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DEN To Invest Rs 1000 Crore For Cable Network Digitization; What To Expect

Digital Entertainment Networks (DEN), a cable service providers has announced its plans to invest Rs 1,000 crore over a period of three to four years for rolling out digital cable networks in India, reports LiveMint. The company intends to spend in a phased manner with Rs 400 crore accounting for the first phase of digitization.

Now this no surprise – the announcement comes shortly after the Indian government had ordered the phasing out analogue cable networks and make digitization of cable networks mandatory by 2014. The digitization process is likely to be completed in the four metropolitan cities by March 2012. More on that in The Hindu.

What to expect (by Nikhil Pahwa)

– More digitization announcements: MSOs will probably now look to also digitize their networks, so you should expect more such announcements from cable companies in India. Digitization is not ubiquitous, and the cable operator business is rather fragmented, and into neighborhood monopolies.

– Consolidation: Not every cable operator will be in a position to afford digitization, so expect many to join forces or be acquired by larger networks. According to the report, DEN is already in talks with various local cable operators (LCO) and multiple system operators (MSO) for consolidation.

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Meanwhile, Hathway Cable & Datacom also intends (according to the Wall Street Journal) to roll out its cable digitization with an initial investment of Rs 800 million. The first phase of digitization will include New Delhi, Mumbai and Kolkata.

– Fund Raising: digitization is going to cost money, as will consolidation. Expect more private equity funding and this once murky segment of media and entertainment looks to clean up its act and raise capital.

– ISPs and Cable Operators to join forces: many cable operators already act as ISPs or agents of ISPs, and perhaps there is room for the aggregation to be extended beyond just cable operators to ISPs, to account for the changes in policy, keeping in mind that the new telecom policy (currently in draft) is pushing for a one-India-one license policy.

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