Billionaire Ananda's Astro and Fetch TV in possible tie-up

  • Business
  • Wednesday, 25 Nov 2009

PETALING JAYA: Billionaire T. Ananda Krishnan and his company, Astro All Asia Networks, are in preliminary talks with Australian Internet protocol TV start-up company Fetch TV for a possible tie-up, said a source.

“It is still in talking stages at this point. It is unsure whether an investment will be done privately by Ananda or through Astro. In any case, should an investment be done via Astro, it will likely be below the 5% threshold,” the source added.

Yesterday, it was reported by The Australian that Astro, which is controlled by Ananda through his private vehicle, Usaha Tegas Sdn Bhd, owns a minority stake of nearly 40% in Fetch TV. It is also believed that Khazanah Nasional Bhd is involved, as it has a 20% stake in Astro.

While declining to elaborate on the Australian venture, Astro chief financial officer Grant Ferguson mentioned that it (Astro) was likely to be evaluating a number of possible investment opportunities.

“It is not practical or appropriate, given commercial sensitivities and obligations to other parties in these discussions, to talk about any specific opportunity, particularly when the questions arise from unnamed sources in overseas markets,” he said.

He added that Astro certainly was keen to look at opportunities in new media platforms and digital content to be delivered on them so long as it was consistent with Astro’s strategy for investing in international markets.

“We will always look to invest where there are opportunities for growth in the media and entertainment sectors and where we can add value as a partner of choice by leveraging on our existing skills, experience and assets,” said Ferguson.

Meanwhile, the source added that if the investment in Fetch TV was done privately via Ananda, he might eventually pump it into Astro for a premium pricing, like what he did with Celestial Pictures Ltd.

In 2001, Ananda bought Hong Kong-based Celestial, which owns the Shaw Brothers library, for US$77mil or HK$600mil. Astro bought Celestial in 2003 for US$120mil.

Meanwhile, the Australian TV market is competitive but offers opportunities as the existing broadband links are superior.

Internet service providers (ISPs) iiNet and Internode have confirmed they are working with Fetch TV to deliver a low-cost pay-TV service over broadband to their customers’ TV sets.

Fetch TV aims to bring together a coalition of smaller ISPs, which will on-sell video content delivered by an Internet-connected TV set-top box to their broadband customers.

The service will offer a suite of cheaply-priced English and foreign-language pay-TV channels, some on-demand content and the functionality of a personal video recorder at a cost of A$20 to A$25 on top of a broadband connection.

“Australia is a rich pay-TV market where TV services are still priced quite highly. While If Fetch TV is one of the many players elbowing to deliver video content and TV services, armed with a competitive product, it can be disruptive to the incumbents,” the source said.

A bank-backed analyst said one should not read too much into the deal, as it was unlikely to impact Astro. “The network is yet to be up. Fetch TV will also be competing with the existing pay-TV companies like Foxtel and Austar which are doing well. These are still early days.”

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