The man behind ABN

Finally the man himself has surfaced at Asian Broadcasting Network (ABN) though the market has speculated that ABN was his baby all the while. Tan Sri K.K. Eswaran (pic) is eager to take a slice of the broadcast and fast speed internet market but is up against giants like ASTRO, Maxis and Telekom Malaysia which has deep pockets and libraries of content. There is scepticism whether the venture can take off but he is confident he can make a difference as he educates, entertains and enrich the society with ABNxcess product offering.

He spoke to business editor (news) B.K. SIDHU for the first time since ABN was conceptualised and here are the excerpts of the interview:

There is scepticism about you and your business, why is that so?

I don’t know why they are sceptical but it could be because I had to sell off the Best World mall in Johor. We were building that into the biggest mall in that area and selling space at very high prices and the take up rate was very good but unfortunately the economic crisis crept in.

But I am doing business and every businessman who has come up in life is a nobody from the start and to get there involves a lot of hard work, loyalty and sincerity. I have been in business from the 1980s and I have seen the ups and downs of the economic cycles and the storms and I have survived. Now I am getting into a new business and not many people can do that and if they want to remain sceptical, so be it.

Why should someone subscribe to your services, what’s special about it?

Very simple. You are so used to seeing limited number of channels all this years, but I am bringing content that you have not seen before. And the variety is there. At start we have 100 channels to offer, and more later. Our facility in Puchong can cater up to 200 channels and by the time we move to Technology Park we can offer more than 500 channels.

So we will have the variety of channels to meet your requirements.

If you go to India, South Korea, Taiwan, Hong Kong and even the US, you will see the number of channels being offered are close to 500. So I am giving you a variety and at a price which is very affordable.

Over 50 channels and 10Mbps of high speed Internet for RM158.99 a month is certainly cheaper than buying a pack of cigarettes every day for 30 days and our pricing is much cheaper than what our competitors are offering. That is why we are so confident and if you see in all the different markets where there are so many players, yet they operators can still survive.

So my service will appeal as my content is varied and pricing is very affordable.

What makes you think you can succeed in the pay TV market when so many others have failed?

ABN, unlike previous failed Pay TV operators, operates on technologies used by Comcast of the US. Comcast has been in existence for several decades. The fixed network technology that we use will give us high TV household penetration and our platform is able to carry over 1,000 linear channels, and that simply means we have large bandwidth available on our network. We can offer so many services by just using the same cable. We will offer never seen before channels which makes up almost 50% of our channel offering at launch, and our platform has been proven to be the best for video services and is not affected by rain or network congestion issues.

But still ABN is a new player, no proven track record?

When our competitor came to the market what was their background? They also did not have a background in this business but they hired people and learnt the trade. We are new but we are also getting the right people to manage the business. And in this business you don’t need the track record like road or building contractors. Why look at track record? Look at the product and offering and technology. We are deploying our network and services on a proven technology.

You have content but not some of the more popular ones like StarMovies and CNN. Why?

Do you want to see the same news being repeated for 24 hours? They are repeating simply because that is what they have. But look at TV3 news bulletin, there is always something new, they are not repeating the same thing unless it is rare and something that the public must know.

We don’t have CNN because our competitor enjoys a monopoly on that channel when they signed the contract. Now there is another player in the market place so things may change.

We have so many other news channels and it would be good for consumers to explore new content rather than just stick to what they are used to. In this day and age, the consumer is king as we as operators will have to provide what consumers want. That is business but it is up to the regulator to ensure there is no monopoly of content.

What will you be doing to break the monopoly of content that Astro has?

ABN will be the first pay TV operator in Malaysia to launch with over 100 channels and 50% of ABN’s channels are never before seen channels in Malaysia. However, there is a need to ensure content is available on all media platforms and not limited to one. The Communications and Multimedia Act 1998 has clear provisions to ensure the industry does not operate in an anti-competitive behaviour such as signing rights for network platforms that you do not operate.

It is also important to ensure content is not over priced leading to cost being passed on to the consumers. In this regard, most content providers are happy to provide content on a non-exclusive basis as it means greater revenues in the long run.

Indonesia practices the policy of classifying certain international channels as essential content and thereby limiting the ability for a Pay TV operator to create content exclusivity for those channels. As Malaysia moves towards its own Vision 2020, it is important that anti-competitive behaviour is managed. And the government must seriously look at this since its agenda is to build a progressive society.

Content can be readily be downloaded for free on the Internet. How can you compete?

How much can they download for free? Our offer is at affordable prices and our technology is right, the speed is there and I don’t see why they will not subscribe to us.

The TV market segment is crowded and concentrated with a few players. What makes ABN thinks it can penetrate the market effectively?

We don’t think the TV market segment in the country is crowded. Singapore has 1 million TV households and can take 2 pay TV operators, Hong Kong has four players for 2.3 million TV households, do you think Malaysia with one satellite pay TV operator cannot take another player?

Will there is something for people on the go?

We also will have our over the top (OTT) services coming and you can watch your programmes on iPad and if you are moving, on your smartphones.

We will also launch video on demand, video and voice phone, interactive games, distant learning and anything imaginable on an interactive network like ours.

What has been the challenges faced in getting your service off the ground?

All businesses have challenges and the digital cable TV business is no different. The availability of contractors with HFC knowledge and understanding of the technology, and implementation methodologies by the Government authorities, vendors and customers are challenges any company like ours will face.

What will be your cash burn rate and for how long will the backers and bankers stomach your attempt to make a success of your business?

We have raised about RM500mil in funding for the first phase of its project and this is sufficient to fund it for the next 7 years. Our total project cost for the first phase over the next 10 years is over RM2.5bil and that includes HFC network coverage to over 5 million TV households. ABN’s bankers are comfortable with the gestation period for the investment and the pay back periods projected.

ABN has a licence for only 5 years, what happens after that?

Do you think the government of the day will not renew the licence when we are creating so much of employment and paying taxes?

When will ABN Mediapolis be ready?

By mid 2015 as we have recently signed a long term 80 year lease for a 30 acre site in Technology Park were the Metropolis will be located. It would be our hub for our broadcast centre, studios and auditorium.

The building will be huge but can I cannot share the financial numbers for now. Development will begin later this year.

Talent wise, who have you got for ABN?

We have a professional team led by our CEO Sreedhar Subramaniam and we have the chief technology officer from India, who has experience in this business. Sreedhar was with NT7 before and he is a known figure in the media world.

We have a full professional team and about 400 people. By year end would have a team of 600 people.

What do you do?

I oversee that everything is managed properly so I am very hands on.

What other business do you have?

Plantation via PINEHILL PACIFIC BHD, our listed company, which has oil palm plantations in Perak and Kalimantan. I have injected my 32.33% equity in ABN into the family company, Allgrow Capital (M) Sdn Bhd.

What business do you have in India?

I am a shareholder of a movie production house but I am selling down my stake to fully focus on ABN. I rather sit here than do business in India, it is a tough terrain. I am more keen to build the ABN brand here.


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