ITV

Tag: ARPU

  • India Ratings and Research says R-Jio’s tariff hike to support industry ARPU

    India Ratings and Research says R-Jio’s tariff hike to support industry ARPU

    MUMBAI: India Ratings and Research (Fitch Group) believes Reliance Jio Infocomm Ltd’s (R-Jio; ‘IND AAA’/Stable) decision to start charging Rs 0.06/minute through top-up vouchers on outgoing voice calls to other networks would improve its average revenue per user (ARPU) by about Rs 9 and EBITDA by 15 per cent to 18 per cent in FY20, assuming that usage/calling pattern remains the same and the zero interconnect usage charge (IUC) regime is postponed beyond its scheduled date of 1 January 2020. However, the levy of additional charges by R-Jio will discourage users to call other operators from R-Jio, possibly leading to lower voice traffic on R-Jio network and hence could constrain the telecom giant’s actual EBITDA benefit at 8 per cent-10 per cent.

    Also, Vodafone Idea Ltd (Voda-Idea; ‘IND A+’/Negative) and Bharti Airtel Ltd (Airtel) may see lower incoming calls on their network, which may impact their net interconnect user charge (IUC) income, which stood at 3 per cent and 10 per cent of total revenue for Airtel and Voda-Idea, respectively. Furthermore, Voda-Idea and Airtel may continue to lose their subscribers to R-Jio as the pricing arbitrage (i.e. outgoing voice calls to other network being free on R-Jio and chargeable for other operators) is removed. On the flipside, R-Jio’s tariff-hike may give Voda-Idea and Airtel an opportunity to increase their tariffs and repair their balance sheets. However, Ind-Ra believes the benefits for Voda-Idea and Airtel would be short-term and the marginal recovery of around 10 per cent in ARPU may not help in addressing the unsustainable debt levels, and improve credit metrics. Ind-Ra has maintained a negative outlook on the Indian telecom sector due to intense competition, elevated debt levels and continued reliance on capital infusion for debt servicing and capex.

    Network Imbalance Higher for R-Jio: In Q1FY20, outgoing calls as a proportion of total offnet minutes of usage (MoU) for R-Jio, Voda-Idea and Airtel stood at 64 per cent, 41 per cent and 45 per cent, respectively. Also, of the total offnet voice traffic, net incoming MoU as a proportion of total offnet MoU stands at negative 29 per cent for R-Jio whereas the same is 9 per cent and 19 per cent for Airtel and Voda-Idea respectively, implying that network voice traffic imbalance is significantly higher for R-Jio compared with peers. Hence, R-Jio remains a net-payer of IUC expenses, whereas Voda-Idea and Airtel are net-receivers of IUC receipts. The move by R-Jio to start recovering IUC from customers would address R-Jio’s concerns that the zero IUC regime may get postponed by Telecom Regulatory Authority of India beyond its scheduled date of 1 January 2020.

    Eventual Benefit Contingent on Many Variables: Estimating the impact of R-Jio’s levy of IUC charges on ARPU and EBITDA is tricky given that it may lead to a change in usage and calling pattern. The impact on Airtel and Voda-Idea’s financials is yet to be seen given that they have not yet announced their strategy in response to R-Jio’s move.

    Broader Impact on Industry Tariffs: R-Jio’s tariffs have been 25 per cent-30 per cent lower than those of Voda-Idea and Airtel since the last two years, which has kept the competition intensity high. However, after falling steadily over the last 2.5 years, data tariffs (expressed in terms of GB per user per month) rose 11 per cent-17 per cent during October 2018-February 2019, and have been stable since then. Ind-Ra believes the industry-wide debt levels are at unsustainable levels and a marginal recovery of 10 per cent in ARPU may not help in improving the credit metrics. Telcos will continue to rely on external funding to support their debt servicing and elevated capex requirements. Any investment in spectrum acquisition or 5G technology may derail this fragile recovery. 

