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IMCL acquires a cable network in Bengaluru; Grant Investrade awaits final clearance for HITS
MUMBAI: Hinduja Ventures Ltd (HVL), which is in the process of setting up a headend-in-the sky (HITS) service under its wholly owned subsidiary Grant Investrade Ltd (GIL), is awaiting final government clearances for the project and has placed orders for the equipment.
HVL’s media and communication business subsidiary IndusInd Media & Entertainment Ltd (IMCL), has acquired a cable network in Bengaluru to expand business.
For the fiscal ended 31 March 2015, HVL’s loss from IMCL widened to Rs 239.70 crore (Rs 2.4 billion), compared to a loss of Rs 197.33 crore (Rs 1.97 billion) a year ago. IMCL has seen its consolidated revenue drop 15 per cent in the fiscal to Rs 543.16 crore (Rs 5.43 billion), down from Rs 638.84 crore (Rs 6.39 billion) a year ago.
Meanwhile, GIL has acquired additional 150,000 equity shares in IMCL, constituting 0.2 per cent stake, effective 1 July 2014. GIL now owns 5.82 per cent stake in IMCL, while parent company HVL directly owns 56.09 per cent. HVL’s effective stake in IMCL has thus gone up to 61.91 per cent.
HVL has acquired the digital addressable cable TV network business of Bengaluru-based Mplex Networks Pvt Ltd for Rs 35 crore (Rs 350 million).
The deal includes digital cable rights in Bengaluru and Mysore along with certain fixed assets pertaining to CATV business.
Moreover, effective 31 December 2014, Jagsumi Perspectives Pvt Ltd ceased to be IMCL’s subsidiary as the latter had disposed of its investment. IMCL booked a loss of Rs 6.19 crore (Rs 61.95 million) on the same.
GIL received the HITS licence in March 2014, and the company was planning to launch the HITS platform, GHITS, starting January this year. However, while it received the NOCC clearance, some final government clearances are still pending.
The company said that it had placed the orders for equipment and the project is in the build stage right now. “GIL expects to be ready on time to meet the requirements of the scheduled implementation of Phases III and IV of the digitisation programme,” the company said.
The Hinduja group is planning to invest $100 million in the HITS project.
As reported earlier by TelevisionPost.com, GHITS will support IMCL’s InCablenet (brand under which IMCL operates its MSO biz) with all the backend services including CAS, SMS and IT (corporate & network) once operational.
GHITS will also provide specialist services like TV Everywhere and value-added services (VAS) to IMCL. HVL is looking at many synergies between GHITS and IMCL.
The MSO will not need to incur capital expenditure for the backend and upgrade costs to digital head-ends. IMCL will also benefit from lower operating costs for: DHE manpower and operation, including AMCs where applicable; backend staffing; administrative expenses; power and fuel; and multi-lingual call centre set-up costs and operation.
Furthermore, there will be additional savings on administrative expenses due to combined functions like HR and legal. IMCL will be the anchor customer for the HITS platform and provide a ready customer base to the platform, which will enable it to break-even faster.
HVL believes that with the mandate of digitisation, a number of cable operators will find themselves having to move from a B2B to a B2C model. Apart from considering their financial strengths and size, they will find it difficult to be able to muster and provide quality digital services with multiple choices to their customers and compete with other providers like direct-to-home (DTH).
HVL group CEO of Media and IMCL MD and CEO Tony D’Silva had earlier said that GHITS would be a white-label service. He had said that it would only be the service provider while tariff will be left to the last mile operators (LMOs) to decide.
HVL said that IMCL has seen ‘significant improvement’ in on-ground collection month-on-month over the last five months and that it is now drawing plans to ‘address growth potential’ in Phases III and IV of digitisation.
IMCL has an estimated subscriber base of 85 million across 36 cities in India including metros and major cities. It offers digital service under the InDigital brand in over 21 cities. It offers over 350 standard-definition and over 20 high-definition channels in key markets.