Hathway Cable & Datacom, with its joint venture partners, expects to cumulatively seed 4.5 million set-top boxes (STBs) in at least 25 cities in the second phase of the government’s digitisation programme. For this, it would need about Rs 300 crore. Hathway might not resort to equity financing; it prefers debt and vendor financing.
“We have already installed 1.4 million boxes in the cities under the second phase, and we expect to seed 3.5 million additional boxes,” G Subramaniam, chief financial officer at Hathway, told Business Standard. He added as of September-end, Hathway’s consolidated net debt was Rs 465 crore, including Rs 100 crore of vendor credit and Rs 60 crore of cash on its books.
The multi-system operator is present in 25 of the 38 cities in which analogue cable signals would cease, and the switchover to digital addressable systems is mandated by March 31, 2013.
Hathway expects to deploy about two million STBs in the first phase of digitisation. “We have already deployed 1.9 million boxes in the three metros in which we are present. We are expecting the number to go up to 2-2.2 million. But the actual monetisation would start in the next four months. Similarly, the full impact of the second phase on Hathway’s revenues would be evident in second and third quarters of 2013-14,” Subramaniam said.
The company believes the second phase would be less challenging than the first, as now, consumers know the government is firm on the deadline.
“For any cable TV services provider to be successful, it is very important to be able to provide additional services to consumers. We offer up to 20 HD channels. We are already a mature broadband services provider, with 1.4 million homes passed by our broadband infrastructure. We have rock solid back-end infrastructure. We were the first to finalise contracts with all broadcasters and roll out the pack details. So, in a way, we matched all the criteria in Trai (Telecom Regulatory Authority of India)’s guidelines,” Subramaniam said.
He, however, added the final milestone in digitisation was finalising an agreement with local cable operators (LCOs). “LCOs were habituated to a certain kind of business model and a transition from this, along with signing agreements, isn’t that easy. We are progressing in concluding satisfactory contracts with our LCO partners,” he added.
Today, Hathway shares closed at Rs 270.05, up 1.48 per cent on the BSE.