Philippines' DTH market straightened by cable, equipment subsidies
DetailsRebecca Hawkes | 07 July 2015
Filipino pay-TV operators will continue to lose money in the next few years, especially in the face of SkyCable's planned direct-to-home (DTH) service, an industry player has told the National Telecommunications Commission.
Philippine Multi-Media System Inc (PMSI), which owns DTH operator DreamTV, says the subscription television industry is already stifled due in part to the quantity of competing cable systems and the subsidies of between PHP1,000 (US$22.19) and P3,000 ($66.57) borne by DTH satellite operators for subscriber hardware to encourage service uptake.
The island nation has an estimated 1.5 million cable TV subscribers and 100,000 DTH subscribers, according to a Cable & Satellite Broadcasting Association of Asia (CASBAA) report dated 2010.
SkyCable, owned by media conglomerate ABS-CBN, is currently the dominant player in the cable market, and hopes to become a major force in the DTH sector to if it is allowed to launch its proposed service in 251 cities and municipalities across the Philippines.
Cignal TV is the current DTH market leader in the country, followed by PMSI's DreamTV and GSat – owned by Global Broadcasting and Multi-Media Inc.
However, even the successful Cignal TV, which has been operational since 2009, is not expected to break even for another one or two years – and only then if it can reach up to a million subscribers, according to a report in the Manila Times.
"Despite the significant improvements of Cignal's annual losses from P1.8 billion in 2012 to P427 million in 2013, it is yet difficult to foresee a financial recovery of its more than P4 billion investment in the near term, given the declining price preference of the subscribing public while maintaining a high cost of acquisition and after-sales support and maintenance," PMSI is reported as saying.
PMSI's DreamTV accumulated net losses of P1.1 billion between 2009 and 2013, thanks mainly to slow subscriber growth and declining average revenue per user, according to the newspaper.
Based on its projected income statements, SkyCable will start to generate net income in the fifth year of its proposed DTH service, said PMSI.