Sky Vision Corp., the country’s largest cable television provider under the Sky Cable brand, has acquired the Lorenzo family’s 47-percent stake in Pilipino Cable Corp. for around P900 million.
Eugenio Lopez III, director of Sky Vision and chairman of ABS-CBN Broadcasting Corp., said funding for the acquisition would come from debt.
ABS-CBN owns 10.2 percent of Sky Vision.
Lopez said the acquisition would boost Sky Vision’s IPO chances of success. The group is planning to take public Sky Vision within the next two years or even earlier dependent on market conditions.
Operations of SkyCable and Home Cable have been merged since 2001, consolidated under holding firm Beyond Cable Holdings Inc., which has a 51-percent interest in Pilipino Cable.
Beyond is 66.5 percent owned by the Lopez family’s Benpres Holdings Corp. and 33.5 percent by MediaQuest Holdings Inc., owned by the Beneficial Trust Fund of PLDT. Prior to the merger, MediaQuest controlled a majority stake in Home Cable while SkyCable was a wholly owned subsidiary of Benpres.
Sky Cable currently holds a 43- percent share of the cable market with total of 462,000 subscribers as of end-December 2007.
After several years of losses, Sky Cable posted a net profit of P122.6 million last year on the back of a seven-percent rise in subscription revenues.
The turnaround was attribute to Sky Cable’s continued offering of innovative services like its DigiBox which allows its subscribers different programming tiers from the company’s prepaid service.
The Digibox enriches the cable viewing experience by offering digital quality signals and addresses the problem of cable theft as well as by encrypting the cable signal, thereby preventing illegal tapping into Sky Cable’s network.
Aside from this, the Digibox also includes features such as electronic program guides that let the viewers know what they are watching and what is coming up for the rest of the week, parental locks for non-child friendly programming and interactive video games.
Early results of sky Cable’s prepaid cable service has been encouraging. In areas where the service has been launced, Sky Cable has seen up to a 70 percent growth in the number of subscribers.
With additional capital funding, Sky Cable seeks to expand the coverage of the prepaid service to nearly 50 percent of its franchise area in Metro Manila over the next two years.
To sustain its profitability this year and the years to come, Sky Cable will launch high-definition programming (HDTV) as well as personal video Recorders (PVRs) which allow subscribers to pause, rewind and forward while they are watching live program feeds.
The PVRs will allow subscribers to record as much as 80 hours worth of programs.
Sky Cable will also expand the coverage of its broadband Internet service and increase the available bandwidth to the home.
“These plans are geared toward rejuvenating the post-paid subscriber business by increasing the average revenue per subscriber,” the company said in a report submitted to securities regulators.