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SN Sharma to start second innings at DEN

MUMBAI: Sameer Manchanda is getting back his old warhorse SN Sharma to run DEN Networks a little less than 20 months after they had separated.

Sharma will most likely sit on the saddle on Tuesday, bringing back memories of the growing years of DEN as a national multi-system operator (MSO). His return will go down well with DEN’s joint venture partners and, hopefully, with investors.

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“Sharma, who had served long years as CEO at DEN, is returning to the company in a similar role. He has been relieved from Reliance Jio and will take up his role most probably from today,” a source said. Sharma was part of the leadership team to look into the cable TV side of Reliance Jio’s business.

TelevisionPost.com was the first to report that Sharma would join DEN Networks.

Manchanda’s bet on his old CEO is seen as a strategic bid to accept the market reality—cable TV still runs on a complex web of relationships, the old guard can bring about changes and digitisation is an evolving process. Core to DEN’s kingdom is north India, particularly the state of Uttar Pradesh, which poses its own set of issues.

Sharma’s strength lies not just in managing joint venture partners and fighting turf wars. He is a veteran in the cable TV industry and bonds well with the local cable operators (LCOs) as well. In the last week of May, Sharma and DEN’s top JV partners were at Pattaya to holiday.

“Sharma’s presence is particularly strong inside DEN Networks where he has a relationship running with the JV partners,” a cable TV executive said.

After Sharma’s departure in late 2014, Manchanda tapped a senior McKinsey executive Pradeep Parameswaran to steer his company at a time when a large part of his cable network was due for digitisation. The issues of monetisation, billing, packaging and broadband were needed to be handled.

DEN-new-logo-coverDEN’s digitisation drive went unabated, but sore points developed between JV partners and monetisation in digital addressable system (DAS) areas was slow. Being an outsider to the industry, Parameswaran could not resolve many of the issues. The JV partners also set up an association to raise their concerns about future funding, stake dilution, centralised carriage and subscription deals.

“DEN is fenced by strong JV partners, and it is not easy to control operations by an industry outsider,” said a former DEN executive.

Whipped by investors, DEN’s market capitalisation has also shrunk. The market cap had reached a high of 2,908 crore (Rs 29.08 billion) on  25 July 2015. But as on Monday, it stood at Rs 1,602 crore (Rs 16.02 billion).

Manchanda was quick to see which way the wind was blowing. He realised that DEN was facing a leadership challenge and needed a strong person who would steer the ship amid seismic changes. He, thus, removed Parameswaran as CEO of the company and designated him as an advisor.

DEN Factsheet

  • Cable TV universe – 13 mn homes in over 200 cities
  • Digital cable TV subscribers – 9.4 mn
  • Geographical footprint – 13 key states including Delhi, UP, Karnataka,
    Maharashtra, Gujarat, Rajasthan, Haryana, Kerala, WB, Jharkhand and Bihar
  • Strength – Hindi-speaking markets (HSM)
  • Broadband – Service available in parts of Delhi NCR. Has over 95k subscribers
  • DEN Snapdeal TV shop – Ups stake to 82.87%. Biz clocking annualized GMV of Rs 240 cr on current rate
  • Delhi Dynamos FC – Delhi franchise of ISL. Offloaded 55% in soccer biz for Rs 43.32 cr.

Ahead of Sharma’s second innings, DEN Networks upped its stake in Macro Commerce, the TV home shopping JV with Jasper Infotech, the company that owns and operates e-commerce platform Snapdeal. DEN acquired 32.87% from Jasper Infotech to take its total holding in Macro Commerce to 82.87%.

Sharma will take charge of DEN at a time when DAS is going to spread to Phases III and IV. His challenge will be to improve monetisation from the first three phases of DAS. He is also expected to manage the JVs and drive them to collect more subscription revenue from the ground. Broadband expansion is another key area that will need his attention.

In his second innings, Sharma will face plenty of challenges as DEN transitions to a total digital cable TV outfit with a sizeable broadband play. The man who led the MSO’s growth in the earlier years is now being given the task to shape DEN’s future.

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