    Estimation of Impact on IUC Changes

     

    Bharti Airtel

    Voda-Idea

    R-Jio

    MoU (million minutes, total offnet and onnet)

    737,108

    676,259

    785,970

    Outgoing calls ( per cent of offnet MoU)

    45

    41

    64

    Incoming calls ( per cent of offnet MoU)

    55

    59

    36

    Net incoming MoU ( per cent of offnet MoU)

    9

    19

    -29

    Access charges – Net reporteda (INR million)

    2,500

    3,800

    -8,510

    Offnet MoU as  per cent of total MoU

    60.1

    50.4

    63.3

    EBITDA (1QFY20, INR million)b

    84,926

    36,500

    46,700

    IUC charges (as  per cent of EBITDA)

    3

    10

    -18

    a Access Charge data for Airtel taken from Bloomberg.
    b EBITDA for Voda-Idea not adjusted for AS-116 benefit of INR22.2 billion.
    Source: Ind-Ra, Company and Bloomberg
  • Reliance Jio to maintain ARPU lead over Airtel, Vodafone Idea

    Reliance Jio to maintain ARPU lead over Airtel, Vodafone Idea

    MUMBAI: Indian telecom company, Reliance Jio, is most likely to maintain its lead on average revenue per user (ARPU) over its rivals Bharti Airtel and Vodafone Idea. The telco’s strategy in the market has paid off well by selectively choosing an inordinate share of 4G smartphone users and continuing to attract them with reasonable high-end voice and data offers.

    However, on Wednesday Jio posted a fall in its ARPU to Rs 131.7 for the July-September period from Rs 134.50 in April-June and from Rs 156 a year back. This was the third straight quarterly dip in ARPU for the telco but still anticipated to fare better than Bharti Airtel and Vodafone Idea, which stands with an ARPU at Rs 96 each.
    For the time being, Reliance Jio exhibits an average 35 per cent more ARPU than its rivals, Airtel and Vodafone Idea.

    Speaking to Economic Times, Bharti Airtel former CEO Sanjay Kapoor said, “While Jio’s strategy was centred on garnering and retaining high-paying subscribers, its rivals dominated the lower paying subscriber markets”.

    Further explaining, “Incumbents, on the other hand, have a reasonably large number of customers, in the featurephone segment, who are voice-only users and have extremely low ARPU of less than Rs 30,” added Kapoor.

    And according to Kapoor, Jio is the current thought leader of the market and is likely to determine the future ARPU trends in the Indian telecom market.

    KPMG head of technology media and telecom Mritunjay Kapur explained that Jio has been trying to maintain its ARPU and most probably will continue to have ARPU higher than the current industry average based on its voice, data and media & entertainment strategy.

  • Airtel gets regulatory approval to offload 15% from DTH arm to Warburg Pincus

    Airtel gets regulatory approval to offload 15% from DTH arm to Warburg Pincus

    MUMBAI: In a regulatory filing Bharti Airtel said that its DTH arm Bharti Telemedia has received the government’s approval for the transfer of 15 per cent stake to private equity firm Warburg Pincus. The approval has been granted by the Ministry of Information and Broadcasting.

    Earlier the telecom player said it plans to sell 20 per cent stake in its DTH arm to an affiliate of Warburg Pincus for about $350 million. The deal was announced in December 2017.

    “Bharti Telemedia Ltd, a subsidiary of the company, has been granted the approval dated 28 August 2018, from the Ministry of Information and Broadcasting for transfer of its 15 per cent stake to an affiliate of Warburg Pincus,” Bharti Airtel said.

    However, of that total 20 per cent stake while 15 per cent stake is from its DTH arm, the balance 5 per cent stake will be sold by another Bharti entity. Though the approval of 15 per cent has been mentioned in the filing, as per a Press Trust of India report the entire deal has received the clearance.

    Airtel Digital TV faces new challenges. Reliance Jio has announced it will offer a set top box for TV when it launches ultra-high speed fibre-based broadband services setting up competition in the DTH sector. If Jio comes up with aggressive pricing it will again put pressure on the average revenue per user of existing DTH players.

