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Post the decision to recast its media business, Hinduja Ventures is in talks with other multi-system operators to expand its managed services vertical by leveraging its Headend in the Sky (HITS) infrastructure.
Last month, the company said it will become an operating media corporation by merging into itself the digital cable, HITS and broadband businesses which are at present housed in its subsidiary, IndusInd Media and Communications Ltd (IMCL).
Vynsley Fernandes, Chief Executive Officer, IMCL, told BusinessLine : “There are several small- and medium-sized MSOs (multi-system operators) in the country today, with 10,000 to about 1 lakh cable subscribers. Their costs of operations are very high or they do not have enough capital to invest for future growth. So there is a huge potential for such MSOs and even small local cable operators to ride on our HITS infrastructure to service their customers while continuing to own their business.”
Under the managed services model, MSOs can continue to run their business independently, while using the company’s HITS infrastructure to beam video signals to their subscribers. IMCL also handles their subscriber management systems and other back-end related infrastructure. Such MSOs either pay a fixed fee on every subscriber or have a revenue-share arrangement with IMCL.
“We are in talks with both large and small MSO players to expand our managed services business,” he added.
Currently, IMCL has 5.1 million subscribers, and nearly half a million of these customers were added through the managed services model. It aims to expand to 10 million subscribers in the next couple of years. “We are going to remain a boutique firm. We are not in the volume game, but want to focus on providing value to our consumers through a wide range of services. We believe that a significant portion of the target to have 10 million subscribers will be added through our managed services model,” Fernandes added.
The company is also exploring possibilities of strategic alliance and partnerships with other companies for distribution. “We are in talks with a host of companies from various sectors such as consumer goods, FMCG and e-commerce players for strategic alliances to help them get penetration in smaller towns and cities. They can push customised consumer offerings either through our network of MSOs and local cable operators or through integrating with our customer app.”
Hinduja Ventures, on a consolidated basis, expects to clock double-digit growth in FY2020. Talking about revenue growth and plans for this fiscal year, Fernandes said: “In the first quarter of FY2020, IMCL became PAT positive, besides being EBIDTA positive, through a slew of initiatives coupled with the stimuli of the new regulatory framework. The focus will be on realising the strength of the combined entity and leveraging synergies and integration in terms of capex, subscriber management systems and the back-end.”
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