By Alicia Buller
UAE cable television company E-Vision is proving the critics wrong, as its subscriber base keeps on growing. Chief executive Humaid Rashid Sahoo tells Alicia Buller the secret of his success.
|~|Humaid-A.-Rashid-Sahoo-200.jpg|~|MOVING FORWARD: Sahoo is banking on the continued growth in the cable television market.|~|Last year was a fruitful one for Humaid Rashid Sahoo, the chief executive of cable television company E-Vision. The firm gained over 100,000 new subscribers in 2005 – its total customer base now stands at around 500,000.
This figure represents a massive leap up from the company’s starting point of 20,000 users in 2000. Good work, considering that some of Sahoo’s peers elsewhere in the world have experienced teething disasters since the early 1990s: of 15 original players in the UK's original cable market, for example, just two survived — Telewest and NTL.
It therefore took a brave man to direct the UAE’s first cable TV project – and Sahoo remains both levelheaded and optimistic about the future.
“In the beginning, we started with Dubai and Abu Dhabi — but now we have expanded to include most of Abu Dhabi, Dubai, Sharjah, Al Ain and Ajman. We cover around 60% of the UAE, focusing mainly on the populated and commercial areas,” says Sahoo. “The remote areas – well, there’s issues like accessibility and the economic feasibility of serving them, but we believe in the next two years that we’ll cover the whole of the UAE.”
Since its foundation in 2000 as a subsidiary of telecoms giant Etisalat in April 2000, the UAE’s first cable provider has grown its channel portfolio from 39 to over 200, swallowing up the competition on the way. Initially, the firm faced scepticism from outsiders because they believed that the cable TV market was too nascent to be a success in the region. But it is safe to say that E-Vision has now proved its critics wrong — though Sahoo admits it wasn’t easy.
“As far as the content is concerned, it was very hard to prove to people that we could succeed in this market because the cable TV industry is very new in this part of the world. But now we are re-broadcasting more than 200 channels — all the major platforms are partnered with us. We have proved ourselves,” he says. “We are a content provider, a platform provider, as well as an aggregator,” he adds.
Sahoo believes the success of E-Vision comes down to two different factors. One is quality of service. “We have invested a lot in the technology at our broadcasting centre,” he says. “If you ask people why they have subscribed to E-Vision, the number one reason is quality.” The CEO also believes that his company differentiates itself through its homegrown channels – e-junior, aimed at kids aged 0-13, is still the most popular of E-Vision’s channels, or the ‘coolest’ as Sahoo says.
Another way that the company is attempting to increase its ‘cool’ factor is through investment in more interactive services, such as games and logo downloading for mobiles as well as development of pay-per-view and video-on-demand services. But while all this advancement is great news for the UAE consumer, it begs the question of how such large investments are faring up when matched against E-Vision’s revenues.
“When we started, the plan was that the complete project would cost AED2.5 billion (US$700 million). My estimate is that we have spent 60% to 70% of that [amount],” says Sahoo. “This business is a long term investment — you don’t expect a quick return. My management believes that this is going to profitable and studies have shown that.”
The CEO stays tight-lipped about exactly how many more E-Vision subscribers are needed for the company to break even. “We are on the right track,” he says. “It will be very soon.” Presumably a good way to break even would be to follow up on last year’s high profile negotiations with Kuwait Cable Vision concerning a joint venture to take E-Vision to Kuwait. But Sahoo treads carefully when speaking of regional expansion plans.
“We are only covering 60% of the UAE at present, so our top priority is to penetrate the UAE first. The Kuwaitis and other [ventures] were interested in trying to duplicate the platform we have here. They came here and studied it with us, and now the ball is in their court,” he says.
“We are in discussions with them but unless it is technically and economically feasible for both of us we will leave it until the right time. Like every company, we would like to expand but the priority for us is the UAE. But if a good opportunity comes we will look into it.”
While E-Vision currently carries the programming of content providers such as Showtime, ART and Orbit, these companies are also direct rivals. And Sahoo is under no illusion that — with the population being exposed to more disposable income and increasingly sophisticated tastes — the competition will only increase.
“We are constantly evaluating our channels in line with customer needs. We are different from them [competitors] because we not only show Hollywood, but we also show some Indian movies and try to satisfy most of the population of the UAE,” the CEO insists. “People are requesting Pakistani channels and regional Indian channels, so we always add channels. This sometimes means that new channels we have introduced before go off if they are not receiving the required demand from the public.”
What’s more, the opportunity posed by the deregulation of UAE’s telecoms market is imminent. This year, the government is set to lift restrictions on the monopoly held by Dubai Internet City (DIC) Telecom in areas such as Internet City, Media City and new residential developments. This sets the stage for Etisalat and E-Vision to seize more market share. So another high priority issue for E-Vision in 2006 is to optimise its networking technology for customer benefit.
While E-Vision began its foray into urban areas using traditional fibre wiring, communications technology has since advanced considerably — currently internet protocol television (IPTV) is the hot-contender for the means of carrying services in the future. Sahoo is well aware that the company’s current means of cabling causes setbacks because of the time it takes to implement. The CEO has also considered wireless technology but again, in some cases, this method has drawbacks.
“Two years back we introduced wireless technology, which can be deployed quickly, but after some time we decided this was not what we wanted to do — there can be issues about line of sight when a new building is built and it blocks it. However, Al Ain is an ideal place to use it as there are not that many high buildings,” explains Sahoo.
“We are now introducing IPTV and hopefully that can accelerate the reach of our network because we are using the existing copper cable that belongs to Etisalat, through a leasing deal.”
While IPTV is still under trial, Sahoo eventually hopes to cover the whole of the UAE in two years, perhaps even less.
“We just want to see how the new technology works — elsewhere in the world it has done fine and it should be fine here, but sometimes you need to adapt the technology for the local circumstances,” he adds. “The beauty of IPTV is that you can use the existing network.”
Since E-Vision prides itself on quality of customer service, IPTV may well provide an edge on the competition in terms of time-to-implementation and area coverage. However, Sahoo insists that the threat of competition is nothing new to E-Vision. “Since our inception, we have had competition. We have competed within all the platforms and partnered with them,” Sahoo explains.
“Our main competitors are the free-to-air channels. A lot of people in the Arab segment are not aware of the benefits cable TV can provide them. Also, there are large amounts of free-to-air Arab channels. It’s really challenging for us to go to the subscribers and persuade them of the benefits they can get from us.”
But, despite all the challenges ahead, the future looks bright. Sahoo is keenly aware that cable operators in the UK, such as NTL, are becoming very powerful.
“In the US, they have started offering telecoms services and Sky have done the same in the UK. Triple play — offering combined TV, high speed internet and telecoms — is a valid thing that most of the cable companies are doing, he says.
“It’s going to be very interesting to see how this market plays out. If you look at it from a customer perspective, they want a one-stop-shop for all their requirements. We are naturally going to be a force in that. The way to get customers is to provide triple play.”
And as for the debt problems that some, less lucky, UK cable operators have experienced — Sahoo is not concerned.
“We are launching at a much later time than the companies who had problems in Europe,” he says, “so we can look at the mistakes they made and avoid them. Even though it’s easy to say they all had problems, you should look at the end results.” And peering out from E-Vision’s current vantage point — it looks like those end results should be pretty good.||**||