Entertainment Network India Limited (ENIL)

Hi Donald,

Thanks for your words of appreciation. I look forward to a strong critique/counterpoints to my arguments to take a more balanced view. I think you have focused on two very important points that can have large impact on the business.

On Phase III- Phase III auction is to be conducted in two batches. Batch 1 consisted of largely metros, category A and B cities (i.e. larger ones) while the Batch 2 will consisted of category C & D town. Thus, Batch 1 effectively symbolizes larges advertising markets while Batch 2 will mean smaller markets but wide reach. The current status is Batch 1 auctions are over and results are out. In batch 1, 3-4 players have adopted different approaches/strategies in bidding. ENIL seemed to have focused on strategy where they have worked with two objectives
1) To gain second frequency in most of it’s existing market
2) Expanding the reach in key areas of north & north-east

So, the key points to focus for us
– How well ENIL be able to capitalize on second frequency especially when other players in those markets may have idle inventory (we need to understand inventory position of other players/competitors in those markets and then understand the ability of ENIL to fill up it’s inventory for second frequency either through differentiated strategy or through brand pull
– What will be the benefit to ENIL due to increased reach in northern and north-eastern region

On the regulatory environment

• The clear evolution of regulatory regime /rationale and stakeholder expectation/observation – is available on MIB website through Phase I/ Phase II/ Phase III bidding norms and regulatory structure. Key points to focus should be
• How one time fee – reserve price is evolved
• Migration methodology
• Recurring license fee to be paid
• Licensing period
• Lock-in clauses

Here are the documents- Citywise_Migration_Fee_PhaseII_to_Phase_III.pdf (340.0 KB)First Batch_PhaseIII FM Auction Result.pdf (357.0 KB)Phase_II_Guidelines.pdf (181.9 KB)Phase III_Guidelines.pdf (520.8 KB)Phase III Auction_NIT.pdf (1.6 MB)

In addition, I am also uploading detailed investment note on ENIL that I have prepared which may give some perspective on industry/regulatory structure

ENIL_Investment_Note_03_11.docx (94.6 KB)

Hope this is helpful.