The Tata-owned Videsh Sanchar Nigam and Thomson of France will together invest $50 million to set up a facility to provide high technology services to the Indian entertainment sector, the first of its kind in the country.
According to a source, the blueprint for the venture is ready and will be presented to the VSNL board shortly.
The facility will be set up in the suburbs of Mumbai. At a later stage, more hubs may be set up in south India. The two companies had signed an MoU in July last year to explore opportunities to service both content creators and distributors.
The preferred plan is to float a joint venture in which both partners will have equal stakes.
However, the alliance could be more loosely structured to take advantage of Customs duty benefits. Sources explained that VSNL was entitled to some duty benefits for imports of certain equipment and the savings could be as much as 15-20 per cent.
In that case, the alliance would be more in the nature of a markting tie-up with VSNL making the entire investment and Thomson earning a fee.
The addressable market for this business is estimated to be in the region of $100 million.
Internationally telecom companies such as British Telecom and Singtel offer these services and revenues from this space are in the region of between $300-$350 million.
Given the advantages of relatively inexpensive technical manpower available in India, the idea is to provide these services even to customers overseas because it could work out cheaper for them.The project envisages managing and delivering content for third parties and providing uplinking services for television channels.
Managing content would include assembling, processing and also digitising the content for broadcasters to make it ready for viewing.
It also includes facilities such as dubbing and crating of different versions for different markets and audiences.
Besides, VSNL will leverage its fibre network to transfer the content, which could result in a saving of both time and resources, since the content would not have to be sent in tapes.
Currently, most channels uplink outside the country and with the launch of new channels, there is a huge opportunity in providing uplinking services.
VSNL already offers uplinking services to Star News and Aastha.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
