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Strong profit visibility
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The Rs 21,000-crore cable and satellite sector is likely to improve profitability on the back of higher subscriber base, lower costs and improving average revenue per user.

The consolidation activity and the Telecom Regulatory Authority of India’s (Trai’s) recently-proposed norms on foreign direct investment in the cable and satellite sector could hasten corporatisation and make operations of service providers more profitable.

The sector, which is currently dominated by the over 50,000 local cable operators, suffers revenue leakage due to under-reporting of subscriber numbers by operators.

The organised sector, comprising multi-system operators (MSOs) and direct-to-home (DTH) players, is sitting on huge losses due to this leakage and high customer acquisition costs.

However, analysts say the recent acquisition by Reliance Communications (RCom) of India’s third-largest national MSO, Digicable, fund-raising by MSOs Hathway and DEN Networks, as well as the proposed norms will bring the much-need capital.

This will not only help national MSOs consolidate but also compete against DTH players, which are spending heavily to acquire new customers. In a short period, DTH players have notched up 20 million subscribers in a market of 110 million cable and satellite connections.

Full Story: Indian DTH Blog

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