Star may take 25% stake in Hathway Cable

Star may take 25% stake in Hathway Cable
Press Trust of India

NEW DELHI, SEPT 10: Rupert Murdoch controlled Star TV is likely to take 25 per cent equity stake in Rajan Raheja's Hathway Cable Company to firm up its place in the fiercely competitive cable distribution market. Company sources confirmed the move, but declined to comment on the price involved.

Star TV's move comes at a time when arch rival Zee TV is scouting for a joint venture partner for Siti Cable from which Star had exited recently. If the deal comes through, Star will gain access to about 1.5 million cable and satellite (C&S) homes which Hathway claims to reach either directly or via its controlling stake in other cable networks, sources said.

When contacted, Star TV spokesperson Yash Khanna declined to comment on the deal and said "we'll make an announcement about this next week". Besides strengthening Star's position in the distribution business, this move is expected to give a filip to the company's internet related plans which include offering broadband services - where distribution strength would hold the key to market dominance, they said.

Also, it will strengthen Star's reach in the regional language programming market, since Star holds exclusive rights to distribute Rathikant Basu promoted Tara brand of regional channels besides its bouquet of Star Plus, MTV, Star Sports, Star News, ESPN and Star World.

Hathway is a Rajan Raheja owned company, with strong presence in Kerala and South Mumbai besides several other southern states. Star TV is eyeing the broadband delivery market and has plans to upgrade the Raheja network and begin distributing internet on cable besides launching addressable systems of pay television.

This strategy gels with what Murdoch said on his visit to India earlier this year about investing "several hundreds of millions of dollars" in the country over the next couple of years, of which a significant part would go towards information technology and internet related investments.

He had unveiled plans to set up a state-of-the-art optical fibre telecom network on top priority to offer braodband and other net related services, and the possible stake in Hathway would give these plans a shot in the arm.

Also on Murdoch's agenda was launching TV channels in six main Indian languages. Murdoch, whose empire has reported assets of $ 39 billion, had also unveiled plans to invest in IT ventures and to beef up Star TV's channel network to make it "more aggressive" in India.

Murdoch had outlined plans for setting up an optical fibre network as part of building a multi-media delivery engine in future and that Newscorp group, which owns Star TV, planned to set up an entertainment programming studio near Mumbai.

"Mumbai is surrounded by webs of cable wires and they could be replaced by optical fibre network, to enable them to cater to various infotech needs from e-education to e-commerce, providing immense job opportunities," he said.