IIPM ARTICLE AND PUBLICATION: February 2013

Saturday, February 09, 2013

“Monthly ARPUs in the DTH sector will climb to Rs.220 by 2014”

Vivek Couto, ED, Media Partners Asia talks about the futur drivers & challenges for the DTH sector in India

B&E: How much is the current pay-TV market and where will it be, say, 5 years from now? Vivek Couto (VC): Projections from Media Partners Asia suggest that Indian pay-TV subscribers will grow from 105 million in 2009 to 149 million by 2014, and 173 million by 2020. This means pay-TV penetration will grow from 78% in 2009 to more than 90% over the long term. Total pay-TV subscription revenues will grow at an average annual rate of 14% over the next five years and 10% over the next decade; reaching $8 billion by 2014 and more than $12 billion by 2020. Revenues from HDTV and VAS (including VOD and PVR) will contribute more than $500 million by 2014, rising to $1.5 billion by 2020. B&E: What are the future drivers for the sector in India and how will the cable-DTH tussle play out? VC: The future of pay-TV in India will be driven by media owners and distributors expanding market share with an eye on profits, rather than at the expense of profits. It's a steep curve for them as well but yes, the margins IF YOU GET IT RIGHT, in last mile cable are superior to that of DTH. But the key risk is that DTH will have large captive installed digital base in a quicker time frame than cable. Basically DTH is readying itself for VAS a lot quicker than cable and has it on tap today. The marketing brand is there. For cable it's emerging but not quite there; the human capital is there; the financial muscle is there, but both DTH and cable will feed off each other. DTH is speeding up cable consolidation and producing something of a business model for cable operators to leverage.

B&E: With a number of players hogging the DTH space, do you think consolidation is inevitable?
VC: We suspect the DTH market will consolidate from six to four platforms within 3-5 years, and estimate four will be making money at the EBITDA level by FYE March 2013. There will be consolidation in the DTH segment and players will start making profits after 2013. The extent of ARPU growth in India is over exaggerated with analog cable, price competition and regulation as it exists. So the scope of ARPU growth is limited. VAS, HDTV will provide a boost as well as the impact of up-selling to new tiers. We see monthly ARPUs in the DTH sector climbing from less than Rs.150 in 2009 to Rs.220 by 2014.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Friday, February 08, 2013

A BUREA UCRAT DOCTOR…

That’s what Faisal Shah, the topper of this year’s civil services examinations wants to be. A qualified doctor, he wants to put soothing balm on the wounds of the Kashmiri people, albeit in the garb of a bureaucrat. So he tells Haroon Reshi

Eight years after his father was assassinated by militants, Faisal Shah, 26, has succeeded in transforming his traumatic past into a glittering achievement. His harrowing past experiences could not wane his passion and dedication to attain his objective.

Shah, a government school pass-out from a remote village of the border district of Kupwara, became the first Kashmiri and the third Indian Muslim to have topped the Union Public Service Commission examination in the 63-year history of independent India.

The Kashmir valley erupted in spontaneous celebration as soon as the news of Faisal’s success spread out. Soon, his Srinagar house was teeming with overjoyed relatives and friends. Neighbours and well-wishers made it a point to convey their happiness and best regards to the future IAS officer. Youngsters burst crackers, raised slogans and beat drums outside, though it was raining hard. Kashmiri traditional chefs were brought in to make the wazwan (customary feast) for the guests. That was on May 7.

A cheerful atmosphere still prevails at Faisal’s residence in the Hyderpora area of Srinagar.

“My son has made me proud. It was his father’s dream to make him an IAS officer,” says Mubeena Begum, Faisal’s mother, as she serves Kashmiri kehwa.

Mubeena, a school teacher, is obviously the happiest soul on earth these days. “I am grateful to Allah that He has shown me this day,” she adds, with tears of joy sparkling in her eyes. A total number of 875 candidates (680 men and 195 women) were recommended for Indian Administrative Service (IAS), Indian Foreign Service (IFS), Indian Police Service (IPS) and other central services. Faisal is among the 21 Muslims (including three other Kashmiris) on the list of 875 successful candidates. “I have shattered the myth that Kashmiris cannot crack this prestigious examination,” says Faisal, who will be turning 27 on the 17th of this month.

