Sector Update -Cable & Satellite Industry:
C o u n t d o w n t o s u n s e t d a t e f o r P h a s e I …
As the digitisation deadline of June 30, 2012 for Phase I approaches,
differences exist among the various parties involved in extending or
persisting with the same deadline. While the broadcasters have been
lobbying the government to stick to the existing deadline, some of the
MSOs (barring the large ones like Hathway Cable and Den Networks)
and LCOs have asked for an extension of two or three months as they
are finding it hard to seed set top boxes in all their households due to
late announcement of the revenue share model by Trai, unavailability
of set top boxes and lack of consumer awareness. MSO’s problems
could be a blessing for DTH operators who are gearing up to speed up
their subscriber addition. However, Hathway is best placed among
MSOs, having already seeded 40% or ~1 million of its ~2.3 million
subscribers in the metros and having an inventory of ~ 0.7 million
STBs. Nonetheless, we expect at least a three month delay in
implementation of digitisation even if the deadline is not extended.
The final call will be taken by the ministry of Information &
Broadcasting on June 25, 2012.
��
MSOs facing logistics problems; Hathway best placed
The gravest problem faced by an MSO remains unavailability of enough
set top boxes in their inventory. Only 23.7% of the subscribers of national
level MSOs have been digitised till June 1, which leaves ~9.4 million
more to go. Most MSOs are sure they will be unable to meet the June 30
deadline. The unwillingness of LCOs before the announcement of the
revenue share model and lack of awareness among consumers have also
proven problematic for the MSOs.
Hathway is currently the front runner in voluntary digitisation, having
seeded ~40% of the set top boxes required and with another 0.7 million
set top boxes in their inventory. The management of Hathway believes
the deadline may be extended by two or three months, thus giving
enough room for Hathway to completely digitise its subscribers.
O u t l o o k
The MSOs at large do not seem to be in any position to meet the
digitisation deadline and it is not clear if the DTH industry has enough set
top boxes to cater to all the analogue subscribers post June 30. We
reiterate our view that the June 30 deadline may not be met and there
may be a delay of at least three months in digitisation. We believe the
DTH operators and top MSOs (mainly Hathway and Den) stand to be the
highest beneficiary of the digitisation mandate. We continue to rate
Hathway and Dish TV as BUY with a target price of | 200 and | 71,
respectively
http://content.icicidirect.com/mailimages/ICICIdirect_DigitisationDeadline.pdf
C o u n t d o w n t o s u n s e t d a t e f o r P h a s e I …
As the digitisation deadline of June 30, 2012 for Phase I approaches,
differences exist among the various parties involved in extending or
persisting with the same deadline. While the broadcasters have been
lobbying the government to stick to the existing deadline, some of the
MSOs (barring the large ones like Hathway Cable and Den Networks)
and LCOs have asked for an extension of two or three months as they
are finding it hard to seed set top boxes in all their households due to
late announcement of the revenue share model by Trai, unavailability
of set top boxes and lack of consumer awareness. MSO’s problems
could be a blessing for DTH operators who are gearing up to speed up
their subscriber addition. However, Hathway is best placed among
MSOs, having already seeded 40% or ~1 million of its ~2.3 million
subscribers in the metros and having an inventory of ~ 0.7 million
STBs. Nonetheless, we expect at least a three month delay in
implementation of digitisation even if the deadline is not extended.
The final call will be taken by the ministry of Information &
Broadcasting on June 25, 2012.
��
MSOs facing logistics problems; Hathway best placed
The gravest problem faced by an MSO remains unavailability of enough
set top boxes in their inventory. Only 23.7% of the subscribers of national
level MSOs have been digitised till June 1, which leaves ~9.4 million
more to go. Most MSOs are sure they will be unable to meet the June 30
deadline. The unwillingness of LCOs before the announcement of the
revenue share model and lack of awareness among consumers have also
proven problematic for the MSOs.
Hathway is currently the front runner in voluntary digitisation, having
seeded ~40% of the set top boxes required and with another 0.7 million
set top boxes in their inventory. The management of Hathway believes
the deadline may be extended by two or three months, thus giving
enough room for Hathway to completely digitise its subscribers.
O u t l o o k
The MSOs at large do not seem to be in any position to meet the
digitisation deadline and it is not clear if the DTH industry has enough set
top boxes to cater to all the analogue subscribers post June 30. We
reiterate our view that the June 30 deadline may not be met and there
may be a delay of at least three months in digitisation. We believe the
DTH operators and top MSOs (mainly Hathway and Den) stand to be the
highest beneficiary of the digitisation mandate. We continue to rate
Hathway and Dish TV as BUY with a target price of | 200 and | 71,
respectively
http://content.icicidirect.com/mailimages/ICICIdirect_DigitisationDeadline.pdf
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