SkyCable to focus on digitization efforts, allots P1-B capex

By Lenie Lectura, BusinessMirror

Posted at Jun 29 2012 07:52 AM | Updated as of Jun 29 2012 07:56 PM

MANILA, Philippines - SkyCable Corp., the country’s largest cable television operator, is keeping its capital expenditure (capex) this year at roughly P1 billion, with the bulk to be spent on digitization efforts.

SkyCable subscriber base now stands at 700,000, said managing director Carlo Katigbak.

“Last month, we purchased the assets of Destiny Cable. This adds to roughly around 180,000 subscribers to SkyCable, which now has 700,000. So right now, on a national basis we control about 45 percent of the cable TV market,” Katigbak said in an interview.

He said the P1-billion programmed capex for SkyCable this year already includes whatever cost to be incurred to maintain, operate and provide digital boxes for Destiny Cable subscribers. “Even with Destiny, our capex won’t change. We are maintaining it at roughly P1 billion which is about the same as last year,” said the SkyCable official, adding that bulk of the amount will be spent for maintenance and purchase of digital boxes which are essential in curbing cable TV piracy.

In Metro Manila, almost 95 percent of SkyCable subscriptions were already converted to digital TV. “Hopefully, by end of the year the shift from regular cable TV to digital TV would have reached 100 percent,” added Katigbak.

SkyCable announced last month the sale and transfer deal inked with the cable TV, broadband Internet and direct-to-home pay-TV units of the Lim-owned Solid Group Inc. for P3.5 billion.

The transaction will provide Destiny Cable subscribers with the benefits of digital cable technology that is already being utilized by SkyCable.

“The transaction allows more consumers to derive benefits from the business expertise and substantial investments in technology made by Sky Cable.” These include clearer signal reception, access to more channels through a digital platform, access to various services that can only be provided through digital cable technology—all backed up by “established reputation for competence, reliability and affordability of such services already being provided by SkyCable in its service areas.”

SkyCable will use both equity and borrowed funds to finance the purchase of the foregoing assets of Destiny Cable, Solid Broadband Inc. and Uni-Cable TV. The purchased assets are intended to be used in the expansion of SkyCable’s television and broadband businesses. The acquisition will not result in higher rates for Destiny subscribers.

“As we plan these out, we will take extra care not to disrupt the existing services of the current subscribers. They will continue to pay same monthly fees for their subscribed plans, at the same payment centers, and can continue to reach customer service at the same numbers,” SkyCable chief operating officer Rodrigo Montinola had said.

Montinola added that cable TV penetration in the country remains one of the lowest in the Asia-Pacific region. He said that only 15 percent of households with TV had cable subscriptions.

“The penetration rate or ratio of cable subscriptions to the country’s population is very low by international standards. The 15 percent is too low when compared to South Korea’s and Taiwan’s 80 percent and 90 percent, respectively,” he said.

Montinola said more innovative pricing plans should be offered so that the viewing public would be enticed to shift to pay cable TV service.

“We have been a pioneer of providing cable services in the country in many aspects. We intend to continue to elevate Filipino families’ viewing experience with additional digital cable channels and flexible price plans,” Montinola said.