Spurred by the telecom regulator’s recommendation to raise the ceiling for foreign investments in organised cable segment Den Networks, a leading multi-system operator (MSO), is looking at investing over Rs 200 crore to digitalise at least 30 per cent of its subscriber base over the next two years.
M G Azhar, its president strategy and business development, said: “We intend to reach out to at least six million digitalised households by 2012. We are investing around Rs 200 crore to procure set top boxes (STBs) and upgrade head-ends in our network.”
On Wedenesday, in its recommendations on foreign investment limits in broadcast carriage services, the Telecom Regulatory Authority of India suggested the FDI ceiling be raised to 74 per cent from the present 49 per cent for all MSOs upgrading their networks towards digitalisation with addressability. This, TRAI said, would promote investments in the organised cable segment and hasten digitalisation of the market.
“If the recommendations of the regulator are endorsed by the ministry, we may digitise 40-50 per cent of our network in 18-24 months,” added Azhar. Den Networks has a subscriber base of 10 million which it aims to double by the end of next year. It is looking at expanding its footprint in the 10 states it operates in, as well as foraying into new markets over the next year.
With the advent of DTH (direct to home) companies, which deliver enhanced quality digital television content to consumers, consolidation has picked up in the cable and satellite industry. Local cable operators (LCOs), who lack resources to upgrade their network from the analog to the digital mode, are increasingly tying up with MSOs to survive in the competitive environment. Den Networks has tied-up with nearly 70 LCOs and is considering strategic alliances in Uttar Pradesh, Delhi, Rajasthan, Kerala and Madhya Pradesh.
The company reported a net profit of Rs 30 crore for the first time last year. It recorded consolidated revenues of Rs 919 crore, an increase of 28 per cent over the Rs 716 crore it made in 2008-09.
