Astro may face stiff competition from TM

From The Star:

Astro All Asia Networks Plc, the country’s sole pay-TV operator, is expected to face stiff competition from Telekom Malaysia Bhd’s (TM) upcoming Internet Protocol television service (IPTV), but will likely remain dominant in the short term, analysts said.

IPTV is television content delivered interactively to homes via broadband connection.

“TM is starting from scratch, from building infrastructure to content offerings to customer base. It will take a while to show the results and will not be an overnight change; all will depend on TM’s IPTV development, infrastructure and content,” an OSK analyst said.

Maybank Investment Bank sees a greater threat to Astro from TM’s IPTV service.

“TM’s IPTV product (due to be rolled out by the first quarter 2010) may erode Astro’s net additions and average revenue per user (ARPU),” said Maybank Investment analyst Yin Shao Yang.

“Astro may retain attractive content, especially sports, but at higher prices due to competitive bids from TM,” he told clients in a research note.

Yin said TM would be a more formidable foe to Astro than MiTV, a pay-TV product launched in Sept 2005, which went bust by Oct 2006. The TV station faced lack of subscribers due to its unattractive content.

“TM however, with a huge cash pile of RM4bil, is better able to compete with Astro,” he reckoned.

I've been saying all along that TM will be moving into the triple play arena with a high possibility of Astro eating the dust. They are using landed lines versus satellite transmission which is always more reliable in bad weather. Plus, TM with their state of the art infrastructure will be able to transmit HD quality signals while Astro has been sitting on their laurels.

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