Asianet Satellite demerges cable TV biz into subsidiary co
MUMBAI: Multi system operator (MSO) Asianet Satellite Communications has transferred its cable TV business into a new subsidiary company called Asianet Digital Network. The demerger has become effective from 1 March 2018.
Incorporated in 2015, Asianet Digital Network was earlier known as Asianet Digital Cable. Subsequently, the company underwent a name change to Asianet Digital Network from 9 January 2018.
The company had procured the digital addressable system (DAS) licence on 10 March 2017.
The company’s broadband business is housed under Asianet Broadband. Thus, the cable TV and broadband business are run under wholly owned subsidiaries.
Asianet is the biggest MSO in Kerala. Over time, it has expanded to neighbouring states like Karnataka, Andhra Pradesh, and Telangana. The company’s broadband business is also very profitable. It also has an over the top (OTT) platform Asianet Mobile TV Plus.
Asianet is currently embroiled in a dispute with Star India over the renewal of content deal. The previous deal expired on 31 March. The company wants the new deal to be at par with competitor Kerala Communicators Cable Ltd (KCCL).
Star and Asianet had filed petitions in Telecom Disputes Settlement and Appellate Tribunal (TDSAT) over the renewal of content deal.
Recently, the MSO had filed an application before the tribunal to implead Asianet Digital Network as a party respondent no. 2 in the present petition due to the demerger of the business.
There is no serious contest to the facts disclosed by the applicant. Accordingly, the prayer for adding applicant as a respondent no. 2 is allowed.
As reported earlier by TelevisionPost.com, the parent has planned a capital expenditure (Capex) of Rs 200 crore in the broadband business over FY18 and FY19. The company is providing broadband service through GPON fiber-to-the-home (FTTH) technology.
Being a dominant player in Kerala, the company is also strategically positioned to cross-sell its broadband services to existing primary cable services subscribers.
ASCL’s cable TV subscriber base stands at 1.36 million. Over 50% of its total cable TV subscribers are secondary subscribers.
The company posted an EBITDA of Rs 81.7 crore during April-October 2017 while the EBITDA margin stood 27%. It company booked revenue of Rs 305.48 crore for the period.
In FY17, the company’s net profit jumped to Rs 53.6 crore from Rs 40.2 crore. During the period, EBITDA was Rs 145.7 crore compared to Rs 138.2 crore in the previous. EBITDA margin declined at 32% versus 34.2% due to lower activation income and higher employee costs.
The revenue increased 10% YoY to Rs 446.2 crore from Rs 404.6 crore, driven by a 17% YoY and a 31% YoY rise in cable subscription and broadband income levels, respectively.
The rise in EBITDA led to an increase in cash flow from operations to Rs 140.3 crore in FY17 from Rs 121 crore in FY16. ASCL’s fund-based working capital limit utilisation was 95% during January-October 2017.