In a latest attempt to cut its US$6.8bn debt load, Indian telecoms giant Reliance Communications (RCom) is reportedly in talks to sell its DTH business, Reliance Digital TV, for approximately Rs20bn (US$366m). The buyer has been named, by local reports,…
In a latest attempt to cut its US$6.8bn debt load, Indian telecoms giant Reliance Communications (RCom) is reportedly in talks to sell its DTH business, Reliance Digital TV, for approximately Rs20bn (US$366m).
The buyer has been named, by local reports, as the Sun Group, an Indian media conglomerate. RCom and the Sun Group could not be reached for comment before the press deadline.
Sun Group already controls DTH operator Sun Direct and if this deal were to take place it would mark the beginning of an much-anticipated period of consolidation in the saturated Indian satellite pay-TV market.
RCom’s decision to exit the challenging DTH sector will allow the telco to focus on its core assets and echoes similar moves by other companies recently.
Last month, it was reported that telco group Bharti Airtel was looking to sell a quarter of its DTH satellite TV business and was in talks with potential buyers, including cablecos Comcast and Liberty Global, as well as private equity firms KKR, Providence, Bain Capital and GAAP.
A media analyst at an Indian brokerage told SatelliteFinance that he expected Bharti to be able to get a valuation of US$1bn for Airtel Digital TV and raise US$200m-US$250m from the 26% stake sale.
Meanwhile, industrial conglomerate Videocon Industries is planning to launch the IPO of its pay-TV platform this month, its chairman Venugopal Dhoot was quoted as saying.
With six DTH operators – Videocon D2H, Dish TV, Tata Sky, Sun Direct, Airtel Digital TV, and Reliance Digital TV – calls for consolidation have intensified over the last few months. However, the market remains attractive for investors.
Rohan Dhamija, head of India and South Asia at Analysys Mason, expects cash-intensive DTH platforms to become particularly profitable in the future as the number of subscribers grows further.
Already, the satellite broadcasting sector in the country has seen the number of DTH subscribers expand rapidly in recent years, jumping from 25 million in 2010 to 48.1 million in June 2012, as India’s mobile population gain increasing spending power.