  • Siti Networks operating EBITDA up by 146% at Rs. 549 million

    Siti Networks operating EBITDA up by 146% at Rs. 549 million

    MUMBAI: SITI Networks has released its Consolidated Financial Results for Q1FY19, ending June 30, 2018.

    In line with SITI’s Profitable Growth Strategy, SITI has maintained persistent elevation in Operating EBITDA reporting 146 per cent growth over first quarter of last fiscal. SITI reported Operating EBITDA of Rs.549 Mn in Q1FY19 as against Rs.223 million on Y-o-Y basis.

    The company’s Operating EBITDA Margin expanded by 892 bps to ~17 per cent. This has been driven by Subscription Revenue surge of 26.3 per cent to Rs. 2,149 million and nearly flat growth in expenses.

    SITI has initiated a country-wide monetization increase program in June 2018. This has resulted in a 17 per cent increase in ARPU. The Company has also improved its subscription collection efficiency, surpassing 93 per cent in June 2018 exit, which has further risen to 97 per cent exit July’18.

    The Company’s active digital subscriber base also reached 11.7 Mn by end of the first quarter with 3.5 lakh fresh additions. The company now serves ~55 Mn+ consumers in ~580+ locations across the country. SITI’s HD base also increased to 3.56 lakh by adding 41,000 subscribers in the quarter.

    In preparation for the New Tariff Order, SITI is working on Smart Tiered Packaging to offer customers bespoke options and great value. This will further help SITI in implementing the New Tariff Order regime later in this fiscal. The Company has undertaken significant technological and process enhancements for its Subscriber Management System while initiating training and education modules for all stakeholders on the New Tariff Order.

    As an Industry first, SITI implemented the “eMIA Initiative” to ensure digitization of agreements with all partners.

    To drive employee engagement and enhance operating efficiencies, SITI launched a customized app for its employees called “My SITI”. This has helped to promote a high-performance culture across the organization through real-time monitoring and evaluation of various operational and strategic parameters. With a clear focus on last mile connect, a customer engagement application is under beta testing phase which will provide real-time details of consumer package, profile information
    & social connect.

    While commenting on the results, SITI Networks chief business transformation officer Rajesh Sethi said, “SITI had a great start to FY19 with strong improvement across all operational metrics. Our “Customer First” strategy helped drive superlative 146% Operating EBITDA growth coupled with expansion of 892 bps in the margins.

    While we increased our Subscription Revenue nearly 26 per cent year on year, we have further initiated an ARPU increase program and the results will be visible in the coming Quarters.

    With the New Tariff Order notification, we are well positioned to move to the new regime. Our systems and processes are ready for this seismic transformation of last mile operations.

    In FY19, we intend to drive efficiencies along with solid EBITDA and Margins growth, in line with our core strategy of profitable and sustainable growth.”

     

  • Hathway plans to seed 2.5 lakh high definition set top boxes in FY19

    Hathway plans to seed 2.5 lakh high definition set top boxes in FY19

    MUMBAI: Going along the lines of FY18, broadband and cable TV service provider Hathway Cable and Datacom is planning a Capex of Rs 310 crore in FY19. In addition to that, it plans to seed 2.5 lakh high definition (HD) set top boxes (STB) in FY19. The company had 2.16 lakh HD subscribers at the end of March 2018.

    While in FY18 Hathway spent Rs 225 crore on broadband business and Rs 85 crore on the cable TV business, the company has a similar planning of expenditure in both the business for FY19. The company had 7.2 million cable TV subscribers along with a broadband subscriber base of 0.8 million.

    “In FY18, we spent around Rs. 225 crore in broadband capex and around Rs. 85 crore in video business capex. We intend to spend similar capex in FY2019 as well. In terms of addition of consumers, we have seen good momentum so we are confident that this momentum will continue in FY2019 as well,” Hathway Cable and Datacom MD Rajan Gupta told analysts during an earnings call.

    The company is focusing on four key markets including Maharastra, Mumbai, Karnataka, Bengaluru, Hyderabad, and West Bengal.

