Cancelled nims positive for StarHub

Regulators’ decision to drop plans for the development of a common set-top box (STB) for pay TV raises entry barriers, says CIMB.

Singapore’s telecom and multimedia regulators have decided to drop their search for a standardised pay-TV
set-top box, dubbed Project Nims (next generation interactive multimedia applications andservices), as the bids would not have achieved the desired outcome.

There were issues preventing some of the proposals from gaining traction, including technology and business
constraints. It was supposed to be undertaken by NIMSCo to build, design and finance the project backed by grants from the government.

According to CIMB analyst Kelvin Goh, this will be positive for the incumbents, especially StarHub, since it would raise entry barriers for newcomers.

"Aspiring pay-TV operators would have to develop their STB rather than turn to a common one that would probably be supplied by OpenNet, " he said.

Nims initially was supposed to lower the barriers of entry and spur new players in the PayTV market while increasing content variety. With the cancellation of Nims, Goh notes that regulatory risk is now lower and the probability of higher dividends or capital management from StarHub has risen. The other risk cited by
StarHub is global economic uncertainties.

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