Canal Plus Launches Vietnam DTH Platform

French broadcaster Canal Plus Group’s new DTH platform in Vietnam, K +, is set for launch – the first time foreign capital has been allowed to develop a TV distribution platform in the country.

Over 50 local and international channels are available from launch, with the majority dubbed or subtitled in Vietnamese. The company promises to offer a range of subscription packages to suit each viewer, with a potential focus on family content, according to a press release. Broadcast on Vinasat-1, K + is available throughout the country, supported by a network of 1,500 retail points and K + stores.

It also highlights the need to effectively combat piracy, and is powered by a conditional access system from Nagra. Piracy remains a key issue with over 200 illegal operators versus ~40 legal ones. The legitimate market for pay-TV in Vietnam totaled 1.7 mil. subs, or 8% penetration of TV homes with ARPU at US$4 per month, according to MPA.

Canal Plus will invest about US$50 mil. over the next three years in the JV, according to CEO Bertrand Meheut. It is targeting an addressable pay-TV audience of 6 mil. homes, and expects to sign up 1 mil. subs over three years, with EBITDA breakeven after two years. In the nine month period to end-Sept 2009, Canal Plus posted an operating profit of 750 mil. euros/US$1.09 bil. for its European-driven business.

A boost for DTH
DTH, and potentially but to a much lesser extent IPTV, has a lot of market potential, given the fact that cable operators (over 1 mil. homes) are undercapitalized, fragmented and suffer from piracy. However, the Canal Plus deal may also pave the way for cable to entice greater levels of capital investment from foreign players, including the likes of Liberty Global, Inc.

The platform will be operated and marketed by subsidiary VSTV, a joint venture with Vietnamese state broadcaster VTV that was formed last June. The JV falls in line with Canal Plus’ international growth plans in emerging markets, which has already seen activity in North Africa in markets including Algeria, Morocco and Tunisia.

Canal Plus holds a 49% share, with the controlling 51% held by VTV's market- leading pay-TV affiliate Vietnam Cable Television (VCTV), which also a satellite TV license. VCTV has 320,000 cable subs, and is investing more heavily in DTH. Others are also eyeing the DTH space; digital terrestrial player Vietnam Multimedia Communications (VTC) is looking to migrate to a DTH platform, shifting its viewers to a premium subscription service.

The sector will likely grow further with the anticipated launch of Vinasat-2 in 2012, after the Vietnamese Prime Minister this month approved an investment project for the satellite. The chief investor in the project, the Vietnam Post and Telecommunications Group (VNPT), is now able to select bidders for the project, including investment and launch services.