Due diligence for a cable operator in Asia–Pacific

The problem

Analysys Mason's Singapore-based team has extensive due diligence experience in the Asia–Pacific region, having been involved in almost all major TMT deals in the area during the past 5 years. In this case, a leading private equity firm asked us to support it in a high-profile USD2 billion transaction conducting strategic, operational and technical due diligence on a cable operator in Taiwan with more than one million subscribers.

The solution

Our first task was to assess the pay-TV market in Taiwan. Although the market was reasonably mature, operators have continued to increase their profitability in the last few years, largely through the take-up of cable broadband services for cable-TV subscribers.

Taiwan is one of the few markets in Asia–Pacific where the franchise structure means broadcasters operate in what amounts to a monopoly, with the National Communications Commission effectively controlling the introduction of all new initiatives. Clearly we needed to take this unusual situation into account, so we conducted interviews with key stakeholders in order to develop detailed scenarios that described the potential impact of different regulations.

Next, we conducted a more detailed operational and technical due diligence investigation. We carried out qualitative and quantitative assessment of both the positive and negative attributes of the target business, as well as investigating any new developments that could affect the deal.

Finally, we interviewed key technical staff on the management team and combined the interview findings with opinions from our internal experts to understand the likely requirements of new technologies and upgrades, all with the aim of future-proofing our conclusions.

The result

Thanks to our work, the client's investment committee had enough information to make an informed decision about the deal based on facts and rigorous analysis rather than opinions and reputation. In the end, Analysys Mason's applied intelligence, regional insight and analytical rigour, made a real difference and provided the client with a solid investment rationale.

The team

The Analysys Mason team was led by three of our most experienced people in the region; all three drew on extensive knowledge and experience of the Taiwanese cable-TV market, while their different perspectives and experiences lent a particular richness to their analysis.

Our team also has extensive experience of the media sector in the Asia–Pacific region, having worked on more than 30 projects between them. These have included business planning, developing content and convergence strategies, churn management, assessing content exclusivity and reviewing anti-competitive practices. This experience proved invaluable and prepared us for the issues we encountered on this project.