Naspers Thai interest in pay TV growth bid
June 15, 2004
By Arijit Ghosh
Johannesburg - United Broadcasting, Thailand`s biggest pay television company that last year posted its first profit, may spend as much as 1 billion baht (R160.7 million) to attract subscribers.
United Broadcasting is one-third owned by Naspers, South Africa`s biggest media company.
The company, which has about 3.2 billion baht in cash, plans to add customers after a net decline last year by following the example of Malaysian pay TV monopoly Astro All Asia Networks, which has more than 1 million customers in a country of 25 million people.
It planned to spend about `a giving a time frame.third` of its cash on such investments, said deputy chief financial officer Vasili Sgourdos.
`Given that we have reached profitability, we have got the cash flow generation. The focus then is to invest that in incremental growth,` said Sgourdos, without
`We can start to follow some of the strategies Astro has executed.`
The Bangkok-based company may cut its installation fee and invest in adding local programming content to increase its 436 193 customer base in a nation of about 63 million people.
United Broadcasting was `not uncomfortable` with analysts` forecasts of 500 million baht profit this year, triple last year`s 131 million baht net income, should it be able to add 20 000 customers and cut costs, he said.
But the firm might not be able to add customers fast enough, said Kowit Pongwinyoo at UOB Kay Hian Securities, adding: `Piracy is the main problem.`
In a bid to win part of the sales from unlicensed cable television operators, the firm last year hired RNT as its sales agent to help legitimise such businesses by providing them with 10 of the company`s own channels.
United expected to earn 72 million baht from the arrangement this year, which would increase to 600 million baht a year in four years, Sgourdos said.
And its profit might be boosted should the government agree to its request to air advertising.
The broadcaster`s shares last month plunged on concern the government may delay approving the company`s request. At least two investment banks raised their recommendation on the stock after the decline.
The stock has fallen 39 percent this year, compared with a 21 percent decline in the benchmark SET index
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