Although he is willing to be posted anywhere in the country, Faisal largely wants to serve common people in his home state. “I am ready to be posted anywhere in the country but I want to serve Kashmiri people in the capacity of an IAS officer. I know my people have been suffering for the last 20 years. They need officers who will listen to them. I will try to shrink the communication gap between the people and the administration. Here in Kashmir, authorities usually do not listen to common people. Due to this bureaucratic apathy, they are suffering a lot. I will try to change this very tendency.”

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Wednesday, February 06, 2013

how India and Korea can help each other

The Vice Chairman & CEO, Videocon Industries (formerly LG India head), takes a break from company matters and talks to B&E’s Deputy Editor Virat Bahri, on his unique perspectives of how India and Korea can help each other achieve their objectives

B&E: And what does India need to learn, in your view?
KRK: For India to continue on 8-10% growth, India must focus on hard culture – manufacturing. Everyone cannot be intellectual, so more manufacturing focus is needed to create more employment. Also India has to push exports. In Korea, exports helped us move out of poverty. In Korea, our market size was small till about 30 years ago. In India also, though the population size is big, per capita income is very small. So you have to develop the exports and create more employment; then these newly people will buy more products and the domestic market will also grow. Korean companies can help Indian companies in the realm of application technology. If the two countries can benchmark each other, it will be great for the future.

B&E: How can India improve on its manufacturing competitiveness in the global market?
KRK: As per my view, Indian companies have to pay more attention and focus on R&D and quality. Without that, you cannot be successful in the global market. By R&D, I do not mean only high quality R&D or absolutely genius inventions. The global market is so competitive; so cost innovation also comes from R&D – cheaper, better products – what we call application technology can be invented. There are a lot of great technologies. How we can adopt and apply them in our factories is the question. But for R&D and quality, there is no free lunch. It has to be continuous investment. In the last 30 years, Korea, and of course, Japan, have invested continuously in R&D and quality every year – investment has to be in terms of people, money and time. For even if you have people and money, you cannot do it overnight. The Indian government must focus on R&D and quality investment with speciaI tax benefits, support from banks, et al. You have good manpower. I have experienced over the past 12 years. Indian employees are excellent, but continuous investment in R&D is a must. Every year, our mainstream media picks up best entrepreneurs; but I am looking for a best quality/R&D reward being instituted. Entrepreneurship cannot go a long way without R&D and quality. The same goes for agriculture, where India can improve its productivity by over ten times through the right R&D initiatives. Another strong point for India is the language. Most people can speak English fluently; which is a big advantage in global market.

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Tuesday, February 05, 2013

Uneasy lies the head...

More so when it wears the Citi crown! Is Vikram Pandit drowning in a vicious cycle? by Deepak Ranjan Patra

The honeymoon is over now, and 2010 has to be the year whereby you begin showing the world that you are a force to be reckoned with...” (2010; Forbes)

“He got my message very clear that my support has been withdrawn. You can’t go publicly & say our losses are around $3 billion post-tax and then all the sudden add another $11 billion loss.” (2007; Fortune)

T here is a lot these two statements reveal when you take them in the right perspective. Both these statements were made by Prince Alwaleed Bin Talal Al-Saud, Citigroup’s biggest individual shareholder. The difference, besides the years, is that the comments were directed at then Citi-CEO Chuck Prince in 2007; and to Vikram Pandit now. The message is loud and clear – perform or perish. Prince didn’t get it right; and Pandit is tethering close to an encore.

Into his third year as the head of Citigroup, Pandit is now facing stiffening pressure from investors to prove his mettle. More so after his peers at Goldman Sachs and Wells Fargo managed to transform their banks from Wall Street’s problem children to money making machines... and Pandit failed.

Beating industry expectations, both Goldman Sachs and Wells Fargo have posted annual net incomes of $13.39 billion and $12.3 billion respectively. On the other hand, Citigroup has posted a net loss of $1.6 billion. Pandit’s pals may argue that the bank would have returned to profit in the last fiscal had it not faced a $6.2 billion hit on the repayment of bail-out funds. But did Pandit not know, since June 2009, that Citi would have to meet this requirement at year-end?

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