MANILA, Philippines -- GMA Network Inc. is expanding its overseas television business, which is expected to contribute at least 20 percent of its net profit this year, by making inroads in cable TV in Europe.

“We have more room to grow overseas because we are a late-comer. There are plenty of areas where we can grow, like Europe. We’re talking about the whole of Europe,” GMA president Felipe Gozon said in an interview at the signing of a multisectoral cooperation agreement for the 2010 election counting yesterday.

Gozon said the network’s operations used to be mainly focused on direct-to-home TV but it recently got into the business of providing content for cable television.

GMA executive vice president and chief operating officer Gilberto Duavit Jr. said the overseas business, which began in 2005, was likely to grow by more than 80 percent this year and contribute 20 percent to 23 percent of the net profit this year.

The overseas business currently contributes 7-8 percent of gross sales and about 15 percent of net profit.

The GMA 7 model is not too imposing on the cost, Duavit said, explaining the big contribution to bottom line.

“The distribution is handled by carrier partners. Rather than set up our offshore operations, we’re partial to entering carriage agreements so our cost is limited to carriage and promotions,” Duavit said.

“The cost of carriage goes down over time because it’s a fixed cost. So the cost in the US, for instance, is only literally in cents per subscriber. The model works better than distributing via the expensive IPTV (Internet protocol television),” he said.

IPTV is a system where a digital television service is delivered using Internet protocol over a network infrastructure

“We’re satisfied with the progress we’re making,” Gozon said, noting an increase in overseas subscriber base by about 25 percent despite a global economic slump.

The company’s television programs are distributed outside the Philippines through its subscription-based international channels, GMA Pinoy TV and GMA Life TV, and through GMA Worldwide (Philippines) Inc. It has 217,000 overseas subscribers for Pinoy TV and another 112,000 subscribers for Life TV.

GMA Pinoy TV is currently available in the United States including Hawaii, Canada, Singapore, Japan, Guam, Europe, Saipan, Papua New Guinea, the British Asian Territory of Diego Garcia, the Middle East and North Africa.

GMA Life TV is available in the United States, Canada, Guam, Japan, Australia, New Zealand, Papua New Guinea, the British Indian Ocean Territory of Diego Garcia, 16 countries in the Middle East, 11 countries in North Africa, and 49 countries in Europe.