PETALING JAYA: Satellite broadcaster Astro All Asia Networks plc has regular discussions with the Government centring on content and industry matters and not on its 20-year operating licence, says a company source who deals closely with the regulator.
The source quashed an online news portal report yesterday that the Information, Communications and Culture Ministry was reviewing Astro’s operating licence to put pressure on the broadcaster to include more government-friendly content.
“We’ve had lots of debate and discussions with the ministry on what can be done to help the ministry in terms of content and promoting 1Malaysia, the timing of price hikes and so forth. At various times, we’ve had various discussions on our obligations as a broadcaster but the licence (up for review) was never an issue.
“The licence is a contractual agreement based on which significant investments have been made. The company would not have made such substantial investments without having reasonable security on the concession,” said the source.
Astro’s subsidiary, Measat Broadcast Network Systems Sdn Bhd, enjoys an exclusive licence till 2017 for satellite direct-to-home transmission in Malaysia.
In an apparent response to the report, Measat (Astro TV) chief executive officer Rohana Rozhan said in a statement that the “ongoing, regular dialogues” with the Malaysian Communications and Multimedia Commission (MCMC) and the ministry were related to the “development of the media industry” such as seeding and promoting local content creation and talents, broadening products and services, and migration to the Communications and Multimedia Act, subject to all existing rights and privileges to be retained.
“Astro is committed to actively promote and participate in making a difference to the Malaysian community,” she said, adding that towards this end, the company welcomed the opportunity to advance these and other initiatives with the MCMC.
Reuters quoted an “official familiar with the Ministry” as saying that “there is no such thing”, denying news of the possible review of the 20-year agreement which might result in Astro losing the exclusivity it currently enjoys.
However, an analyst pointed out that Astro’s exclusivity was on satellite pay TV. “The exclusivity does not cover Pay TV which is open to everyone. We have MiTV and MegaTV but they failed to make much headway due to lack of content,” he said.
Astro shares ended 5 sen lower at RM3.40 yesterday.
An analyst from TA Research said that there was currently no competitor with similar calibre and depth as Astro in terms of content and distribution network.
“The capex (capital expenditure) and technological know-how to set up the satellite broadcasting platform are quite profound, and we do not see any domestic competitor picking up the offer,” she said.
Astro has been able to weather the downturn “very well”, considering the net adds and average revenue per user while the looming concern of rising content costs was partially negated by the recent price increase in sports package.
“The management’s competence in keeping costs under control and initiatives in penetrating suburban markets have helped ensure the viability and growth of the business,” said the analyst.
An analyst at OSK Investment Bank said Astro’s earnings outlook was underpinned by its steady domestic operations, which remained resilient.
The company is currently considering several restructuring options, one of which involves hiving off its overseas unit Sun Direct TV to major shareholders Usaha Tegas Sdn Bhd and Khazanah Nasional Bhd to reward its shareholders with a handsome capital repayment. This may also turn it into a more attractive unit by separating the international from domestic operations.
In late July, the company said the board was evaluating certain proposals with the aim of achieving a more efficient capital and corporate structure. According to the source, the plan is still “work in progress.”
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