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Home » News » Business

Apr 04, 2012, 02.40 PM | Source: CNBC-TV18

Looking at 2m subscriber base in phase I: Hathway

In an interview to CNBC-TV18, G Subramanium, chief financial officer of Hathway says, the company is looking at 2 million subscriber base in phase I. “Along with our JV partners in Kolkata, which will be another 400,000 boxes, we should go upto about two million boxes in the first phase,” he adds.

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Looking at 2m subscriber base in phase I: Hathway

In an interview to CNBC-TV18, G Subramanium, chief financial officer of Hathway says, the company is looking at 2 million subscriber base in phase I. “Along with our JV partners in Kolkata, which will be another 400,000 boxes, we should go upto about two million boxes in the first phase,” he adds.

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G Subramanium, CFO, Hathway
In an interview to CNBC-TV18, G Subramanium, chief financial officer of Hathway says, the company is looking at two million subscriber base in phase I. “Along with our JV partners in Kolkata, which will be another 400,000 boxes, we should go upto about two million boxes in the first phase,” he adds.

The Union Cabinet is expected to soon consider a proposal to increase foreign direct investment cap in broadcasting services like Direct-to-Home and cable TV networks to a uniform 74%.

Subramanium says, foreign investors are closely watching the Indian market. “But it will be premature to say that they will jump straight in,” he adds.

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: Will the potential increase in FDI limit from 49% to 74% in your kind of industry is going to be a big boost? Are there people waiting to invest in?

A: I don’t know about people being ready as yet. Definitely, they are watching the sector for the last few years. But it will be premature to say that they will jump straight in. The good news is atleast the larger players, the multi system operators (MSOs) like us, have to be capitalised at this point. We are not depending upon this to happen to fund, particularly the phase I of the rollout. So, the benefits, if any, will flow through when phase II happen and that is how we are seeing it. We are not hanging in substance because of this at this point.

Q: It is always good to get some kind of joint ventures going or strategic assistance or strategic relationships going. Would atleast that be triggered, should this 74% be agreed to?

A: Certainly, there will be interest. This is one of the largest market for cable television left to conquer for these large players. I am very sure they will be looking at this development very keenly. That will eventually lead to the entry of one of the other of these large cable television networks.

Q: Were they held back by the 49%? Did anybody make use of that in the first place?

A: I think they were more held back because of the digitisation. Now that digitisation is imminent and they see greater visibility as far as the revenues are concerned. I think the interest is more driven by that. Ofcourse the incentive now is that they can probably go up to 74%.

Q: Can you give us a sense of how exactly the rollout is doing at this point in time? What are the funding requirements for the phase I, which the company is possibly in need of?

A: We probably will be addressing about two million subscribers in phase I. We have already seen a considerable number of boxes in the universe that we serve. We expect to additionally or incrementally feel about 1.2 million beyond what we have already done taking it up to 1.6 million, as far as our universe is concerned. Along with our JV partners in Kolkata, which will be another 400,000 boxes, we should go upto about two million boxes in the first phase.

Q: The last time digitisation started, there were quite a few bottlenecks which stopped it from getting completed and it was quite half-handed. Are there any similar bottlenecks, which you are facing at this point in time? Hence, do you believe that digitisation is going to be completed by the sunset date which is provided?

A: On the contrary, I think the government has been fully putting its shoulder behind this whole policy initiative. We are not seeing any major issues. Obviously, there are players in the value chain who are concerned how this is going to affect their business model, particularly the local cable operators (LCOs). But we would like to assure the entire value chain that is moved that is positive for all people, all players in the value chain and therefore it is beneficiary.

Q: How do things change at your own end? Do you expect that the losses get lessened because of digitisation getting underway or simply because businesses getting robust?

A: Obviously because we have not been capturing the 100% of the revenues that are collected on graph. Therefore, obviously this will give a fillip to the gross margin that we earn from this business. So, over a period of the next couple of years, we expect the business to turnaround in a very healthy fashion.

Q: Is there any clarity with regards to the revenue sharing between LCOs and cable operators at this point in time?

A: I think it is still a matter of discussion. I don’t know whether the Telecom Regulatory Authority of India’s (TRAI’s) final document will talk about this but we are fairly sure that it will be a very fare share between the MSO, the broadcaster and the local cable operators and the economic should work for us.

Q: You said two years before things get robust.

A: That is because of the initial investment that we need to make in Q2.

Q: So FY14 is likely you think?

A: Yes, possibly.

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Looking at 2m subscriber base in phase I: Hathway

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