    Due to the inability to implement the Telecom Regulatory Authority of India’s (TRAI) upcoming tariff order and regulations, a number of MSOs may collapse. Taking the opportunity, company is looking to acquire customers of MSOs to increase market share. Along with increase in market share, increase in average revenue per user (ARPU), HD STB seeding will play key role in the subscription revenue growth in next fiscal year.

    More importantly, Gupta revealed that the company has closed content deals with broadcasters for FY19. While net increase in content cost for FY19 will be Rs. 40 crore, however, there will be no increase in content cost for two to three large broadcasters.

    Also Read:

    Hathway CFO Vineet Garg resigns

    IndiaCast, Hathway fail to concur on carriage, subscription fees

  • Airtel to issue single bills to DTH, post paid & broadband customers

    Airtel to issue single bills to DTH, post paid & broadband customers

    MUMBAI: Bharti Airtel is creating a new way to increase its average revenue per user (ARPU) that involves an integrated payment solution combining the bills of DTH, broadband, fixed line and postpaid mobile, as per a report in Livemint. It is also likely to give a 5-10 per cent discount on the integrated payment.

    The report quotes the source as stating that the bundling will do away with the hassle of multiple bill cycles and will increase loyalty. The move comes against the backdrop of Reliance Jio’s disruption. Livemint states that the test is currently on in Hyderbad and the first launch will be in seven to 10 days in some southern cities.

    Jio has also mentioned that it will look at bundling its services like 100 mpbs connection, JioTV and VoIP. Airtel is looking at increasing its investment in the broadband segment where it also bundled its OTT apps Wynk Music and Airtel TV.

    Airtel Digital TV boasts of 14.2 million customers with an ARPU of Rs 228.

  • Aim to take phase 3 ARPU to phase 1 value: Den Networks’ SN Sharma

    Aim to take phase 3 ARPU to phase 1 value: Den Networks’ SN Sharma

    MUMBAI: Den Networks has an ambitious plan charted out for its cable and broadband business for the coming two to three years. In an interview to Bloomberg Quint, Den Networks CEO SN Sharma highlighted the company’s plan to increase revenue and subscription.

    For the multi-system operator (MSO), digitisation of phase III in India was almost over 10 months ago and certain parts of phase IV were left by all operators. Sharma said that it may take six to eight months to wind this up. “In the last 12 months, we seeded close to five million set-top boxes (STBs) in phase III. Today, we have a tall figure of 11.5 million digital homes out of which 8.5 million are paying,” he said.

    The average revenue per user (ARPU) for Den has gone up substantially over the last two years. Even tier I and II towns had low ARPU of Rs 120 and Rs 80-90 a year ago. Two years ago, the ARPU for tier I and II towns was Rs 60-70 and Rs 50-60, respectively. Today, the ARPU is at Rs 144 for phase I and Rs 112 for phase II. Sharma also said that the company was able to make up 50 per cent of the subscription revenue from the cable operators from phase I while this was 40-45 per cent in phase II markets.

    Phase III ARPUs are still low at Rs 76 out of the ground rate of Rs 150-175. “As we move forward, cable operators know they have to catch up with phase I ARPUs and will gradually increase it with subscription and, accordingly, the same will be shared with us,” he added.

    The aim is to take the current ARPU of phase III up to Rs 144 in two years’ time. “The phase I journey has been successful and a confident path has been set. There is no reason this Rs 76 doesn’t move to Rs 140 level in 2-2.5 years’ time,” he said adding that 50 per cent of the digital universe was phase III and IV. Phase IV ARPU stands at Rs 66.

    Den is talking to broadcasters and peers to increase subscription levels in phase I areas and Sharma said that discussions were actively progressing. “There is headroom to increase this [subscription]. You will see changes in bouquets and packages offered so overall revenue can be taken up,” he shared.

    One of the ways to do this will be by focussing on HD STBs now. The target for the next 12 months is to convert 10 per cent of its SD base into HD, which will allow the MSO to add another Rs 60-70 per box. Another way is by gradually increasing the number of boxes seeded in phase IV that is currently at the rate of 40,000-50,000 a month.

