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18 April 2007

India to be top Asia-Pacific pay TV market by 2015
Reuters News
(c) 2007 Reuters Limited.
MUMBAI, April 18 (Reuters) - India is set to become the top pay television market in Asia-Pacific by 2015, but excessive regulation could hamstring growth and commoditise the industry, research firm Media Partners Asia (MPA) said in a report.

Indian pay TV revenue from advertising and subscription grew 17 percent in 2006 to $4.2 billion, and was likely to more than double to $10 billion by 2011 and then rise to $16 billion by 2015, Hong Kong-based MPA said a report. India had 71 million television homes in 2006, of which 61 percent had pay television, MPA said. Penetration was forecast to rise in 2015 to nearly 90 percent of an estimated 185 million television homes.

With those totals, the direct-to-home (DTH) satellite market would grow from about 2.6 million subscribers in 2006 to 38 million by 2015, MPA estimated.

India, currently the world's third-largest pay TV market, has a population of more than 1 billion.

MPA said regulation in India was becoming "intrusive", especially in revenue-sharing deals, retail and wholesale rates, as well as programme exclusivity and distribution.

“This has potentially damaging consequences for pay TV content and distribution, which could become heavily commoditised in the long term,” MPA Executive Director Vivek Couto said.

Profit margins of top broadcasters, including News Corp.'s Star India, Zee Entertainment Enterprises Ltd., Sony Entertainment TV and Sun TV would be under pressure from competition and higher operating costs.

Greater digitisation of distribution would stem piracy and under-declaration of subscriber numbers by cable operators, and also encourage consolidation of operators and distributors. "In the short to medium term, private equity and financial investors could fund cable consolidation, though current valuations for (distributors) are inflated," Couto said.

Potential investors included CVC Asia [CVC.UL], Singapore state investor Temasek [TEM.UL], Carlyle Group [CYL.UL], Macquarie Media Group , ChrysCapital and Providence Equity Partners, the MPA report said.

In the direct-to-home sector, Tata Sky, a joint venture of the Tata group and News Corp., competes with Dish TV and state-owned Prasar Bharti. Sun TV and mobile phone firms Reliance Communications Ltd. and Bharti Airtel Ltd. also plan to launch services.

Malaysia’s Astro All-Asia Networks Plc recently bought 20 percent in Sun Direct TV for $166 million.