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Star TV eyes stake in Hathway Cable

Abhijit Basu

Shyam G. Menon

MUMBAI, Sept. 6

STAR TV, till now bereft of an owned cable distribution arm, is believed to be negotiating the acquisition of an equity stake in the cable network of Hathway Cable & Datacom Private Ltd.

``We have not signed any deal so far. But we are working on it,'' a spokesman for Star confirmed, when asked of the development which broke to the surface following reports today in the forex market of the NewsCorp-owned outfit moving an estimated $ 75 m illions into the country.

Market sources close to the deal said that the money was to fund the acquisition of an equity stake in the Hathway network. Official word on the exact nature of the deal or the figures involved, were not available from Star.

Mr. K. Jayaraman, CEO, Hathway Cable & Dotcom, could not be contacted for his version. His office said he was in a meeting.

Hathway is among top three cable networks in the country.

Star officials however agreed when quizzed, that the deal would help correct the existing anomaly of Star not having an owned distribution network, especially given the emergent emphasis on convergence and broadband programming.

The Cable Operators Federation of India (COFI) estimates that India has more than 70,000 cable operators. More importantly, it is considered to be the world's third largest market in terms of cable connections worth approximately Rs. 2,500 crores, a pape r by the Federation of Indian Chambers of Commerce & Industry (FICCI) noted in February last.

In fact, India's cable TV density of 2.5 per cent exceeds its tele-density of 2.3 per cent. So far, Star has distributed its bouquet of channels here through the leading big three cable networks and the plethora of smaller players with which it maintains individual contact.

The strategic value of this pattern of functioning gets questioned when broadband ambitions which lay stress on quality of delivery are factored in. Star has a team working on Internet and broadband, the spokesman said.

Hathway and its competitors in the Multi System Operator (MSO) segment, Siticable (of Zee) and IN CableNet (belonging to the Hindujas), have been investing to upgrade their network to meet broadband needs.

Hathway Cable & Datacom is owned by Mr. Rajan Raheja. His Hathway Investments also owns fully the Kerala-based Asianet Satellite Communication Ltd.

Earlier this year, Zee Telefilms Ltd (ZTL) had first announced and then dropped the acquisition of a 61 per cent equity stake in Asianet Communication Ltd which runs the Malayalam television channel, Asianet.

Explaining the deal's revision to a ``strategic alliance'' on August 2, ZTL had said it was warranted because of Asianet's non-compete agreement with Raheja's cable network. Had the first deal gone ahead, then Zee ``would have had to wind up its existing cable operations in Kerala and not been able to expand its activities in cable networking there,'' an official statement had said.