    The company has a system to ensure that all reported boxes are activated. When a box doesn’t yield payment for more than three months, it is removed out of the declaration and considered a dead box. Here, Sharma lauds the system for being as efficient as telecom operators that withdraw service  if a subscriber doesn’t pay.

    The entrance of players like Jio, Airtel and Vodafone has definitely changed the broadband game for the company and Sharma admits this. Den’s broadband ARPU is currently Rs 550 with a speed of 50 mbps and unlimited data. He compared it to telcos who offer just 1 gb data a day with best case speed of 9 mbps.

    Over the years, data consumption on its platform has increased from 20 gb two years ago to 60 gb last year and is hovering at 80 gb today. “There is a data explosion courtesy Jio, Airtel and Vodafone. We are consciously aware of it and so we talk of unlimited data in high speed,” he said.

    Much of its broadband business is concentrated in Delhi with 2 lakh subscribers. However, the tariff war pulled down its ARPU to Rs 600. But the same in Kanpur is Rs 800. The plan is to increase subscribers by 6 lakh in three years taking the total to about 8 lakh.

    Sharma is confident that the entire business needs external funding since it is witnessing healthy growth in subscription and ARPU and no subsidy is being offered on HD boxes. Even the broadband business has been fibre infrastructure. About Rs 100-120 crore will be required for the coming three years, which will be managed through internal accruals.

    Also Read :

    Subscription revenue drives up Den’s PAT

    Den Networks appoints Himanshu Jindal as CFO

    TDSAT rules in favor of DEN Networks, directs ZEE entertainment to provide channels on RIO basis

     

  • Tata Sky aims to drive up ARPU with international content

    Tata Sky aims to drive up ARPU with international content

    MUMBAI: Direct-to-home (DTH) service Tata Sky has launched its newest offering, Tata Sky World Screen—a handpicked bouquet of international entertainment content available from 16 March 2018. 

    Tata Sky World Screen will feature prime content from across geographies and multiple languages (Arabic, Russian, Spanish, Belgium, Israel, Cuba, German, French, Italian, Portuguese, Hindi, Swahili, Japanese, Chinese and Korean). Non-English content will have subtitles and some will also be dubbed in English. The ad-free service will allow subscribers to view select series and movies from across the world round the clock. 

    “Content like this is not just interesting to tier 1 and 2 cities but also to tier 3 and 4. People are willing to pay if they get the right product. The way we distribute our content has a greater chance of reaching hinterlands as well. Digital is more relevant in promoting this content than any other product,” said Tata Sky chief content officer Arun Unni.

    “We focus on both ARPU (average revenue per user) as well as increasing the subscriber base. The average industry ARPU is Rs 270-300, our ARPU is a bit higher than the industry figure,” he added.

    Priced at Rs 75 a month, the content will be available to subscribers on their TV sets through the set top box, mobile app and the web app of Tata Sky.

    “Our analysis indicates that consumption patterns are evolving, and there is an audience looking for exciting and diverse content, unconstrained by language. The objective here is to give consumers the content that is not easy to discover and consume. Our handpicked list includes some of the most popular and critically acclaimed movies and TV shows across the world, a lot of which has never been seen on TV before in India,” added Unni.

    Amongst the TV series premieres will be the acclaimed thriller Wallander, Happy Valley, Code 37, Team Chocolate, Prisoners of War and Babylon Berlin. There will also be two movie premieres a month from world cinema. 

    In another partnership, India’s premier youth entertainment portal 101India.com partnered with Toronto based media giant QYOU Media for its newly launched service on Tata Sky, The Q India. The localised service will showcase premium digital content curated from popular content creators and broadcast it on TV.

