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India Media
Cabinet Passes Ordinance
for Cable Digitization: A Plus
for HAWY, DISH, ZEE, SUTV
Quick Comment: The Union Cabinet has passed an
ordinance approving the timeline suggested by the
Ministry of Information and Broadcasting for mandatory
digitization. We believe this is a positive development for
companies like Hathway, Dish TV, Zee and Sun TV, in
that order. As penetration of digital delivery platforms
increases from the current level of ~ 27% of the total
C&S (cable and satellite) subscriber base, MSO’s like
Hathway should gain substantially. DTH players like
DTIL, and broadcasters with a high proportion of
subscription revenues, should also gain.
Impact: As analog cable's proportion of the TV delivery
market decreases with mandatory digitization as
proposed in the ordinance, higher transparency will
likely follow. This should lead to big gains for MSO’s and
broadcasters which would, in that case, receive their fair
share from the subscriber collections. In the current
analog system of about 95 m subscribers, not more than
15% of subscribers are reported by the LCO’s, leading
to big revenue leakage for MSO’s (even after taking into
account the sharp dip in carriage and placement
revenues for MSO’s that is likely post digitization) and
broadcasters. Once digitization happens, the real
subscriber base cannot be concealed. In the first stage
of proposed digitization, where the metro cities are to be
converted to digital platform, we estimate there will be
about 5-5.5 million subscribers to be converted.
We continue to believe that the timeline is a bit
aggressive even if the ordinance is a concrete step
towards digitization. We expect confusion in the
beginning of every stage, especially regarding the
agency responsible for implementation. As of now, we
do not see a need to change our forecasts, since the
process of digitization is happening per our expectation
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Media
Cabinet Passes Ordinance
for Cable Digitization: A Plus
for HAWY, DISH, ZEE, SUTV
Quick Comment: The Union Cabinet has passed an
ordinance approving the timeline suggested by the
Ministry of Information and Broadcasting for mandatory
digitization. We believe this is a positive development for
companies like Hathway, Dish TV, Zee and Sun TV, in
that order. As penetration of digital delivery platforms
increases from the current level of ~ 27% of the total
C&S (cable and satellite) subscriber base, MSO’s like
Hathway should gain substantially. DTH players like
DTIL, and broadcasters with a high proportion of
subscription revenues, should also gain.
Impact: As analog cable's proportion of the TV delivery
market decreases with mandatory digitization as
proposed in the ordinance, higher transparency will
likely follow. This should lead to big gains for MSO’s and
broadcasters which would, in that case, receive their fair
share from the subscriber collections. In the current
analog system of about 95 m subscribers, not more than
15% of subscribers are reported by the LCO’s, leading
to big revenue leakage for MSO’s (even after taking into
account the sharp dip in carriage and placement
revenues for MSO’s that is likely post digitization) and
broadcasters. Once digitization happens, the real
subscriber base cannot be concealed. In the first stage
of proposed digitization, where the metro cities are to be
converted to digital platform, we estimate there will be
about 5-5.5 million subscribers to be converted.
We continue to believe that the timeline is a bit
aggressive even if the ordinance is a concrete step
towards digitization. We expect confusion in the
beginning of every stage, especially regarding the
agency responsible for implementation. As of now, we
do not see a need to change our forecasts, since the
process of digitization is happening per our expectation
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