Cable TV companies will face rout if they do not capitalize and act swiftly and decisively to counter DTH’s invasion across the country.
The time has arrived for the big multi-system operators (MSOs) to stop adding analogue weight and focus on building a strong base for digitisation and broadband services.
“Cable companies do not have the luxury of time. They are under-invested and have not done their job. If DTH does not kill them, Internet will as watching television on the move picks up. They will have to act swiftly. If I am a cable company, I would be concerned. The investments may be too little and come too late,” warned IDFC Securities MD and research head Nikhil Vora.
Hathway Cable & Datacom managing director and chief executive officer K Jayaraman said the big MSOs had taken the consolidation route for the last few years and now the thrust should be on digitisation.
“The top-tier MSOs have enough market share and do not need consolidation. There will be more stress if they add more analogue homes. When the government is expected to mandate digitisation soon, it does not make sense to acquire last mile operators by paying a premium at this stage,” Jayaraman said, while speaking at the India Digital Pay-TV Summit.
Exponentia Capital principal Neeraj Bhatia agreed that the top MSOs have built enough economic size with a reach of over eight million homes. “Horizontal consolidation does not make sense at this stage as they all have size. Vertical consolidation is the need of the hour as the acquisition of operators will lead to revenue augmentation. For MSOs to attract capital from investors, they will have to demonstrate that they can achieve profitability faster,” he said.