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January 2018


BUSINESS NEWS


AIRTEL DTH VALUE 11,204 CRORE

Warburg Pincus will acquire 20% stake in Bharti Airtel's DTH arm - Bharti Telemedia, for $350 million.

Of this, 15% will be bought from Bharti Airtel and the balance 5% from another Bharti entity. This will reduce Airtel's stake in Bharti Telemedia to 80%.

As part of the transaction, Warburg Pincus India MD Viraj Sawhney will join the board of Bharti Telemedia.

The $350 million price paid for Airtel Digital TV (DTH), which has approximately 14 million subscribers, amounts to a staggering valuation of $1.75 billion or ₹ 11,204 crore!

Warburg Pincus received excellent returns from the $ 300 million it invested in Airtel, and got $ 1800 million in return within 5 to 6 years. As a result, maybe Pincus has paid a higher than market price for the DTH stake.


DISH TV: FROM PROFIT TO LOSS

Dish TV's Q-2 revenues h a v e d e c l i n e d 3.9% to ₹ 748.6 crore, against ₹ 779.3 crore last year, mainly due to a 3.3% slide in subscription revenue to ₹ 704.9 crore from ₹ 728.8 crore in the year-ago period.

DishTV's other income also fell 18.7% to ₹ 7.7 crore on a yearon- year basis.

Loss before tax sky-rocketed to ₹ 27.2 crore, compared to a profit of ₹ 57.3 crore in the same quarter last year.

The DTH operator added 188,000 subscribers on a net basis during the quarter (0.8% churn), taking its total subscriber base to 15.9 million. Its Q-2 ARPU was ₹ 149.


SUN TV PUSHES FOR RELIANCE DTH BANKRUPTCY

Broadcaster Sun TV Network has filed an i n s o l v e n c y petition against DTH operator Reliance Big TV in the National Company Law Tribunal (NCLT), Mumbai. Sun TV has taken this extreme step as it feels that no resolution was coming out in the TDSAT.

Anil Ambani's Reliance DTH owes Sun TV approximately ₹ 30 Crores, Star India ₹ 22 crore, IndiaCast Media ₹ 14.62 crore & Discovery ₹ 7.5 crore. W h i l e Veecon & P a n t e l have said they will buy Reliance DTH and continue operations, debtors have not been paid yet.

The bankruptcy petition precipitates the situation, forcing the DTH platform to pay up or shut down. On declaration of bankruptcy, the company's remaining assets will be sold, and the proceeds given to debtors as part payment.

It remains to be seen if Veecon & Pantel will pay Reliance DTH's debts and continue operations.

The NCLT will hear the arguments from 16 January.




STAR INDIA: $1 BILLION IN 2020

21st Century Fox Executive Chairman Lachlan Murdoch has praised Star India's operations. "We see o u r business in India not only as important as the US but frankly more important in many ways. Star TV in India is well-rounded media business. It is a media company that provides 17,000 hours of local content," he said.

"We'll make $500 million this year in EBIDTA out of Star, growing to $1 billion in EBITDA by the calendar year 2020. So there's huge growth business for us around the world," he added.

"All media companies are going to be direct-to-consumer. So whether it's in the next few months - and we'll see more launches in the next few months - and over the next couple years, every single media company will have direct-to-consumer products. And, ultimately, everything will be available direct-to-consumer," he stated.


VIDEOCON D2H TO DELIST FROM NASDAQ

As part of its amalgamation with Dish TV, DTH company Videocon d2h will voluntarily delist its American Depositary Shares (ADS) from Nasdaq & deregister with the U.S. Securities and Exchange Commission (SEC), by 3 January 2018.

The I&B ministry has approved the DishTV - Videocon d2h merger in December 2017, despite the TRAI's recommendations against such mergers, which create platforms with more than 30% market share. All outstanding equity shares of Videocon d2h, including equity shares underlying the ADSs, will be mandatorily exchanged for new equity shares of Dish TV.

Dish TV will be subsequently renamed Dish TV Videocon. Videocon d2h ADS holders will receive new Global Depositary Receipts (GDR), each GDR representing one equity share of Dish TV, exchanged at a rate of approximately 8.07331699 new GDRs for every one Videocon d2h ADS, unless such holders elect to receive equity shares of Dish TV in lieu of their ADS.



STAR SPORTS CEO

Star India has appointed Gautam Thakar as the CEO of Star Sports. Thakar fills in the 9 month vacancy created when Nitin Kukreja, quit the post in March.

The Star Sports network has 12 channels.

Star India has bet big on its Sports channels, bidding ₹ 16,000 Crores for the 5 year IPL contract. Thakar has a hard task ahead.


ORTEL'S BROADBAND PLUMMETS 50%

Ortel Communications said it had 65,262 broadband subscribers, quarter ended June, 2017 (Q1 FY18), down 17.6% from 79,182 from Q-1 last year.

B r o a d b a n d Revenue at ₹ 5.1 crores was down 49.3% year on year from ₹ 10 crores. Broadband Gross Margin fell to 51% from 74% last year. Broadband ARPU was ₹ 223 (₹ 401 last year).

Ortel's Cable TV base however, increased to 766,480 subscribers from 747,528 last quarter.

Bibhu Prasad Rath, CEO of Ortel Communications said in a statement that the performance was impacted by "severe competition in our core market, collections shortfalls, repayment of debt as well as integration issues among others."

Ortel offers broadband & cable TV in Odisha, West Bengal, Andhra Pradesh, T e l a n g a n a , Chhattisgarh and Madhya Pradesh, with a presence in 78 towns. 61% of its subscribers are in Odisha.


ORTEL TO SPIN OFF B'BAND

Ortel Communications board has approved to separate its broadband business to a wholly owned subsidiary Ortel Broadband.

The purpose is focus on the broadband business with a separate management team. At a future date Ortel Broadband could separate the broadband company completely, yielding better monetisation for all its shareholders, as the Cable TV business is not as profitable as broadband.

B r o a d b a n d users accounted for 8% of Ortel's total subscribers, and contributed 12% of Ortel's revenues.

Its broadband revenues have also been under pressure. For the quarter ended 30 September, Ortel's broadband revenue had fallen 17.1% to ₹ 5.1 crore as against ₹ 6.1 crore in the trailing quarter. Subscription fee was down 18% to ₹ 4.7 crore. Broadband bandwidth cost remained flat at ₹ 2.5 crore.

To counter declining business, Ortel has launched low cost unlimited broadband plans starting at just ₹ 99 per month. n