    Also Read :

    Tata Sky woos new customers with free Star Sports channels

    The party continues on Tata Sky Mobile app

  • DTH’s year of consolidation

    DTH’s year of consolidation

    MUMBAI: It would be safe to say that this was the year of the big DTH challenge. India’s cable TV multi system operators (MSOs) could not go into many phase IV areas and DTH stepped in wherever analogue broadcast signals were switched off following the crossing of the digital addressable system (DAS) deadline. Whether it was Tata Sky, FreeDish, Videocon d2h, Airtel Digital TV, Sun Direct or Dish TV, they all played a part.

    The going, however, was not as smooth as it could have been. High capex and opex and low ARPUs continued to dog the video distribution vertical making it an extremely low or no-margin business. While in the early days customer acquisition was the driver for most distribution platform operators, currently their eye has been on cost-efficiencies. This was evident from the ongoing overtures three of the players were making to others. Dish TV and Videocon d2h were already going through the throes of merging, the Anil Ambani-owned Reliance Big DTH was shopping around having conversations with almost every player, and there were talks of Airtel and Tata Sky possibly getting into bed with each other.

    The first nearly came to pass in 2017 with the two companies getting clearances from all quarters—government, courts and company law board—but getting stuck over the year end because of a technical difficulty. Reliance Big TV was sold to an IT and electronics company Veecon that sells security scanners and tablets–the wealth of its promoters is rumoured to be from selling religious lockets. Veecon said it would renew the Big TV licence by giving the requisite bank guarantees and ensure TV continuity for its approximately 1.2 million customers and jobs for nearly 500 people. It also announced that it would take Reliance Big DTH free to air (FTA) and announced a partnership with Sri Adhikari Brothers to launch a clutch of channels that would prove to be drivers of the platform. How Veecon will pay off Big TV’s payments to broadcasters was not clear at the time of writing and will decide whether the platform will ever take off.

    However, its announcement came at a time when the government had shut the door for private broadcasters and DD FreeDish, which had shown gee whiz growth rates, had come up as a powerful DTH player. New Ministry of Information and Broadcasting (MIB) minister Smriti Irani refused to make channel renewals for which several broadcasters took it to the Telecom Disputes Settlement Appellate Tribunal (TDSAT). An interim order gave the channels, whose licence was soon to expire, relief that they could continue by paying similar prices till Prasar Bharat came up with an alternative proposal and a convincing explanation to throw out private TV channels off DD Free Dish. It is expected that Prasar Bharati will formulate its new policy akin to the FM radio auction wherein 50 per cent of revenue is shared, apart from the bid amount, in e-auctions. Talk internally is that none of this would happen and DD Free Dish is most likely going to be used solely to relay government channels.

    Media reports also said sometime in the second half of the year that there could be more synergies between the Tatas and News Corp-promoted Tata Sky and Airtel Digital TV with possible merger talks taking place. That hasn’t happened as of now but the Airtel group did end up buying out certain telecoms asset of the Tatas.

    Also, private equity firm Warburg Pincus announced its decision to own 20 per cent stake in Airtel Digital TV for $350 million, leaving 80 per cent with Airtel’s promoters. That valued the Mittal-owned DTH service at a whopping $1.7 billion, which was mouthwatering news for the DTH pioneers. By September, Airtel claimed ownership to 14 million subscribers with revenue of $550 million.

    The year was significant for the fact that the DTH operators led by Tata Sky and Airtel Digital decided they had to take a tour of the court. The Harit Nagpal-led operator challenged the Telecom Regulatory Authority of India’s (TRAI) order on tariff and the reference interconnect regulations. The order stated that all stakeholders must abide by rates fixed by broadcasters. Joining Tata Sky in court was Airtel.

    Dish TV, the oldest DTH player in the country, appointed Anil Dua as its new CEO even as the company’s integration with Videocon d2h was on the anvil. Dish TV’s CMD Jawahar Goel raised an alarm over Star India’s monopoly in cricket events that, after its acquisition of the rights for the Indian Premier League (IPL), would force DTH players to include Star Sports channels and result in the broadcaster pricing the sports channels exorbitantly. No government reaction was forthcoming on this issue. Dish TV also took Star channel Life Ok to the TDSAT claiming that it could not rebrand itself as an FTA from a pay channel without sufficient intimation. Life Ok is today Star Bharat and a leading channel in BARC viewership ratings, riding on the expanded viewership courtesy Doordarshan’s FTA KU-band platform called DD FreeDish.

