A 1.14% stake of Indian multi system operator (MSO) Den Networks has been bought by Reliance Strategic Investments, a subsidiary of Reliance Industries (RIL).
"This may be the beginning of strategic investments in cable distribution companies as they will need huge sums to invest in digitisation, as mandated by the government," Devendra Parulekar, partner at Ernst & Young India told the Economic Times.
The cable digitisaton of India's metros is set for June 2012. Then, cities with a population of one million are to be digitised by 31 March 2013. Remaining urban areas are set to follow by 30 September 2014, while the entire country's cable network is due to be digitised by 31 December 2014.
The investment in Den follows the recent sale of RIL's stake in the Eenadu regional TV channels (which operate under the ETV brand) to TV18 Broadcast, part of the Network18 media conglomerate. The deal will provide RIL with preferential access to content from both Network18 and its subsidiaries, such as TV18 channels and a host of digital media assets.
Den Networks, along with Hathway, are the only two listed cable distribution companies in India.