Flat growth seen for cable TV business

MANILA, Philippines - Cable television subscription in the country will no longer grow and the industry will just have to focus on offering value-added services for additional revenues, Philippine Cable Television Association (PCTA) president Elpidio Paras.

“There is no more growth in numbers because I believe that those who can afford cable have already subscribed,” Paras said, pointing out that cable subscription has stopped increasing since 2008.

According to him, the source of growth for cable operators is now on value-added services such as broadband via cable and pay-per-view products like the recent fight of boxing sensation Manny Pacquiao.

Paras added that many cable companies in medium-sized cities are now offering broadband over cable as a value-added service. Cable operators in Metro Manila, Cebu, Davao, Cagayan de Oro and Bacolod are now offering this service.

He said those that started early in offering this service are now getting about 20 percent of their income from VAS subscription, with the bulk coming from broadband offering.

Meanwhile, Paras emphasized that cable piracy remains a major challenge to cable operators. About P300 million in potential losses are experienced by cable operators every year considering that there is one illegal user for every paying subscriber, with most of the illegal connections experienced in Metro Manila.

Despite the absence of growth in subscription and the proliferation of cable theft, Paras said most cable operators in Metro Manila “are now in the black.”

“They used to have a lot of reds in their finances due to piracy issues,” he said.

Paras said aside from cable theft, competition posed by telecommunications companies, broadcast station and direct-to-home service providers will challenge cable providers in the next years.

“The cable operators actually hold the last mile connection to the subscribers and that’s a high bandwidth infrastructure which I think have value to the telecom firms,” he said.

He added that telecom firms only reach subscribers through twisted pair of frequencies, which provide limited capacity in the delivery of data.