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UBS Investment Research
India Media Sector
Key takeaways: UBS India CEO/CFO Forum
Hathway, Dish TV and UTV participated in UBS India CEO/CFO Forum
We hosted Hathway Cable & Datacom (Hathway), Dish TV and UTV Software
(UTV) at the UBS India CEO/CFO Forum on 1-3 November 2010. Hathway was
represented by its CEO, Mr. K. Jayaraman. Dish TV was represented by its MD,
Mr. Jawahar Goel and its CFO, Mr. Rajeev Dalmia. UTV was represented by Mr.
Rajeev Wagle, Group CFO, and Mr. Amit Banka, Senior VP, Head of Business
Development and Strategy.
Key takeaways from Hathway management meeting
1) Hathway believes mandatory digitisation in Mumbai, Delhi, and Kolkata is
likely to be implemented by July 2011; Hathway has an estimated reach of 1.6-
1.7m homes in Mumbai and Delhi. Given recent TRAI recommendations, Hathway
is now focussing more on upgrading analog subs homes to digital platform versus
last-mile acquisitions. 2) Hathway plans to increase its digital subs base to 1.7-
1.8m (from 1.2m now) by end-FY11. 3) Hathway has set an internal target of
Rs2.5bn EBITDA for FY11.
Key takeaways from Dish TV management meeting
~350,000 subscribers in October 2010. It aims to add around 3m subscribers in
FY11 and FY12. 2) Dish TV has entered into fixed content cost agreements with
large broadcasters (excluding Sun TV) for 3-5 years, with an annual escalation of
7%. The first contract is likely to be up for renewal end-FY11.
Maintain Buy rating on Hathway and Dish TV; Hathway is our top pick
Our price targets of Rs275/Rs70 for Hathway/Dish TV are DCF-based. We believe
both Hathway and Dish TV are beneficiaries of digitisation in India.
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