadband growth is an important part of the competitive dynamics in Taiwan. We are pushing our broadband services. We have a 15 per cent penetration.

Chunghwa Telecom, the nation's biggest phone company, has started delivering TV signals over its high-speed Internet links in an effort to tap into the digital broadcasting sector. How do you see competition emerging from telecom companies?
Telecom companies will come into this area and we will have to compete with them. Chunghwa Telecom has access to all the homes. Telecom companies will seek to make inroads but, barring access to a level playing field, the MSOs will continue to provide quality entertainment programming at a reasonable price. And if fully supported, EMC and the other MSOs would be pleased to provide affordable telephony services.

Latest Reads

https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/08/cv.jpg?itok=TwbBPxW2
Rahul Kanwal elevated to executive director, Business Today

India Today Group has elevated Rahul Kanwal to the role of executive director of its business magazine, Business Today. The new business responsibility is in addition to his current role as news director of news channels Aaj Tak and India Today. Apart from leading news gathering operations for the...

Television TV Channels News Broadcasting
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/08/n18.jpg?itok=NwXWmh4-
Network18 & Viacom18 dole out 100% variable pay to employees

Amid the second wave of the Covid2019 crisis, many organisations are taking initiatives for the well-being of their workforce. Even as several news and media enterprises are slashing salaries or resorting to mass lay-offs, Network18 and Viacom18 has paid all eligible employees the variable portion...

Television TV Channels News Broadcasting
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/08/cam.jpg?itok=gHgq6PVC
No more TV & film shoots in Goa, govt enforces 15-day lockdown

With one of the highest rate of Covid2019 infections in the country, Goa chief minister Pramod Sawant on Friday announced a state-wide curfew in the state from 9 May to 23 May. According to government data, Goa has recorded a positivity rate of 41 per cent, which has surpassed the infection rates...

Television Production House Fiction
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/08/aa.jpg?itok=Q5eE7dYy
Guest column: ‘Digital Drive,’ not ‘Cover Drive’, is the best shot for the future of cricket

Let’s face it - globally cricket is not the most popular sport. The ICC, cricket’s global governing body of cricket was founded in 1909 in Lords. In its 110+ years of existence, it has managed to create only 12 full-time member countries competing in Test cricket. Currently, cricket suffers from...

Television TV Channels Sports
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/07/photogrid_plus_1620392241949.jpg?itok=NA5hVeO_
BCCI to incur loss of Rs 2500 crore if IPL’s called off: Sourav Ganguly

KERALA: Board of Control for Cricket in India (BCCI) president Sourav Ganguly has revealed that the governing body will incur a loss of Rs 2,500 crore should the suspended Indian Premier League (IPL) 2021 be called off for good. This year's IPL was cancelled earlier this week after the bio-secure...

Television TV Channels Sports
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/07/photogrid_plus_1620387236936.jpg?itok=ZDE7Iycs
Star Movies garners record viewership in week 17: BARC

KERALA: Star India’s English films channel Star Movies is a popular destination for television audiences who love to watch Hollywood movies. The latest BARC data suggests that Star Movies has garnered a record viewership over the past couple of months. The channel has successfully maintained the...

Television TV Channels Viewership
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/07/photogrid_plus_1620383395188.jpg?itok=h0dTKm9i
Zee Cinema bags 7 awards across categories at ACEF 10th Global Customer Engagement Forum and Awards, Primetime Awards 2020 and Global Digital Marketing Excellence Awards 2021

Zee Cinema, the leading Hindi Movie Channel with a strong legacy and presence in Hindi speaking markets, has proven its creative mettle once again. Known for pushing boundaries through innovation and differentiation, the channel bagged multiple awards across various categories at ACEF 10th Global...

Television TV Channels Movie Channels
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/07/photogrid_plus_1620395841085.jpg?itok=zeeR3t_c
Colors Bangla to telecast Joy Filmfare Awards Bangla 2020

Colors Bangla is all set to telecast the fourth edition of the Joy Filmfare Awards Bangla 2020 on the channel at 6 pm on 9 May. The event will also be simulcasted live on Filmfare’s Facebook page.

Television TV Channels Regional
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2021/05/07/tk.jpg?itok=039Ap124
Our aim is to always create screen agnostic content: Viacom18’s Anu Sikka

The pandemic has been an epoch changing event for most adults, but it has also had a significant impact on children, too. A year of being confined to their homes later, the world is no longer their oyster, but has shrunk to the small screen – their window to the unseen and unknown domain outside.

Television TV Channels Kids

Sign up for our Newsletter

subscribe for latest stories

* indicates required