Astro ready to face all comers
Tags: Astro All Asia Networks plc | Henry Tan | IPTV | Telekom(M) Bhd | YTL Communications Sdn Bhd
Written by Nadia S Hassan
Monday, 22 November 2010 14:39
KUALA LUMPUR: Malaysia’s pay-TV market is set to heat up with YTL Communications Sdn Bhd’s announcement that it is planning to launch a hybrid TV service by the end of next year. This comes on the heels of Telekom (M) Bhd’s high-speed broadband service UniFi, which also offers Internet protocol TV (IPTV) along with the connection.
However, according to Astro All Asia Networks plc’s chief operating officer Henry Tan, the current market leader welcomes competition.
“As long as it works to bring up the industry rather than drag it down,” he said in an interview. He added that Astro, which was delisted in June this year, is not resting on its laurels and is looking to improve the entertainment experience of its three million strong customer base.
Although the trend is pointing towards users having more control over what they choose to watch as touted by YTL Communications, Tan explained that the bundling of content rather than providing it ala carte would continue.
“While content providers understand that the market is changing, bundling content is still the mainstay, and is more economically feasible,” said Tan, who added that those in the region providing their content ala carte were finding it hard to keep their heads above water.
However, Tan explained that Astro still has more plans for its Astro B.yond service, one of which will include the provision of IPTV.
“There are four phases that we are hoping to roll out with the new B.yond box. The first that we have done is HD (high definition), followed by a (personal video recorder).
“The next phase is to roll out VOD (video on demand), which should happen fairly soon. Then finally the fourth phase is IPTV. In fact, the new box is IPTV-ready and we are ready on the back-end side, however we are still working out the details,” said Tan.
So far, Astro has invested some RM5 billion in its end-to-end infrastructure since its start-up. According to Tan, Astro’s Ebitda (earnings before interest, tax, depreciation and amortisation) margin is around 30%, which includes the contribution from the new B.yond box.
According to analyst reports, Astro’s dominance in the pay-TV market despite the presence of other players such as REDtone International Bhd’s DETV and Fine TV, is due to its wide range of channels and exclusive agreements with such core content providers such as HBO and AXN.
However, Tan baulks at being called a monopoly, pointing out that nine other licences have been given out.
“We are not the only player that bids for content. We cannot be faulted for being successful,” he said.
In addition, Tan is quick to point out that when it comes to content, it is the sellers that ultimately hold the upper hand rather than the buyers.
“There is no one-size-fits-all, even in an exclusive contract,” explained Tan, adding that there was a lot of content available globally. IPTV provider DETV for example, which is a joint venture between REDtone and Zhong Nan Enterprise (M) Bhd, is China-centric.
Then there is YTL Communications, which inked a licence and service agreement with US-based Sezmi Corp to deploy hybrid TV services in both Malaysia and the Asia Pacific.
Currently, the main issue that is plaguing the industry, and the main barrier to entry, is the increasingly high price of content. In fact, Tan said that the price is not expected to come down any time soon.
Tan said Astro would continue to concentrate on rolling out more HD channels on its new box.
“So far we have rolled out 12 permanent channels and one event channel on HD at a pretty fast clip, and we will keep adding channels every month,” said Tan.
He emphasised that for the rollout of HD, it was a matter of timing in line with the maturing of the entire chain, as the hardware was more affordable.
“It is always expensive to be ahead of the curve, but we believe this is the right time. One day, HD will be the norm,” he said.
Tan added that Astro is on track to getting half a million users to migrate to its B.yond box by the first quarter of next year.
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