    For the quarter ended 31 March 2017, not only did subscriber additions dip drastically, but were also the lowest for a quarter in the financial year 2016-17. Airtel, Dish TV and Videocon saw total addition of just 8.33 per cent to 41.13 million for the concerned financial year. By 30 September 2017, there were just 2.47 million additions to the DTH industry as per TRAI, which was way below the 3.37 million it gained in the same six months in 2016. Moreover, active subscribers added in the July-September quarter were just 0.78 million, half of the figure from the corresponding quarter a year ago. Dish TV, Airtel DTH and Videocon d2h make up 63-65 per cent of the total active subscribers while Tata Sky holds about 21 per cent and Sun Direct 11 per cent. DD Free Dish is estimated to have 22 million subscribers and is expected to touch 40 million in two to three years.

    The second half of the year saw the introduction of the goods and services tax (GST) that gave a breather to those consuming cable and DTH services. Whereas customers once paid anything between 10-30 per cent as entertainment tax as well as a 15 per cent service tax, it was now fixed at 18 per cent. The Punjab government also announced that it would be adding a new entertainment tax to cable and DTH connections with the latter having to bear Rs 5 a month.

    Sun Direct is a major DTH player in the south holding about 40 per cent of the area. It also makes up 97 per cent of its total subscribers. Sun Direct took up an HEVC media solution from Harmonic to increase its HD channel number to 80.

    Profit after tax (PAT) for Videocon stood at Rs 168 million for the quarter ended 30 September 2017, which was just Rs 12 million for the previous quarter and Rs 148 million for the corresponding quarter a year ago. Dish TV, however, was in the red with net loss of Rs 178.7 million for the quarter as against PAT of Rs 689.6 million for the same quarter a year ago. During the quarter ended 30 September 2017, Airtel reported PAT of Rs 12,990 million down from Rs 27,350 million from a year ago.

    Videocon d2h and Airtel showed good average revenue per user (ARPU) numbers in 2017. The former raked in Rs 212 for the quarter ended 30 September 2017 from 13.25 million subscribers (a 0.21 million increase from the previous quarter). The ARPU for the previous quarter was Rs 198 while a year ago quarter was Rs 209. Dish TV’s ARPU for the same quarter was Rs 149, a rupee higher than the trailing quarter. It had a total of 15.1 million subscribers. ARPU for Airtel Digital TV stood at Rs 233 in the respective quarter, up from Rs 228 in the previous quarter and Rs 232 in the year ago quarter. Tata Sky does not release its financial numbers but analysts pinpoint its ARPU to be close to Rs 300.

    Dish TV introduced numerous value-added services (VAS) to encourage more viewers such as the Dance Active and Disney Active series, cardless STBs, 32 educational channels under Swayam Prabha. Early on in the year, it cut the rate of its base pack to Rs 33 a month to counter the free services by DD Free Dish. It even went to the extent of allowing people to curate their own packs by picking individual channels. Dish TV added 23 channels, which included nine HD ones.

    Tata Sky came up with a Make My HD pack for as low as Rs 30 per month and a regional HD Access pack at Rs 50 per month for users subscribed to regional SD channels. The channel targeted the south market with a South special pack at Rs 290. Dish TV campaigned for HD in all homes by removing the access fee on it and advertising a cost as low as Rs 169 per month (excluding taxes). Countering DD Free Dish, the oldest DTH player also introduced an FTA pack with a price translating to Rs 32 a month.

    On the technology front, Airtel’s hybrid STB was officially the first to launch in the market, bringing to consumers the best of both worlds–satellite channels and content available on the internet. The STB also came preloaded with Netflix and YouTube allowing even a regular TV to turn ‘smart’ courtesy an inbuilt wi-fi feature and Google voice search. Dish TV launched its new card-less security feature with Verimatrix as well as an artificial intelligence-enabled chatbot called ADI.

