Vietnam national broadcaster to divest share in three major pay TV firms
Vietnam national broadcaster to divest share in three major pay TV firms
Vietnam Television (VTV) will divest its share in three major pay TV stations by the end of next year, a plan its general director has said will benefit both shareholders and local viewers.
The national broadcaster currently owns all stakes of cable TV firm VTVcab, and a controlling share in two others, the Saigontourist Cable TV (SCTV) and Vietnam Satellite Digital Television (VSTV), which owns the K+ channel.
The three now dominate Vietnam’s pay TV market, as they collectively have around 5.1 million subscribers out of a total of some seven million nationwide, according to June 2014 data by the Vietnam Pay TV Association (VNPayTV).
VTV, however, is set to sell a considerable number of shares at all three firms as per an order by the government, general director Tran Binh Minh has said.
“VTV will first divest from VTVcab, then SCTV and finally, VSTV,” Minh divulged at a 20th anniversary ceremony of the broadcaster in Hanoi last month.
Minh said the holdings sales will improve the performance of all three firms, while bringing benefits to both shareholders and TV viewers countrywide.
With a smaller stake, VTV will only be in charge of content issues at the three broadcasters, rather than taking part in business activities, according to the general director.
SCTV was founded under a joint venture between VTV and Saigontourist, a leading tour operator in Ho Chi Minh City, in 1992.
The national broadcaster currently owns a 51 percent stake in SCTV, the market leader, boasting 2.3 million subscribers, or 32.85 percent of the country’s pay TV market.
VTV possesses the entire stake of VTVcab, which was established in 1995 and now dominates the northern market with two million paid viewers.
In 2009, VTV teamed up with France’s Canal+ to form VSTV, the joint venture that operates K+, in which the Vietnamese broadcaster owns a 51 percent stake.
Despite a modest 800,000 subscribers, K+ shocked the market after it spent dozens of millions of U.S. dollars acquiring the telecast rights of the English Premier League, including exclusive Sunday matches, which is the most-watched football competition in the world, for three seasons in a row from 2010.
To sell via auction
VTVcab general director Hoang Ngoc Huan told Tuoi Tre (Youth) newspaper VTV is expected to sell 49 percent of its shares in the company, retaining a 51 percent holding to maintain its controlling role.
VTV will also keep “a small stake” in the joint venture with Canal+ “to act mostly as a content supervisor” at VSTV, according to Le Chi Cong, the pay TV firm’s general director.
But it is unclear how many SCTV shares VTV will sell.
VTV will sell all the shares via public auction, and the earnings will be transferred to the State Capital Investment Corporation (SCIC), according to Nguyen Thanh Luong, deputy general director of the national broadcaster and chairman of VSTV.
The SCIC is in charge of the state’s holdings in companies where the government has a stake.
“We will seek investors with strong financial muscle and experience in the pay TV industry,” Luong told Tuoi Tre.
Pay TV is a lucrative market in Vietnam, as a broadcaster can post strong growth of up to 140 percent a year, according to an executive of a Hanoi-based cable TV firm.
“The profit ratio in the pay TV market can be as high as 40 percent a year and there are few sectors where you can enjoy such a high rate,” he said.
