Anil Ambani may get out of DTH business

According to media reports and market sources Anil Ambani is likely to sell his Reliance Digital TV DTH operation to Kalanithi Maran of Sun Group for about rupees 2,500 crore. Discussions are supposed to be in the final stage. Reliance Communications (RCOM) operated DTH Services is at present struggling with a debt of around rupees 37,000 crore. The deal, if it happens, will help Ambani reduce some of its debt.

Market experts say that this is the time for mergers and takeover for the DTH companies in India since most of them are in heavy debts due to low ARPUs and high acquisition and operational costs. Even the mandatory digitization of cable TV in a very unrealistic time frame could not shift a large number of cable subscribers of Phase I and II cities to DTH services. The only players who have a better chance of survival are the ones run by broadcast companies like Zee Group’s  Dish TV, News Corp’s Tata Sky and Sun Group’s Sun Direct. Reliance Digital TV currently has about six million subscribers, while Sun Direct, Maran’s DTH company, has 8.5 million DTH subscribers and has a strong base in the southern states of the country since the group owns most of the regional channels.

Anil Ambani seems to have decided to lay more emphasis to his telecom business. During the last two-and-a-half months, Anil Ambani has announced two major deals for leasing infrastructure to elder brother Mukesh Ambani's company Reliance Jio Infocomm (RJI).

On April 2, the two brothers announced a rupee 1,200-crore deal, under which Mukesh’s RJI will use optic fibre cables owned by Anil’s RCOM.

This was followed by a rupee 12,000-crore deal on June 7, under which RJI will use the mobile phone towers of RCOM.

According to the terms of the deal, there is no upfront payment and RJI will make annual payments of rupee 1,000 crore for about 12 years to RCOM. This is likely to help RCOM service its rupee 2,700-crore annual debt payment obligation.

The company is also said to have been in talks with Providence Equity Partners, a US-based leading private equity firm, for selling majority stake in Reliance Globalcom, its international undersea cable subsidiary. It may raise around $1.2 billion by selling about 80% stake in the company.

Source: http://cablequest.org/news/dth-news/item/2595-anil-ambani-may-get-out-of-dth-business.html
Source: http://cablequest.org/news/dth-news/item/2595-anil-ambani-may-get-out-of-dth-business.html