Astro’s Indo involvement ends

A deal for Indonesia’s PT Direct Vision to use the Astro All Asia Networks pay-TV brand will not be renewed although Astro is reportedly allowing a “grace” period for PTDV to make other arrangements.

The licensing agreement, under which Astro also supplied content as well as its brand, ended on Monday, September 1. With talks aimed at Astro taking a 20% stake in the business inconclusive, it seems that Astro’s deep involvement in PTDV, backed by the Lippo Group, has ended.

Astro was losing money in Indonesia, supplying cash as well as services to the platform. A report in local daily The Star said that Astro was still “keen” on being involved in Indonesia, and quoted an Astro official saying that discussions with the Lippo Group were still “ongoing”.

But Astro has lost large sums in Indonesia over the last couple of years and shareholders are unlikely to want the same arrangements continue. In the company’s last financial year (to end-Jan ’08), the costs toprovide serices to PTDV and Astro’s expenses incurred in developing a DTH business proposal in Idonesia was RM135 million, with a further RM92.4 million write-off of assets and balances by the firm related to the failed investment.

PTDV launched its digital-satellite pay-TV service in February 2006 but as far back as July 2006 a shareholder agreement with Astro lapsed after the government decreed in August 2005 that foreign equity participation in broadcasters would be limited to 20%. Attempts by Astro to renegotiate the agreement have failed.