Cignal TV Targets 200K Subs

Mediaquest Holdings, the media arm of incumbent telco Philippine Long Distance Telephone Co. (PLDT), will this year invest P700 mil./US$15 mil. in capEx investment for its satellite TV platform Cignal TV, as it looks to grow its subscriber base to 200,000 subs by end-2010.

The money will be spent on buying STBs and additional infrastructure.

The DTH operation, launched in July last year, has already seen P1 bil. in investment to get its digital, HD offering off the ground. Cignal TV had 45,000 subs at end-2009, and a new round of growth could see it overtake Dream Broadcasting, one of the most widely pirated DTH systems in the world, as the country’s No.1 DTH player.

There are ~1.5 mil. pay-TV customers in the Philippines, predominantly on cable, according to MPA. However, by focusing on areas not supplied by cable, Cignal TV is trying to grow the market. But cable players have seen little growth due to affordability and under-capitalization issues.

Piracy remains the key concern for all, with an estimated ~1.5 mil. illegal subscribers. Mediaquest and leading cable operator SkyCable (~0.5 mil. subs) are making the greatest push for digital and HD STBs, which allows them to offer an encrypted service, while offering multiple price points and a pre-paid service. SkyCable has invested a comparable P2 bil. in capEx towards digitization and broadband deployment, but crucially almost half of its subscribers are based in Metro Manila, where the highest density of high-yield customers are located.

Cignal TV’s basic package offers 21 SD channels for a onetime fee of P4,700 for STB, and satellite dish, while an installation fee of P1,000 and monthly service charge of P390 also applies.

The platform also offers a number of HD channels, including History Channel, HBO, Nat Geo, among others. The HD package is available for a one-time fee of P4,800, an installation fee of P1,000 and a monthly service charge of P790.