MANILA, Philippines - Lopez-owned cable television operator SkyCable has earmarked around P1 billion this year for capital expenditure, around P200 million of which will be spent for its shift from analog to digital transmission.
Company officials told The STAR that around P400 million has already been invested for the whole digitization process, which was resorted to by the country’s biggest cable television (CATV) firm to minimize, if not totally put a stop, cable signal piracy.
They noted that with the digital box deployment, illegal connections on the SkyCable network have come down significantly, and will continue to do so over time.
“We are hoping that the rest of the industry follows our lead so that this doesn’t create a situation where those who were pirating from our network simply transfer to the analog/unencrypted networks of our competitors. This is not good for legitimate consumers whose signals are affected by illegal tapping, for our content providers who can only grow together with the industry, and the industry in general whose growth is partly dependent on getting illegal consumers to pay,” an official pointed out.
Earlier, The STAR reported that SkyCable is aiming to convert about 80 percent of its one million subscribers to digital by yearend via the installation of set-top boxes for every television set connected to CATV.
Officials revealed that they are now 65 percent digital and that for existing customers, the installation of the set-top box is free.
They explained that the box itself has many added features, including additional free channels (History, Bio, Fox Crime, FX, BTV, CNBC), an electronic program guide with schedules or program summaries for up to two weeks, and parental lock, among others.
“Getting a box also allows the customer to choose and pay only for the channels they want. This allows them to control how much they want to spend per month assuming they don’t need all the channels in our current channel line-up,” one official pointed out.
The official noted that SkyCable does not view the box deployment as a way of generating additional revenues from the existing subscriber base. “In fact, because of the box, subscribers can actually lower their monthly spending by choosing to pay only for the channels they watch. However, the biggest benefit of the box over time is the protection of our content from illegal connections. By preventing signal theft, hopefully, this allows the industry to again see another wave of subscriber growth,” he said.
But observers noted that the shift from analog to digital can also generate additional revenues for the company. Right now, there are many subscribers who pay for only one cable TV subscription and hook up other televisions inside their homes.
When a particular subscriber is converted to digital, they can only receive signals via the set-top box, which has channels programmed in them. The subscriber then has to pay additional if he wants other televisions inside his home/office to similar receive signals by paying for the boxes.
Aside from shifting to digital, SkyCable has also been offered prepaid subscription, although officials said they still do not have a significant number of prepaid subscribers.
“What we’ve discovered is that most of our subscribers actually prefer postpaid because it offers uninterrupted viewing, as opposed to prepaid which is interrupted every time the load is consumed. We recently launched a P280 postpaid product, which over the past few months, has grown to about 30,000 subscribers. And faster broadband for the home will be coming soon,” he said.
SkyCable is also performing well in the area of cable Internet. “But while demand is strong, our biggest problem from a broadband perspective is limited coverage throughout Metro Manila. We intend to continue focusing on high-end homes, and will continue providing residential offerings that are faster than our current 12mbps flagship package,” he added.
The company is expanding its broadband coverage and is coming out with cable TV products that are more affordable to the general public. Starting with a P280 product, it recently offered a P499 product.
SkyCable is also looking at other new sources of revenue stream. For cable, the company is still looking for a video-on-demand (VOD) set-top box that will be affordable to the general public.
At present, SkyCable is offering a VOD service online for free, to all SkyBroadband customers. Called iwantv, it allows SkyCable broadband subscribers to watch ABS-CBN content on an on-demand basis.
Meanwhile, the Lopez group has started bundling its cable TV subscription and broadband (via SkyCable) and phone service (through Bayan Telecommunications). “We only launched this three weeks ago, and it’s still in test phase.
We are trying to understand if the product creates better value for the consumer,” an official said.
Another product recently launched by SkyCable are high-definition (HD) channels. “We have about eight channels on HD including three more which are launching this month (Star Movies, National Geographic, and Fox). We will continue adding HD channels as they become available in the region. It’s still a small number that subscribe as the HD box is quite expensive but we expect take-up to improve as the box costs come down over time, and as more HD content becomes available in SE Asia,” he added.
The official also pointed out that SkyCable is performing well financially, and continues to meet its debt obligations, a portion of which has been restructured. The company still has around P1.5 billion in bank loans.
During the first quarter of 2010, SkyCable, which has been consolidated into ABS-CBN Broadcasting Corp., posted a 14 percent growth in consolidated revenues, driven by higher revenue contribution from broadband services and other revenues.
Source: Philippine StarThe company logged in a 76 percent year-on-year increase in broadband subscriptions and an 11 percent increase in prepaid cable service subscriptions. - Mary Ann Ll. Reyes, dated 8 August 2010, 12:00 AM