The Game of DTH license auction in Pakistan


Following the government’s announcement of going forward with the Direct to Home (DTH) license auction, the Cable Operators Federation (COF) announced their plans of going on a strike on 21st November, Monday at 7:00 pm. Protests are also expected to take place in front of the PEMRA office in Islamabad with some cable operators threatening shutting down their cable services in retaliation.

What is the difference between DTH and Cable TV?

Cable TV is analog connection while DTH is digital satellite connection. DTH provides better audio and video quality as compared to Cable TV. Cable TV does not offer any Interactive services while DTH services provide enhanced interactive TV services including Internet access, email, video conferencing and movie-on-demand. Also, cable connection is provided via cables while DTH uses a small antenna directly connected to satellite signals. Pakistani cable operators will suffer a huge loss if DTH takes place of the Cable TV.

The COF representatives argue that the government plan of auctioning DTH licenses will effectively spell an end for the cable business in Pakistan, sinking their investments and possibly affecting jobs and income for thousands of households. Some cable providers are calling for postponement of 5 years or more, allowing them the due time to plan and recover their investments before DTH and High Definition channels take over. The DTH licenses have already been delayed/postponed twice before.

There has been no official word from PEMRA regarding the recent announcement from COF, and the license auction is expected to go as planned on the 23rd of November, Wednesday. The DTH services plan is expected to bring in significant investment for the Pakistani media, with projected figured looming around the $400 million mark.

Currently as per plan, PEMRA will be offering 3 licenses to 12 potential buyers. Each license will be issued for an initial period of 15 years with extension clauses allowing companies to renew their licenses at the end of the term. The 12 shortlisted companies include an array of manufacturing and services companies both with local and foreign interest. While PEMRA has directly banned investment from Media Companies (to thwart any attempts at monopolization), it has not stopped them from seeking partnerships and creating subsidiaries (fronts) to get in to the DTH game.

With PEMRA allowing for foreign investments and partnerships, a second round of shortlisting is likely to follow up after the auction. The companies will be evaluated on technical grounds to ensure that the benefit of this process goes directly to the consumer. This is why the highest bid alone will not suffice or guarantee license allotment.

The initial shortlisting process eliminated the ISP, Link dot Net Pakistan, World Call Telecom, Vision Broadcast and Sharif Feed Mills (Pvt.) Ltd., with the last being a shock exit. Here is what we know about the remaining 12 participants:

  • M/s. Orient Electronics (Pvt.) Ltd., Lahore (incorporated 23 Aug 2005)
    Part of Orient Group of Companies – Manufactures/Assembles Home Appliances and Consumer Electronics.
  • M/s. Mag Entertainment (Pvt.) Ltd., Lahore. (incorporated 18 March 2016)
    Newly formed. No information available.
  • M/s. Sardar Builders (Pvt.) Ltd., Islamabad. (incorporated 20 Apr 2004)
    Partner Company to Al Tamimi Group, Saudi Arabia – Responsible for Centaurus Mall, Islamabad.
  • M/s. Skyflix (Pvt.) Ltd., Islamabad. (incorporated 2 Aug 2016)
    Newly formed. No information available.
  • M/s. Startimes Communications (Pvt.) Ltd., Islamabad. (incorporated 11 Nov 2015)
    Part of StarTimes Group, China – Large broadcasting and television group.
  • M/s. Smart Sky (Pvt.) Ltd., Islamabad. (incorporated 12 Oct 2015)
    Part of Etisalat and PTCL Pakistan – Responsible for providing PTCL TV App. Already claim to be a DTH company in Pakistan on their website (with the Auction pending).
  • M/s. Parus Media & Broadcast (Pvt.) Ltd., Islamabad. (incorporated 27 Mar 2013)
    Joint Venture of Capital DTH, Pakistan, GS Group, Russia and Digital SatTV, Pakistan. Both Pakistani companies in the JV have been involved in Cable and/or SatBox business in Pakistan.
  • M/s. Naya Tel (Pvt.) Ltd., Islamabad. (incorporated 6 May 2004)
    A private DSL company in Pakistan which has expanded its portfolio to include Cable services as well (Islamabad).
  • M/s. Mastro Media Distribution (Pvt.) Ltd. Islamabad. (incorporated 16 Oct 2015)
    Newly formed. No information available.
  • M/s. Shahzad Sky (Pvt.) Ltd. Islamabad (incorporated 10 Aug 2012)
    Part of the French CGG Group. Invested in various projects.
  • M/s. HB DTH (Pvt.) Ltd. Islamabad. (incorporated 3 Nov 2015)
    Newly formed. No information available.

Writer’s Pick

Amongst the competing companies, it’s difficult to pick 3 clear contenders but considering the investment and technology required I have picked Orient Electronics as one viable choice (Disclaimer: I work for Orient Group). The company has experience in manufacturing consumer electronics and hence, can capitalize on its hardware capabilities to provide a reliable solution in the market (with an after sales service plan). Other companies are likely to import boxes or manufacture in China.

The second contender, in my opinion, has to be Startimes, China. I picked Startimes over other foreign investment groups due to the company’s experience in Media distribution. The company is also likely to be the strongest investment-wise.

My last pick is Sardar Builders, Saudi-funded group just due to the pure financial strength of the group. The company has been responsible for some the most exciting projects in Pakistan and has a very good chance to outbid most of the other participants to win the license.

How do you feel about our picks? Send us your arguments in the comments below, and remember, no matter which company wins, the real winner is the consumer.

Disclaimer — The views expressed here are of the guest contributor and doesn’t necessarily reflect the views of TechJuice editorial staff.

The post The Game of DTH license auction in Pakistan appeared first on TechJuice.

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