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DishTV Videocon D2H merger gets CCI approval; Competition in DTH

DishTV and Videocon D2H have received approval for their merger from the Competition Commission of India. Separately, shareholders in NASDAQ-listed Videocon D2H also gave the green light for the deal according to this SEC filing.  The merger deal is now pending approval from Indian courts is expected to receive final approval by second half of 2017.

Once combined, DishTV will own a majority of 55% stake, while Videocon will have the remaining 45% in the combined entity, called Dish TV Videocon Limited. Jawahar Goel (current Dish TV MD) will be the Chairman and MD of the company. The entity will have a total subscriber base of more than 28 million, out of which Dish TV contributes a higher base of 15.3 million.

Additionally, the merged entity claims to have a revenue base of Rs 5,915.8 crore and EBITDA margin of Rs 1,826.2 crore as per estimates for the fiscal year ended 31 March 2016. Dish TV currently claims a presence in more than 9,000 towns and Videocon D2H claims presence in more than 7,500 towns in India.

Competition

The DishTV and Videocon merger also come at a time when more telecom companies, who largely focus on cellular services, are now investing more into broadcasting and streaming.

Airtel recently upgraded its DTH boxes with Android TV integration along with streaming packages from Netflix. At that time we pointed out that Airtel DTH will have an upper hand over its competitors since Airtel DTH users now have direct content access to Google Play apps, music, videos, etc.

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Apart from this, TataSky also offers Internet-enabled STBs but without an Android TV support. Jio is also expected to come out with its own set of DTH and IPTV services.

However, both Videocon and DishTV also have been investing into digital as well to keep up with the market. DishTV, which is owned by the Zee group, also owns the Internet-based video streaming platform Ditto TV.  Videocon D2H recently partnered with Hungama Play for app integration into DTH boxes and also has similar tie-ups with Sony LIV and Netflix (also a partner of Airtel and Vodafone).  Note that the deal was signed after Videocon scrapped its IPO plans for a second time in April 2015. Videocon has also partly shut down its consumer telecom business after competitive pressure.

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