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Cable Distribution – Immense growth potential
Since 2003 the government has become serious about the implementation of digitisation
of cable network. Government is even ready to put off the signals in the Metros post
sunset date in metros.
DAS roll out is inevitable but it may possibly be delayed by 2 to 3 months.
Landed cost of an STB is Rs1400, MSOS has started giving the STB at a subsidised
rate of Rs750-Rs800 per box, lower than what DTH players are offering.
For Phase I and Phase II cities, the fibre optic laid is capable enough of carrying the
digital feed, Phase III and IV towns may require some new cables to be laid.
DTH Vs Digital Cable – in the long run Digital is expected to outperform as it can carry
more channels, can offer broadband services and is more cost competitive relatively to
DTH .
For the FTA channels, the industry is pitching for a charge of Rs50 for 30 FTA channels,
and the minimum basic package should not exceed Rs150 excl. of taxes.
Challenges in Implementation
Huge Capex - Approximately 10-12mn boxes will be required for Phase-I digitisation,
resulting in a capex of ~Rs11bn to be made by MSOs.
Availability of STBs to capture the opportunity may be a problem as order for STBs
need to be placed minimum 3 months in advance.
Execution Risk at the end of MSOs : Business model will change from B2B to
B2C.
No clarity on revenue sharing between the stakeholders of the value chain.
Radio - Bleak performance
Radio advertising growth was sluggish in 2011 as it grew mere 2%. Radio has been and
will always be a dependant form of media. An advertiser looks at radio from an angle of
what more it can offer than just advertising.
Outlook for 2012
Advertising on radio is expected to grow at 5% in 2012. The belief is that radio will always
be a dependant media. Also, phase-III may not pump in as much revenues as the industry
desires because the ad rate in the smaller towns would be very low and even niche channels
will not be able to demand a high rate per se considering that the ad rate in major metros
and mass music channels playing bollywood music is also in the range of Rs1,500-Rs2,000
per 10 seconds.
Outdoor Media - Blank period
Outdoor advertising de-grew 10% in 2011. Mumbai contributes 30-40% of oudoor advertising
in India. 2011 was not a good year for outdoor advertising in Mumbai with most of the
hoardings going empty. Non FMCG spending had dropped considerably.
Outlook for 2012
Outdoor Advertising will grow at a modest 5%. The focus is shifting to small towns where
it’s doing well and the most of the growth will be contributed from those regions. Also,
digital and premium outdoor advertising is on the rise like high bids being sold for airport
sites especially in Mumbai. Non- FMCGs are spending very less, even if they spend, they
would look for efficiencies which are better defined on Print and Television compared to
Outdoor.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cable Distribution – Immense growth potential
Since 2003 the government has become serious about the implementation of digitisation
of cable network. Government is even ready to put off the signals in the Metros post
sunset date in metros.
DAS roll out is inevitable but it may possibly be delayed by 2 to 3 months.
Landed cost of an STB is Rs1400, MSOS has started giving the STB at a subsidised
rate of Rs750-Rs800 per box, lower than what DTH players are offering.
For Phase I and Phase II cities, the fibre optic laid is capable enough of carrying the
digital feed, Phase III and IV towns may require some new cables to be laid.
DTH Vs Digital Cable – in the long run Digital is expected to outperform as it can carry
more channels, can offer broadband services and is more cost competitive relatively to
DTH .
For the FTA channels, the industry is pitching for a charge of Rs50 for 30 FTA channels,
and the minimum basic package should not exceed Rs150 excl. of taxes.
Challenges in Implementation
Huge Capex - Approximately 10-12mn boxes will be required for Phase-I digitisation,
resulting in a capex of ~Rs11bn to be made by MSOs.
Availability of STBs to capture the opportunity may be a problem as order for STBs
need to be placed minimum 3 months in advance.
Execution Risk at the end of MSOs : Business model will change from B2B to
B2C.
No clarity on revenue sharing between the stakeholders of the value chain.
Radio - Bleak performance
Radio advertising growth was sluggish in 2011 as it grew mere 2%. Radio has been and
will always be a dependant form of media. An advertiser looks at radio from an angle of
what more it can offer than just advertising.
Outlook for 2012
Advertising on radio is expected to grow at 5% in 2012. The belief is that radio will always
be a dependant media. Also, phase-III may not pump in as much revenues as the industry
desires because the ad rate in the smaller towns would be very low and even niche channels
will not be able to demand a high rate per se considering that the ad rate in major metros
and mass music channels playing bollywood music is also in the range of Rs1,500-Rs2,000
per 10 seconds.
Outdoor Media - Blank period
Outdoor advertising de-grew 10% in 2011. Mumbai contributes 30-40% of oudoor advertising
in India. 2011 was not a good year for outdoor advertising in Mumbai with most of the
hoardings going empty. Non FMCG spending had dropped considerably.
Outlook for 2012
Outdoor Advertising will grow at a modest 5%. The focus is shifting to small towns where
it’s doing well and the most of the growth will be contributed from those regions. Also,
digital and premium outdoor advertising is on the rise like high bids being sold for airport
sites especially in Mumbai. Non- FMCGs are spending very less, even if they spend, they
would look for efficiencies which are better defined on Print and Television compared to
Outdoor.
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