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Atria hikes stake in Beam Telecom to 80%; plans to invest Rs 2 bn in cable TV & broadband biz

MUMBAI: Atria Convergence Technologies, which is controlled by India Value Fund Advisors, has hiked its stake in Beam Telecom to 80 per cent and intends to fully acquire it soon.

Atria has acquired additional 20 per cent stake of the promoters of Beam Telecom and has an agreement to buy out their residuary stake in the Hyderabad-based broadband company.

Bala“We now hold 80 per cent stake in Beam Telecom. We will be buying out the remaining stake soon,” Atria CEO Bala Malladi told TelevisionPost.com.

The promoters were earlier holding 40 per cent stake in Beam Telecom while the rest was held by Atria. The buyout of the joint venture partners will mean that Beam Telecom becomes a wholly-owned subsidiary of Atria.

Bengaluru-based Atria had raised Rs 180 crore of debt to fund the stake acquisition. The balance amount of the secured non-convertible debentures (NCD) was used as capital expenditure for expansion of the broadband business and digitisation of its cable TV network.

Atria plans to raise fresh capital of Rs 200 crore (Rs 2 billion) to fund its expansion in broadband and cable TV businesses. It is preparing to seed set-top boxes (STBs) in towns that fall under digital addressable system (DAS) in Phase III. The company is also planning to expand its broadband subscriber base in the three cities where it is present.

“We are planning to invest Rs 200 crore over the next two years. This will be towards capex in broadband and digital cable TV. About 60 per cent of the investments will be in the broadband area,” said Malladi.

Controlled by private equity, Atria has cable TV operations in 10 cities of Andhra Pradesh and one city in Karnataka that will fall under Phase III.

In Bengaluru, Atria has deployed 125,000 STBs and is looking to take that up to 175,000. The estimated subscriber base in Andhra Pradesh is 300,000. Atria is targeting 0.5 million digital cable TV subscribers in Andhra Pradesh. In Hyderabad, it has broadband operations but is not present in the cable TV market.

Atria is planning acquisitions of cable TV networks who have over 150,000 subscribers. “We are not going to do small acquisitions. We are open to acquiring operators who have a minimum of 150,000 subscribers,” said Malladi.

Atria’s major expansion will, however, be in the broadband business. Just preceding the Phase II implementation of DAS, the company had exited from the cable TV market in Indore. It sold the network to UCN, a Maharashtra-based MSO which has regional ambitions.

“Indore is a business non-friendly market. There is lawlessness, and competition among the MSOs is unhealthy. We have exited from Indore to focus on more important markets,” said Malladi.

Late last year, Atria launched its broadband service in Chennai where it has no cable TV operators. “We decided to expand to Chennai because of its geographical proximity to Bengaluru. Besides, it is a growing city and has a demand for broadband,” said Malladi.

So, will Atria launch its cable TV service in Chennai? “We are not going to have cable TV operations in Chennai. There is not much scope for a new player. We have also decided to focus more on broadband expansion while going slow on the cable side of the business,” said Malladi.

The company has 450,000 broadband subscribers and uses the fibre-to-the-home technology. The broadband packages range between Rs 600 and 1,200. The broadband business contributes over 70 per cent of Atria’s total revenue.

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Atria Convergence to buy out promoters of Beam Telecom; raises Rs 1.4 bn debt