PETALING JAYA: Astro Malaysia Holdings Bhd will soon face competition from a new cable TV operator, dubbed Ansa Broadcast, which is owned by local tycoon Tan Sri Vincent Tan Chee Yioun.
Hong Leong Investment Bank (HLIB) Research, which has downgraded Astro to a “hold” call with a lower target price of RM2.47, said Ansa Broadcast, previously known as U-television, is in the midst of entering the satellite pay-TV segment.
“While details remain scarce, we understand that Ansa is currently deciding which satellite solution to adopt, either to lease bandwidth from operators or launch its own satellite.”
It said the implementation may take some time before the new broadcast is officially launched.
“If it materialises, Astro will face the pressure that has been absent for past 20 years with Ansa’s entrance as a new DHT satellite player.”
HLIB Research said while many non-satellite broadcasters such as ABNXcess, MiTV and Mega TV had failed historically, Ansa could be disruptive in offering aggressive pricing and content variances, albeit it is not expected to be an overnight success.
Astro has monopolised Malaysia’s DTH satellite pay-TV for the past 20 years and the exclusivity clause finally ended in February 2017.
Meanwhile, Astro reportedly is seeking a fair ground against over-the-top (OTT) players in Malaysia and wants them to be regulated by the Communication and Multimedia Act 1998.
“Astro believes that with a level playing field upon regulation, it will be in a better position as it owns most of the broadcasting rights in Malaysia. Given so, pirated OTT players remain a significant threat that cannot be avoided.”
HLIB Research highlighted that the weak ringgit will drive up content cost for Astro as most of its content is sourced internationally.
Television still dominates a lion’s share (40%) of the advertising expenditure (adex) pie, despite the spill over of adex from traditional to digital platform.
Nonetheless, the research house said given the soft advertising market it is crucial for Astro to sustain its subscription fees and evolve faster than ever to differentiate from its peers.
Astro’s share price rose two sen to close at RM2.69 today on some 1.26 million shares done, giving it a market capitalisation of RM14 billion.
Source: The Sun Daily