IndusInd To Invest Rs 200 Cr In First Phase Of CAS Rollout

Mumbai: | Updated: May 23 2003, 05:30am hrs
The Hindujas-promoted IndusInd Media & Communications has decided to invest Rs 200 crore in the first phase of the conditional access systems (CAS) rollout, out of which Rs 40 crore will be raised through debt.

The companys investment towards conditional access solutions including encryption technology and subscriber management system (SMS) will be Rs 100 crore, said group company Hinduja TMTs president KV Seshasayee, who also heads the 60-member task force on CAS. The cash flow arrangement for the digital set-top boxes will be Rs 60 crore while the balance Rs 40 crore will be towards changing and improving the IT infrastructure, he added.

The company has selected Taiwan-based Wistron, part of the Acer group, and Germany-based Techno Trend as its digital set-top box suppliers. While Wistron has an understanding with EuroStar which has a manufacturing plant in Pondicherry, Techno Trend has chosen Mumbai-based Celetron as a primary base to make the boxes. The second base for the German company will be Sri Lanka. The duty structure is low as India and Sri Lanka have a special relationship, said Mr Seshasayee.

IndusInd decided on two set-top box vendors because it wanted to ensure that there was no shortfall in supply.

We selected on these foreign-based suppliers as we felt they could ramp up supply. Cost and quality were also important factors, said Mr Seshasayee.

Initially, the boxes will be imported but later on the two vendors will utilise the manufacturing facilities in India. We will initially import the products. Later, we will assemble it here. Our international vendors will have an arrangement with the manufacturing units in India to make their designed boxes. Incidentally, Celetron makes direct-to-home boxes for US-based EchoStar, said Mr Seshasayee.

The company, Mr Seshasayee said, has ordered 300,000 boxes and is committed to a million sets.

We plan to install 165,000 boxes by July 14, he said. INCablenet, a MSO operator from the Hinduja stable, has around 1.7 to 2 million subscriber homes in Mumbai and Delhi.

For the IT infrastructure and SMS, IndusInd Media has finalised Hyderabad-based MagnaQuest. SAP is the ERP vendor. We are also setting up a 50-seater call centre in Mumbai. Populating the set-top boxes in a majority of households will, however, be our biggest challenge, said Mr Seshasayee.

Incidentally, Kudelski SA has picked up 3 per cent stake in IndusInd Media based on the valuation of approximately $500 million. Nagravision, which is IndusInds conditional access solution provider, is a wholly owned subsidiary of Kudelski. Funding of CA solution will be largely met through Kudelskis investment into the company.