Pantel and Veetel Media will acquire the entire shareholding of Reliance BIG TV on an 'as-is, where-is' basis, says Reliance Communications in a statement
New Delhi: Anil Ambani-led Reliance Communications (RCom) on Tuesday said that it will sell its direct-to-home (DTH) subsidiary Reliance BIG TV Ltd to Pantel Technologies Pvt. Ltd and Veecon Media and Television Ltd.
Pantel Technologies is an information technology and communication devices company with operations in India, South-east Asia, Gulf Cooperation Council and Africa. Veecon Media and Television Ltd is a New-Delhi based company with interests in production, distribution and sale of television content.
According to a statement by the company, Reliance Communications has entered into a binding share purchase agreement with the companies, which will acquire the entire shareholding of Reliance BIG TV with business on an “as-is, where-is" basis. The company said the deal has ensured uninterrupted services to its 1.2 million subscribers and continuity of employment for about 500 employees of Reliance BIG TV.
“The transaction will help reduce the liability of unsecured creditors, benefitting all stakeholders, including lenders and shareholders of RCom. The transaction is in consonance with RCom’s stated objective to focus on B2B businesses of the new RCom," the company said in the statement.
Apart from RCom, there are five other private DTH companies —Zee group-owned Dish TV India Ltd, Tata Sky Ltd, Videocon d2h Ltd, Sun Direct TV Pvt. Ltd and Bharti Telemedia Ltd. In addition, state broadcaster Doordarshan also runs a DTH platform for free-to-air channels called DD Free Dish.
Reliance is the smallest DTH company with a market share of 2% in the 65.31 million DTH subscriber market (as of June 2017), according to a report released by the Telecom Regulatory Authority of India (Trai). The company, which started in 2008, is currently working on renewing its DTH licence.
Earlier this month, Reliance Communications had signed a memorandum of understanding (MoU) with Veecon Media to sell its DTH business. Prior to that, the company had also issued a notice to shut down the business altogether.
RCom’s move comes a year after the initiation of a consolidation process in the DTH industry with Dish TV announcing the merger of its business with Videocon d2h in November 2016.
The new company, in which Dish TV will own 55% stake and Videocon 45%, will be called Dish TV Videocon Ltd. The merger is pending approval before the information and broadcasting ministry.
Experts believe that consolidation in the DTH market is inevitable. “The DTH market is at most a three-four player market. Having said that, the consolidation and sale of assets is a combination of market share consolidation and difficulties in funding the growth capital needed to sustain the businesses in the long run. Overall, DTH has a positive outlook in the long run and there is a merit in consolidation in terms of synergy of resources," said Girish Menon, partner, media and entertainment at consulting firm KPMG.
According to a 2013 report on the Indian DTH market by Hong Kong-based research firm Media Partners Asia, revenues are expected to touch $3.9 billion in 2017 and $5.3 billion by 2020, up from $1.5 billion in 2012.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
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