The cable unit of ABS-CBN Corp. has secured a green light from the National Telecommunications Commission to venture into satellite TV services, despite opposition from Philippine Long Distance Telephone Co. and other cable TV operators.
NTC, in an order dated Dec. 23, 2015, granted Sky Cable Corp., a unit of ABS-CBN, a provisional authority to install, operate and maintain a direct broadcast satellite in 251 cities and municipalities for 18 months.
NTC said Sky Cable was “technically feasible” to roll out DBS services in the country. DBS, also known as “direct-to-home,” transmits signals to subscribers using satellite technology.
Cignal TV of PLDT, Philippine Cable Television Association, TV5 Network Inc. and Dream Satellite TV have opposed Sky Cable’s bid to offer DTH, citing violation of the anti-monopoly law.
Sky Cable’s new satellite service would compete with Cignal TV, Dream Satellite TV and GSat, which all offer DTH services nationwide.
Sky Cable said the estimated cost of starting the project would be P250 million, with an initial capital outlay of P122 million to cover the purchase of various equipment, while the remaining P130 million would serve as working capital.
The company projected to acquire 49,500 subscribers in first year of operation and increase it to 864,600 subscribers in 10 years.
Sky Cable proposed a one-time installation fee of P3,990 and a charge P390 for DTH prepaid card for 30 days.
Sky Cable said it anticipated to post a gross revenue of P69.42 million in first year operation, with a net loss of P290.22 million.
It said by the tenth year of operation, it expected to post a profit of P467 million out of P2.97 billion in gross revenues.
SkyCable said the financial projection would be “attainable” as there were currently 2.53 million subscribers for cable and DTH services in the country, or mere 17 percent of the 14.17 million TV households.
This means that 83 percent of the TV households or 11.76 million households remain to be connected to CATV or DTH services.
Rival Cignal TV had 1.2 million subscribers as end-2015, while Sky Cable had more than 800,000 subscribers as of September last year.
ABS-CBN Group chief financial officer Rolando Valdueza earlier said Sky Cable’s capital expenditure for 2016 would be “slightly higher” than P2 billion this year because of the broadband and planned rollout of the DTH service.
“As soon as we get the license from NTC, I think that’s the time we are ready to roll out the DTH,” Valdueza said.
Sky Cable posted a revenue of P5.8 billion in the first nine months of 2015, up from P5.2 billion in the same period last year.