Siticable Reaping Compulsory Digitisation of TV Signals

Siticable, a part of the Essel group, is one of the Big 5 national multi-system operators (MSO) in India, along with HATH, DEN, Digicable, Incable. According to the management, the company has a total subscriber reach of ~10mn with a particularly strong presence in Eastern and Northern India. About 2.5mn of its subscribers are in phase-1 digital addressable system (DAS) cities, and another 3-3.5mn are in phase-2 cities

The Company has already seeded ~1.7mn set-top boxes (STB), a majority of these in FY13, and expects to roll out another 0.5-0.6mn in the phase-1 areas. It has an inventory of 0.65-0.75mn boxes. In terms of key cities, Siticable aims to seed STBs for 1.35mn subscribers in Kolkata and 0.8mn in Delhi. It also has 14 digital head-ends across the country

Management indicated that 70%+ of the local cable operator (LCO)/distributor agreements have been signed. Under the agreement, LCOs receive a third of subscription revenue plus 25% of carriage fee while distributors receive 5% of subscription, 25% of carriage fee and Rs 2 per active subscriber a month.

Siticable mentioned that all broadcaster agreements are in place and DAS packages have been announced. Billing systems and call centres too are ready. Given the management’s experience in running a B2C model for pay TV services (DITV is a promoter group entity, albeit a DTH platform), teething problems during DAS rollout could be minimal