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Hinduja Ventures merges its HITS and IMCL businesses

The company intends to integrate the backend of its GIL HITS business arm with its cable business IMCL. Both companies will have separate identities but will be a part of the group. Tony D’silva, MD and CEO, IMCL will continue to lead after the merger

Archit Ambekar | Mumbai | September 26, 2016

Hinduja-VenturesHinduja Ventures has applied to the Bombay High Court and has informed the Ministry of Information and Broadcasting (MIB) about the merger between Grant Investrade (GIL), the wholly owned subsidiary of the company, and IndusInd Media and Communications (IMCL), a subsidiary of the company. As per the deal, GIL will de-merge its Headend-in-the-sky (HITS) business and merge it with IMCL.

While the group had announced the merger agreement a few months back, the final announcement of approaching the BSE was made after the Annual General Meeting (AGM) on September 22. The arrangement will result in consolidation of the cable business in one entity, thereby strengthening the position of IMCL.

Tony D’silva, MD and CEO, IMCL and Ashok Mansukhani, Director, Hinduja Ventures shared its views about the various benefits of its Cable Operators Premises Equipment (COPE), pain points that they are facing as a distributor, how policies are in favour of the broadcasters and what is the future of the distribution business in India.

Speaking about the current scenario, D’silva mentioned how the broadcasting policies are more in favour of broadcasters. The multi-system operators (MSOs), local cable operators (LCOs) and HITS businesses are the ones that are affected by the current policies. Digitisation with the help of direct-to-home (DTH) players is badly affecting the smaller players in the market.

He further added, “It is unfair that a channel or piece of content that is available to urban area is not available to rural India. With each broadcaster having a free-to-air (FTA) channel for the rural audience, broadcasters are making monies through advertising. In a country that supports the advertising-based model and not the subscription-based model, it is difficult for small players to survive, especially with the kind of prices broadcasters are charging for rural markets.”

D’silva said someone in rural India will not pay Rs 50 for a bouquet of four to five channels. He will rather opt out of that. Mansukhani added, “Similarly, even in a metropolitan city, no one will pay more than Rs 400 for a DTH connection. The average spends are about Rs 200-250 per household and that kind of expenditure pinches many pockets in the country.”

The Cable Operators Premises Equipment (COPE) that Hinduja’s HITS network Nxt Digital is using not only reduce its cost but will also help operators digitise. The group is also in the process of introducing eco-COPE, which is available for Rs 4 lakh.

While there is substantial investment in this, a possible solution is to form a co-operative of cable operators and get COPE. The equipment will be placed in one position and does not need a fibre-optic network. While pain points remain, the company has already worked on a solution to the problem.

As Phase 4 approaches, the group intends to add about three million subscribers; most of them will primarily be from Phase III. Like D’silva mentioned earlier, the group is only a service provider and is supporting the operators to digitise.

Asked about the final date of the next phase of digitisation, Mansukhani pointed out that it is still not clear. Currently, only 35 million homes from Phase I and II have been digitised and he feels that the process will be smoother if only it is done state-wise. Concluding, Mansukhani said that if digitisation is done by this year end, then it will be beneficial for the distributors.

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