    For the coming year, the industry will likely see the outcome and growth of the first merger between Dish TV and Videocon and the synergies they bring to the industry. FreeDish is expected to be a big player in the remote parts of the country, especially with FTA broadcasters dancing to their tune. DTH operators have to still work hard to increase ARPU and maintain profitability.

     

  • Lower carriage and internet subs fees pull down Ortel numbers in first quarter

    Lower carriage and internet subs fees pull down Ortel numbers in first quarter

    BENGALURU: A forty four percent year-on-year (y-o-y) decline in carriage fees and a thirty five percent y-o-y  decline in internet subscription fees for the quarter ended 30 June 2017 (Q1-18, current quarter, first quarter of fiscal 2018) resulted in decline of some major numbers for Ortel Communications Limited (Ortel). The company has reported a net loss of Rs 29 million in Q1-18 as compared to a profit after tax of Rs 1 million in Q1-17.

    Ortel reported carriage fees of Rs 62 million for Q1-18 as compared to Rs 89 million in the corresponding year ago quarter. Despite a 4.5 percent increase in cable subscription fees, the company’s Total cable TV services revenue declined 5.5 percent in the current quarter to Rs 371 million as compared to Rs 384 million in Q1-17. Ortel reported cable subscription fees of Rs 288 million as compared to Rs 277 million in the corresponding year ago quarter. Connection fees rose to Rs 21 million in the first quarter of fiscal 2018 as compared to Rs 18 million in Q1-17.

    Ortel reported internet subscription revenue on lower Average Revenue per user at Rs 57 million for Q1-18 as compared to Rs 88 million in Q1-17. Internet connection fees declined to Rs 4 million in the current quarter as compared to Rs 7 million in Q1-17. Overall broadband revenue declined 35.8 percent y-o-y in Q1-18 to Rs 61 million as compared to Rs 95 million in Q1-17.

    Coupled with a 13.8 percent decline in Ortel’s Infrastructure and Leasing segment revenue, the company’s total operating revenue declined 8.6 percent y-o-y in the current quarter to Rs 468 million from Rs 512 million.

    Subscription number, ARPU

    The company’s cable TV and internet subscriber bases declined quarter-over-quarter (q-o-q).  Ortel’s cable TV subscriber base in Q1-18 was 747,528 in Q1-18 as compared to 750,471. Broadband subscriber base in the current quarter declined to 70,273 from 73,087. Cable TV ARPU for the current quarter declined by Rs 1 to Rs 137 from Rs 138 in the immediate trailing quarter. In Q1-17, the company has reported a much higher Cable TV ARPU at Rs 157. Broadband ARPU in Q1-18 was substantially lower at Rs 267 as compared to Rs 319 in the immediate trailing quarter and Rs 401 in the corresponding year ago quarter.

    Major Expense heads

    Ortel’s total expenses in the current quarter declined 7.7 percent y-o-y to Rs 359 million from Rs 389 million. Programming cost increased to Rs 115 million in Q1-18 as compared to Rs 100 million in Q1-17.Broadband bandwidth cost increased to Rs 25 million from Rs 22 million. Digital bandwidth cost increased to Rs 15 million from Rs 13 million. Employee benefits expense declined to Rs 54 million from Rs 62 million. Finance costs increased to Rs 71 million from Rs 64 million. Other expenses in the current quarter declined to Rs 114 million from Rs 135 million in the corresponding year ago quarter.

    Company speak

    Ortel managing director and CEO Bibu Prasad Rath said, “This has been a challenging period for the Company as intense competition in our core markets and new subscriber integration issues in new markets  continued to impact our performance. The management team is working towards improving our position and expect to deliver better results by the end of this fiscal year. While we are evaluating fund raise possibilities to bridge our short-term capital requirement, our focus in FY18 would be to consolidate the operations and improve the operational matrix which would result in notable cash flow generation. Overall, we remain confident of the strength of fully controlling the ‘last mile’ network and the B2C business model, which we believe will enable us to tide over this difficult period.”