SingTel hits winning formula with EPL content

Adeel Najam/Frost & Sullivan
14 Oct 2009

In what is being touted as a major coup, SingTel has acquired the rights to broadcast the English Premier League (EPL) for the 2010/11, 2011/12 and 2012/13 seasons. This also includes the rights to broadcast ESPN, STAR Sports and STAR Cricket from mid 2010. SingTel will offer EPL on its IPTV based ‘mio TV’ service and also on its mobile TV and internet platform. By snatching ESPN Star Sports channels, the premium sports offerings of the FA Cup, AFC, Formula One, the Australian Open, Wimbledon, and the U.S. Open Golf Championship will also be exclusively available on SingTel’s platform. SingTel also plans to launch ESPNews a new 24-hours sports news channel in November 2009 on its mio TV service. This content acquisition is expected to result in a definite acceleration of subscriber uptake for SingTel’s mio TV service.

Frost & Sullivan expects the following impact

  • SingTel’s mio TV service would gain 360,000 subscribers by 2013 and is expected to have a pay TV market share of 46% by that time. As sports fans tune into mio TV, we expect SingTel to add 231,000 pay TV subscribers in 2010 alone. It will increase its pay TV market share from 17.7% in 2009 to 42% by the end of 2010. Of the 231,000 subscriber additions in 2010, 90,000 will be churned from Starhub (these subscribers will switch from Starhub to SingTel) and 100,000 subscribers will take up mio TV service for sports in addition to keeping their Starhub subscriptions in 2010. New subscribers to pay TV service (coming from new households and from free TV service households) will account for 41,000 new subscriptions for mio TV in 2010.
  • The sports content acquisition will enable SingTel to double its ARPU by 2013. SingTel’s mio TV ARPU is expected to reach $45 by 2013 and this will be very close to the current level of Starhub’s pay TV ARPU.
  • Starhub which will now face stiffer competition from SingTel and experience a decline of 68,000 pay TV subscribers in 2010.
  • The key risk for SingTel is that this costly investment will make it more challenging for it to turn its pay TV business profitable. On a conservative basis, with an ARPU of $28 for the EPL content, SingTel will be able to accumulate $164 million in the three years from mio TV. Adding revenues from internet and mobile TV platforms this can reach around $200 million. This is 43% below the estimated bid price of $350 million by SingTel for the EPL content rights. Other risks SingTel might face are consumer backlash and regulatory scrutiny.

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