Sun TV: beaming directly

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Several factors would bring about consolidation in its revenues in the coming quarters. The improving margins of its channels Udaya and Gemini, increasing subscription-based and advertisement revenues, penetration of its DTH services and its own encouraging performance, would consolidate Sun TV Network position as the media company. The company charges Rs 25 per subscriber per month for its services. It would see increase in its subscriber base with higher penetration of its own DTH services.

Also, it would gain from the launch of DTH services of Reliance and Bharti, considering its leadership position in southern India.

The company reported an operating margin of 78.5% mainly due to reduction in its administration costs for December 2007 quarter. Also, its amalgamated channels, Udaya and Gemini, have demonstrated good performances (about of 40% of revenues). An increase in its advertising rates from February 2008 around 15 to 20% across all channels (20 in all, covering all South Indian languages) would also bring about a handsome growth in its revenues.

The company’s FM business is set to be a major revenue source. It has around 49% stake in the well-established ‘RED FM’ channel. It recently launched its FM station at Kannur in Kerala. This launch would increase the company’s presence to 25 cities. It has presence in cities like Chennai, Coimbatore, Tirunelveli, Visakhapatnam, Bangalore, Hyderabad, Jaipur, and Bhubaneswar. The company hold licences for 45 FM Radio Stations across India, and will be one of the largest radio broadcasters in India when all the remaining 20 stations become operational. On the financial front, the company has demonstrated good performance. As of December 2007, the company had a PAT of Rs102 crore and OPM and NPM of around 80% and 43%, respectively.