Wednesday, March 22

TM to be major beneficiary of new sports media content ruling, well poised to capitalise on convergence — Analyst


KUCHING: Telekom Malaysia Bhd (TM) is expected to significantly benefit from the liberalisation of the regulatory framework in which all free-to-air (FTA) TV stations will be able to share media content obtained from the rights holder from May 1 this year.

Specifically, all FTA stations that did not have broadcasting rights to major sporting events of mass appeal would be able to share the content under the initiative to be carried out through the Communications and Multimedia Act (CMA) 1998.

Information, Communications and Culture Minister Datuk Seri Dr Rais Yatim said this would give wide coverage to sporting events involving the interest of the country and enable all Malaysians to watch them instead of allowing these events to be monopolised by the rights holder.

In a research note, OSK Research Sdn Bhd (OSK Research) remarked, “The liberalisation of the regulatory framework for content is positive for TM as it would be able access popular sporting content, currently ring-fenced by Astro, to beef up its IPTV (Internet Protocol TV) offering bundled together with Unifi.

“We had previously highlighted that IPTV would increasingly become a differentiator for operators embracing triple play as a means to boost longer term ARPU (average revenue per user) and subscriber stickiness.

“In addition to TM, other operators that will benefit from this development are Asian Broadcasting Network (ABN), the new cable TV operator, Maxis Bhd and FTA operator Media Prima, which dominates FTA TV in Malaysia,” the research house opined.

The relaxation of the content guidelines took its cue from the content carriage ruling in Singapore that took effect in March 2010.

OSK Research regarded the new ruling as a setback for Astro, the country’s sole pay-TV operator, which was feeling the onslaught of competition from Unifi and ABN.

The ministerial directive stated that sports events of national significance that would be subject to the new guidelines are the Olympics, Commonwealth Games, Asian Games, SEA Games, Sukma, as well as badminton and football tournaments where broadcasting rights would have to be shared on reasonable commercial terms.

Some of the key sports content currently exclusive to Astro are the broadcasting rights to the Barclays Premier League (BPL) and FIFA World Cup. The bidding for the next season of BPL’s broadcasting rights was expected to start in the third quarter of this year.

“We believe TM is well poised to capitalise on the convergent theme as its internet and data businesses are well-executed and the group is progressively reaping the benefits of the migration into the next-generation IP based platform.

“We believe IPTV will increasingly become a distinguishing feature for Unifi as broadband services become commoditised,” the research house opined.

Remaining positive on TM, the research house pegged the fair value at RM5.90 per share premised on six times financial year 2013 enterprise value (EV) to earnings before interest, tax, depreciation and amortisation.