PT MNC SkyVision, Indonesia's largest pay-TV provider, says it will sell 20 percent of its enlarged shares to the public through an initial public offering (IPO) in June, with MNC Securities and Danareksa as underwriters.

MNC SkyVision's parent company, PT Global Mediacom (BMTR), submitted IPO documents to the Indonesian Stock Exchange (IDX) in March.

The company claims to hold 70 percent of pay-TV market share in the country, with 1.16 million customers as of last year, up 45 percent from 805,000 customers in 2010.

MNC SkyVision executives declined to estimate the proceeds the company expected from the IPO but some analysts have predicted estimates between US$300 to 400 million.

"The pay-TV business still has room to grow given the low market penetration, which stands at around 5 percent, and the robust growth in domestic consumption," MNC SkyVision director Rudy Tanoesoedibjo said.

"This year we aim to get about 2.5 to 2.7 million subscribers," he added.

The sharp increase in subscribers enabled MNC SkyVision to book Rp 1.74 trillion in revenue last year, up 23 percent from the Rp 1.41 trillion in 2010.

The company reported that its earnings before tax, depreciation and amortization (EBITDA) increased 39 percent to Rp 728 billion in 2011 compared to Rp 522 billion in 2010.

However, the firm's net profits plunged more than half to Rp 65 billion, down from Rp 161 billion in 2010.

"The drop in profit was mainly caused by the depreciation of the rupiah to the US dollar, because we issued $165 million bonds with a 5 year tenure in late 2010 for satellite procurement and other capital expenditure," MNC chief financial officer Effendi Budiman said. The new Indostar II satellite, which cost $105 million, helped the firm to migrate from the MPEG-2 to MPEG-4 broadcast format, provides High Definition Television (HDTV), and allowed the company to increase their number of channels to 160 from its existing 110 channels.

"We are the only pay-TV operator in Southeast Asia with a private satellite," Rudy said, adding that customer sales figures per month reached 60,000 in April.

Rudy said that MNC SkyVision would expand its network by adding 22 new branches this year to increase marketing operations, as about 70 percent of its sales came from branches. With an estimated Rp 100 million investment per branch, the company is about to spend a total of Rp 2.2 billion within a year.

According to a research group, Media Partners Asia (MPA), market penetration of pay-TV in 2011 reached 1.8 million households or 5 percent of the total number of households in Indonesia. MPA projected that pay-TV penetration would climb to 3 million subscribers in the next five years.

MNC SkyVision remains a leading player in the business with its two brands placed as the first and the second most highly subscribed pay-TV service. (yps)