| Chandra: All channels open
Mumbai, Sept. 29: Zee Telefilms is planning to uplink its television channels from India, a move that will enable the media house to expand its advertising clientele.
The company’s board approved the proposal and said it will start broadcasting Zee TV and Zee Cinema channels from India. “The company has obtained permission of ministry of information and broadcasting,” Zee said in a notice to the Bombay Stock Exchange.
Zee TV is the flagship channel of the group, while Zee Cinema is one of the most popular movie channels.
Analysts say the proposal will help Zee get companies that had so far stayed away because of government stipulations to beam their advertisements on the channel. Earlier, only firms with export earnings could advertise on Zee TV; those with negligible export income could not.
The development comes at a time when Hindustan Lever has begun advertising on Zee Network. Industry analysts say the entry of Lever, which has an annual advertising budget of Rs 750-Rs 800 crore, will prove to be a boon.
Meanwhile, Zee is considering divesting its loss making businesses, E-Connect and Zee Interactive Learning Systems (ZILS).
It had started this portal business as part of e-connect. The downturn in information technology due to the dot-com bust left it with accumulated losses of Rs 20.7 crore as on December 31, 2002.
The foray into the education services business, through Zee Interactive Learning Systems (ZILS), faltered due to the software slowdown. It piled up losses of approximately Rs 40.5 crore on December 31, 2002.
Zee, realising that these businesses no longer fit into its long-term strategic plans, will write off Rs 61.2 crore to make up for these losses, provided the board approves it.
Sources say the process has already begun. It will be completed under the supervision of Bombay High Court. The company management revealed this information at its recently held annual general meeting.
Zee will also spread its risks by investing in conditional access system (CAS) as well as DTH, and it believes both systems have a future in the country. Implementing conditional access system will help address the problem of under-declaration of subscribers by cable operators and distributors.
Zee Telefilms chairman Subhash Chandra said Rs 200 crore will be invested over two years in conditional access system and direct-to-home services. The company’s DTH services will be launched next month.
Siticable, a wholly-owned subsidiary of Zee, has already made the requisite investments in CAS-supporting technology by setting up aerial digital head-ends.