Digital operators are pinning hopes on foreign investments in the medium to long term. This follows the Government’s decision to raise the foreign direct investment (FDI) cap to 74 per cent in broadcasting carriage services, including digital cable companies and the direct-to-home (DTH) segment.
Vivek Couto, Executive Director of consulting firm, Media Partners Asia, said, “At least three out of the five major multi-system operators are expected to partner with foreign players. This could be through raising funds from private equity players and seeking strategic investors, while DTH players could look at initial public offers.”
Couto was talking to the media at the Indian Digital Operators Summit, organised by Indiantelevision.com in collaboration with Media Partners Asia.
However, some industry players believe that foreign investors were not immediately likely to seek investment opportunities and would come in the second or third phase of digitisation.
K Jayaraman, Managing Director & CEO of Hathway Cable and Datacom Limited, said, “I believe it is a medium-term opportunity. Investors are likely to come in after the first phase of digitisation is over.”
S.N Sharma, CEO, DEN Networks said, “The business fundamentals of the cable industry are undergoing a transformation in the digital environment. Once this is done, foreign investors will come.”
He said the earlier the revenue pie was not being shared by all stakeholders. With digitisation bringing in more transparency, the cable industry will attract investments for the future phases of digitisation, he added.
DTH players believe that for FDI to come the Government would also need to rationalise the high taxes and licensing fee being imposed on the industry. Both the cable and DTH industry face problems of low average revenue per users (ARPUs).