The Lippo Group, through an affiliate company, plans to officially launch a satellite-based pay television service in July under the trademark of Big TV, an executive said on Friday.
The group’s expansion in the pay television business, through affiliate company Indonesia Media Televisi (IMTV), is expected to help boost pay television subscriptions in Indonesia, where only 5 percent to 10 percent of the population have signed up. Indonesia’s television market is still dominated by free-to-air services.
IMTV signed an agreement on Friday with Mitsui & Co. Asia Pacific, part of the Japanese diversified trading company, that paves the way for Mitsui to own a 5 percent stake in IMTV. There was no transaction value revealed, but IMTV’s total paid capital is worth Rp 85 billion ($8.76 million).
“We think that the Lippo Group is doing a great job in business in Asia, so we want to be a part of that,” said Makoto Serino, a general manager at Mitsui.
“Mitsui has [a lot of] experience in IT business in many countries, and now Indonesia is one of the growing countries in the IT area, which is why we want to [invest] in this division of the Lippo Group.”
Mitsui, which bought the 5 percent stake from an existing stakeholder, is expected to bring technological support to the Indonesian company.
IMTV is 60 percent owned by Multipolar Media Prima, a company fully owned by Multipolar Technology, which in turn is a wholly owned subsidiary of Multipolar, a diversified investment holding firm of the Lippo Group. The Jakarta Globe is affiliated with the Lippo Group.
Established two years ago, IMTV launched a satellite in May last year, as part of the plan to roll out Big TV, the satellite-based pay television service that will be officially launched this July.
Big TV will compete against existing players such as Indovision, TOP TV, OkeVision, TelkomVision, Yes TV and Aora TV.
Felix Alichandra, the IMTV chief executive, said on Friday that he hoped Mitsui’s expertise in technology and global business network would prove beneficial to IMTV.
“We hope access to Japanese content should be easier too,” he added.
He said Mitsui’s stake would be limited to 5 percent for now, because Indonesian regulations limited foreign ownership in domestic media holdings to 20 percent.
Fifteen percent of IMTV is already owned by Link Net, whose majority shareholder is CVC Asia Pacific Limited, an international private equity firm.
“What would happen next is capital injection. Mitsui has said it will [provide] whatever capital injection is needed. It’s their commitment,” Felix said.
The presence of satellite-based pay television also complements Lippo’s First Media pay television service, a cable-based television and Internet provider.
Felix said Big TV was targeted at middle and lower-middle income subscribers.
“First Media is designed to serve big cities, through cable, while IMTV is directed to reach everywhere across Indonesia where cable can’t reach,” he said.
“Economic growth acceleration in eastern Indonesia, outside Java, has resulted in demand for entertainment and education that we can provide.”
Big TV aims to reach 1 million subscribers within its first year of operation. The service will offer up to 300 channels.
On Friday, First Media and IMTV signed an agreement with MP & Silva to secure the rights to broadcast English football games from the 2013 to 2016 Barclay’s Premier League seasons.
First Media, by the end of 2012, had about 291,000 subscribers, an increase of 52 percent from the 191,000 subscribers it had a year earlier.