- JD(U) under Nitish decides to become part of NDA, denies split in party
- Customs arrests Air India cabin crew for smuggling ganja
- Government, RBI in talks to shore up PSU bank capital
- Bihar flood toll mounts to 153, 17 districts affected
- IndiGo cancels 84 flights over engine issues
- Trai gets tough on call drops; slaps penalty of upto Rs 10 lakh
- Yogi Adityanath targets 'Yuvraj' Rahul Gandhi: 'Will not permit Gorakhpur to become picnic spot'
- Shivraj to lead BJP in 2018 election: Amit Shah
Siti Cable’s digital acquisition at around Rs 2,500 per subscriber
MUMBAI: Siti Cable Network, which is on an aggressive growth path, pays around Rs 2,500 per subscriber to acquire a digital network.
For an analogue acquisition, the price is as low as Rs 500 per subscriber.
The multi-system operator (MSO) recently acquired 76% stake in Mumbai-based Scod18 Networking and 51% of Vadodara-based Sai Star Digital Media to take its total subscriber base to an estimated 12 million, up from 10.7 million.
These two acquisitions are strategic in nature as they allow Siti Cable to expand in the Mumbai and Gujarat markets, keeping in view the broadband opportunity as well.
“Unless you are a strong player on the cable side, you cannot do broadband. It was part of a strategy to acquire these networks,” Siti Cable Network executive director and CEO VD Wadhwa told media analysts.
While not disclosing the acquisition price of these two cable networks, Siti Cable said it paid Rs 6.53 crore (Rs 653 million) for the five other recent purchases. These included 100% stake in Hyderabad-based Variety Entertainment, 51% stake each in New Delhi-based Bargachh Digital Communication Network, and Chittoor-based Krishna Teja Digital Entertainment. The national MSO has also agreed to pick up the remaining 49% stake in New Delhi-based Siti Faction and Siti Jony Digital Cable Network.
Siti Cable will continue to explore acquisition opportunities. If there is strategic value in acquiring, funding won’t be a constraint.
“We have not earmarked a separate amount for acquisitions, but it needs to make strategic sense to us. There are several markets like Bengaluru where there are a number of acquisition opportunities available. But we do not believe that it makes any economic sense for us to acquire those businesses, which is why we are letting it go. If there is any other good opportunity, we will continue to acquire and funding is not a big issue right now,” Wadhwa said.
Siti Cable has seeded about 3.1 million set-top boxes (STBs) in Phase III, out of which 1.1 million were deployed in the third quarter of the current fiscal. The MSO has an inventory of 1.1 million STBs and another three million are on order, including 300,000 HD boxes.
In the fiscal third quarter, ARPU has stayed flat at around Rs 100 in Phase I and Rs 76 in Phase II. “We have not been able to move the needle up on this front. We are trying to build consensus to increase the subscription by Rs 8–10 in the fourth quarter. Right now, the focus is more on seeding the boxes as well as on starting the monetisation of Phase III markets,” said Wadhwa.
The aim is to start with Rs 50 ARPU in Phase III markets and move this up to Rs 75 from April. Unlike Phases I and II, carriage revenue from the Phase III and IV markets is very low. Therefore, focusing on subscription revenue is important. This is also the reason why Phase III will respond quicker to collections on the ground. Incidentally, the STB activation charges are higher in Phase III as the subsidy element was more in the Phase I and II markets.