Five players are slowly emerging in this space with geographic spreads that can be labelled, in a manner of speaking, “national”. These include the Raheja-controlled Hathway Cable & Datacom, the Essel Group’s Wire & Wireless India (known as WWIL), the Hinduja Group’s IndusInd Media, DEN Digital Entertainment Network (set up by GBN founder Sameer Manchanda and Network18 chief Raghav Bahl) and Digicable Network India (set up by Jagjit Singh Kohli). These five MSOs have managed to gobble up some small last-mile players, either through mergers and acquisitions or by converting some into franchisees.Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.
They control, between them, access to a little over 20 million homes, or a quarter of the cable pie. This consolidation is attracting the attention of private equity players. “The cable industry generates annual revenues of more than Rs 10,000 crore. If you compare the revenues of other parts of the industry such as advertising revenue for broadcasters and revenues of films, then this is larger than both.
In the past, money has not come into this (cable) space due to the highly disorganised nature of the industry (which encourages massive under-reporting of subscriber numbers), but it has always been a profitable business,” says Vikram Nirula, Partner, India Value Fund Advisors (IVF). Incidentally, IVF has recently picked up stake in Bangalore-based Atria Convergence Technologies, which is a digital and broadband service provider. In the recent past, the Jagjit Singh Kohli and Yogesh Shah-promoted Digicable drew an investment from UK firm Ashmore Investment Management, which now owns a 49 per cent stake in the company. Similarly, Ortel (in Orissa) raised funds from New Silk Route (a Mauritius-based PE firm) and older player Hathway counts ChrysCapital as one of its shareholders.
September 21, 2008
Update on the Cable TV landscape
Business Today has an article on the business of Cable TV networks.