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Starhub

This is MARKET HARRASSMENT of Consumers & Investors

Devil in the detail

The questions now are whether the proposed solution will work, and whether it introduces new distortions or problems.  All new exclusive content obtained

by an operator must be offered to other operators, and the

other operators must carry such exclusive content offered.

This has interesting and unclear repercussions.

First and foremost, exclusive carriage agreements will probably

become less common. It would now make more sense for an operator to insist on non-exclusive arrangements, and differentiate itself through innovative content packaging. Genuine increased differentiation will enhance consumer choice, which would be a positive outcome. MDA has said it will work with the industry on the details, and that is where the devil lies.

Given that SingTel and StarHub use their respective networks to deliver

other services (such as broadband) besides pay-TV, how will they ensure that their networks have sufficient bandwidth to cater for all these services, the increase in highdefinition content, and also other operators’ exclusive content?

How will exclusive pay-perview content be shared and billed?

It is also as yet unclear how content owners will respond. For instance, what if content owners insist on exclusive arrangements, and the operators decline to pay the higher costs associated with exclusivity and forego the content?

How will MDA respond to this?

The move to have all exclusive content carried by all operators was perhaps unexpected by most observers. Perhaps, a less intrusive approach could have been to require only certain MDA-designated “critical content”, such as EPL rights, be made available to all players, which would be similar to the concept of “essential facilities” in the telco world. But that opens the Pandora’s box: What is “criticalcontent” besides EPL?

The pay-TV market has still not stabilised. This change will result in even greater flux. M1’s enthusiastic reception suggests that it is emboldened to enter the pay-TV market, and thinks its abilityto present a viable triple-play offering has been strengthened.

But first and foremost, let’s hope that Fifa takes its cue from the Government and recognises that SingTel’s bid for the EPL rights was not sustainable, and hence the asking price for the World Cup rights ought to be reduced.

If that happens, then Singaporeans will praise this policy change and its very immediate results.

The writer is a corporate counsel and former Nominated Member of Parliament.

lOts  Of   BLACK HEARTS 

gOt RiCHER  by  the milliOns  iNSTEAD  but  nOt  rEtributEd   

I feel that Government came in at the right time!!

This is beneficial to everyone, and, i think StarHub has to bear the bidding cost of what Singtel has paid.   Next, Singapore Pools must come in also.....hopefully all 3 parties share the burden. 

What  KiND of  STUPID  bidding and competitiOn  is this?

Next  TiME  everyone should just BiD  S$1  and  WiLL  nOt lOOk  LiKE  an  idiOt anymOre.

anOther   blOOdy   jOkE

williamyeo      ( Date: 12-Mar-2010 19:41) Posted: March 12, 2010, 4.08 pm (Singapore time) SingTel, StarHub to cross carry products: MDA   By TEH SHI NING   The Media Development Authority will now require pay TV retailers like SingTel and Starhub to cross carry each other's exclusively acquired content.   Acting Minister for Information, Communication and the Arts Lui Tuck Yew announced this in Parliament on Friday explaining that competition centred on exclusive content contracts in Singapore since 2007 has resulted in both industry and consumers being negatively impacted. This new mandatory cross carriage measure applies to all exclusive agreements signed on or after 12 March 2010, including renewals. It will not apply retrospectively and so will not affect existing agreements such as the 2010 - 2013 Barclays Premier League broadcast rights. MDA has launched an industry consultation on the implementation details, Mr Lui said. He added that the government will not intervene in SingTel and StarHub's new offer and negotiations with FIFA for the broadcast of the World Cup as it is a commercial matter.

i beg to differ. the yields for starhub look more sustainable then sph. if you look at the cashflow of sph you will notice that cash from advertising was not able to cover their 25 cent dividend. they are sustaining by their property business. now which one is more defensive? the advertising business is more suceptable to downturns.

 I used to think that 20 cent is not sustainable. it turns out their cashflow is much better than M1 and singpost. at 18 cents is much comfortable but 20 cent is ok.

 Here is my google spreadsheet on starhub >> starhub analysis in depth.

Debt is much more than equity, but the keything to watch is the cashflow. which one is more sustainable? an ad business that is going downhill as singaporeans subscribe less to news paper or a competitive telco environment where your cashflow from each individual is lock in for 2 years?

debt financing if used well could be great. essentially starhub is using a model where 1/3 is equity and 1/3 shorterm debt and 1/3 long term debt.

 know that paying dividiend is a cost of financing. now the yield is 9% on dividend payment, if you can get debt that has interest lower than that, wouldnt it be better choice?

 fruit for thought.