NEW DELHI: The Indian TV industry, the biggest category in the country's advertising and media sectors, is set to experience consolidation in 2012, helping tackle the current extreme fragmentation.

Reliance, one of India's largest conglomerates, has just allied with broadcaster Network18 to take over Eenadu, the regional TV firm. As a result, Reliance will receive preferential access to Network18's 25 stations for its forthcoming 4G broadband service.

"Our focus entirely now is to step up the profitability of our broadcasting operations," said Raghav Bahl, founder of Network18 Group.

Last week, Oswal Green Tech, the chemicals and fertiliser specialist, bought a 14.2% stake in NDTV, and Disney is in the process of buying the 49.6% share of UTV Software Communications, which runs seven TV channels, that it does not already own.

Reliance Capital also took an 18% stake in Bloomberg UTV, the news station, in 2011, and Jehil Thakkar, head of KPMG's media and entertainment practice, predicted trends will gather pace.

"Going forward, media companies will look at building a portfolio of broadcast assets across genres, geographies and languages to create a national setup," Thakkar told the Economic Times.

"The overall multiples for media companies have been low for a while. This is a good time to buy. Broadcasting does present a good opportunity."

One contributor to the sector's growth should be recent legislation outlining plans to digitise the entire cable network by 2014, anticipated to yield higher subscription revenues, more precise audience measurement and lower carriage costs.

"This will be a game-changer for the television business if well executed," Sunil Lulla, CEO of Times Television Network, parent of the Times Now, ET Now and the Movies Now stations, said.

Ernst & Young, the business services provider, estimates there are more than 600 TV channels on air, and over 100m pay-TV households in India.

PricewaterhouseCoopers, another advisory firm, believes TV revenues will rise from $5.7bn to $11.4bn from 2011–15. By the latter date, distribution will deliver 62% of returns, with advertising on 33% and content on 5%.

"There is clearly a need for sellers to look at strategic investors. For the buyers, in the long term there is value in Indian media," Nikhil Vora, managing director of IDFC Securities, the research group.

Data sourced from the Economic Times; additional content by Warc staff