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Introduction

Reliance Group's acquisition of stakes in India's two major cable operators – DEN Networks and Hathway – not only will strengthen RJio's foothold in the home broadband segment, but will position it as a leading pay-TV provider.

Highlights

  • Reliance Group has agreed to pay INR22.9bn ($323m) to acquire a 66% stake in DEN Networks and INR29.4bn for a 51.34% stake in Hathway, through subsidiary businesses Jio Content Distribution Holdings, Jio Internet Distribution Holdings, and Jio Cable and Broadband Holdings, with each acquiring varying stakes in the two target firms.
  • Unlike in the mobile market, rolling out last-mile connectivity at this scale required the group not only to commit much higher capital investments but to deal with a segment plagued by less favorable regulations.
  • A more serious assault is expected in the broadcasting and media segment, as Reliance will position its Giga TV service primarily as a value add to its core broadband business, accelerating price erosion through escalating competition in the pay-TV segment.

Features and Benefits

  • Understand the recent announcement on Reliance's stake acquisitions in DEN Networks and Hathway.
  • Understand the synergies the deal will bring.
  • How will Reliance leverage DEN's and Hathway's established infrastructure and household networks?
  • How will the acquisitions affect the industry?

Key questions answered

  • What is the rationale behind Reliance's recent stake acquisitions in Hathway and DEN Networks?
  • How will the acquisitions help and strengthen Reliance Jio?
  • What industry changes do we expect if the deals are finalized?
  • How will the deal affect the pay-TV market?

Table of contents

Ovum view

  • Summary
  • Reliance Group links up with DEN and Hathway as it prepares for next leap
  • RJio may emulate telcos occupying leading positions in pay TV
  • Consolidating household spending on communication and entertainment to further dent incumbents

Appendix

  • Further reading
  • Author

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