Tag: broadband

Q2-2016: Ortel YoY revenue up 24.6 percent, PAT more than doubles

BENGALURU: The Bibhu Prasad Rath-headed regional cable television and broadband internet player Ortel Communications Ltd (Ortel) has reported a 24.6 percent growth in revenue from operations (TIO) at Rs 45.79 crore as in the quarter ended 30 September 2015 (Q2-2016, current quarter) as compared to the Rs 36.74 crore in the corresponding year ago quarter. TIO in the current quarter was also higher by 12.8 percent as compared to the Rs 40.6 crore in the immediate trailing quarter. Ortel provides services in the Indian states of Odisha, Chhattisgarh, Andhra Pradesh, Madhya Pradesh and West Bengal,

Notes: 100,00,000 = 100 lakh = 10 million = 1 crore

The numbers mentioned in this report are standalone.

The company reported more than a doubling of PAT (up 2.3 times) to Rs 2.83 crore (5.9 percent margin) as compared to the Rs 1.23 crore (3 percent margin) in Q2-2015, and 15.9 percent more than the Rs 2.44 crore (5.7 percent margin) in the immediate trailing quarter.

Ortel President and CEO Rath said, “I am glad to report a strong operational and financial performance for the quarter ended September 30, 2015. Performance during the quarter was driven by healthy addition in revenue generating units (RGUs) which stood at 571,834. We are witnessing encouraging traction to our LCO buyout strategy in emerging markets like Andhra Pradesh and Chhattisgarh, and I am confident that this would sustain going forward. Going forward, we would continue with our strategy of aggressive LCO buyouts across all our markets and diligently integrate the new subscribers into Ortel’s last mile network. Healthy contribution from new RGUs along with ongoing focus on the high margin Broadband business would enable us to deliver strong financial performance in the forthcoming years.”

The company’s EBIDTA (TIO plus Depreciation and Amortisation plus Other Income plus Fixed assets written off minus Total Expenditure) increased 31.3 percent to Rs 17.29 crore (37.8 percent margin) in the current quarter as compared to the Rs 13.17 crore (35.8 percent margin) and increased 8.8 percent as compared to the Rs 15.89 crore (39.1 percent margin) in Q1-2016.

Ortel’s YoY RGUs grew 9.2 percent to 571,834 in Q2-2016 from 523,833 in Q2-2015 and increased 5.5 percent from 542,217 in Q1-2016.

Cable TV RGUs’ increased 9 percent in Q2-2016 to 508,171 from 466,305 in Q2-2015 and grew 5.6 percent from 481,317 in Q1-2016.

Ortel’s YoY primary digital cable RGUs grew 33.2 percent to 117,401 in Q2-2016 from 88,106 and grew QoQ to 4.5 percent from 112,296 in Q1-2016. Analogue cable RGUs’ increased to 330,739 from 322,175 in Q2-2015 and from 307,923 in Q1-2016. The company says that its Cable TV penetration stood at 23.7 percent and penetration in select 10 towns where company offers digital services stands at 71 percent.

Broadband customers grew 8.9 percent to 63,663 in the current quarter from 57,528 in Q2-2015 and grew 4.5 percent from 60,900 in Q1-2016.

The company has reported a slight drop in digital and analogue cable and broadband ARPUs’ in the current quarter. Digital cable ARPU in Q2-2016 was Rs 183 in Q2-2016; Rs 187 in Q2-2015 and Rs 185 in Q1-2016. Analogue cable ARPU in Q2-2016 was Rs 143; in Q2-2015 it was Rs 147 and in Q1-2016, it was Rs 144. Broadband ARPU in Q2-2016 was Rs 183, in Q2-2015, it was Rs 187 and in Q1-2016, it was Rs 185.

Cable Subscription, Connection and Channel carriage fees

The company’s cable subscription fees in Q2-2016 increased 4 percent to Rs 20.6 crore as compared to the Rs 19.8 crore in Q2-2015 and increased 3 percent as compared to the Rs 20 crore in Q1-2016. Connection fees declined to Rs 0.70 crore in the current quarter from Rs 1.1 crore in Q2-2015 and remained flat as compared to the Rs 0.7 crore in Q1-2015.Channel carriage fees in the current quarter increased 44.9 percent to Rs 9.7 crore from Rs 6.7 crore in Q2-2015 and increased 23.8 percent from Rs 7.8 crore in the immediate trailing quarter.

Let us look at the other numbers reported by Ortel

Total Expenditure in Q2-2016 increased 13.3 percent to Rs 38.72 crore as compared to Rs 34.17 crore in Q2-2015 and increased 12.5 percent as compared to the Rs 34.42 crore in the immediate trailing quarter.

The company’s Programming cost in the current quarter increased 7.2 percent to Rs 9.44 crore from Rs 8.81 crore in Q2-2015 and increased 5.9 percent from Rs 8.91 crore in Q1-2016.

Bandwidth cost in Q2-2016 increased 19.3 percent to Rs 1.92 crore from Rs 1.61 crore in Q2-2015 and increased 7.9 percent from Rs 1.78 crore in Q1-2016.

Employee Benefits Expense in the current quarter increased 45.5 percent to Rs 5.64 crore as compared to the Rs 3.88 crore in Q2-2015 and was 15.4 percent more than the Rs 4.89 crore in Q1-2016.

Last quarter, Ortel announced that it had introduced free broadband option for all Ortel Cable TV subscribers in the states of Odisha, West Bengal and Chhattisgarh as a complimentary special value added service in order to target to deeper penetrate into markets by making internet affordable. Ortel says that its offer includes a free data limit every month for a year. The subscriber will be charged a nominal amount after exceeding the free data usage for the month.

October 20, 2015
The Indian wired broadband story until now in 2015

BENGALURU: The wired broadband internet market in India is dominated by the public sector company Bharat Sanchar Nigam Limited (BSNL), which as per numbers reported by the Telecom Regulatory Authority of India (TRAI) had an all India market share of 62.63 per cent as of July 31, 2015. India’s wired broadband universe was 158.4 lakh, and BSNL had 99.2 lakh subscribers as on July 31, 2015. Please refer to Fig 1 below.

Note: (1) 100,00,000 = 100 Lakh = 10 million = 1 crore
(2) TRAI reports indicate data in millions of numbers. Hence it is assumed in this report that a figure of 0.47 million subscribers for You Broadband for July 31, 2015 would be granular to the nearest 10,000. While percentages perforce have been mentioned up to the two decimal places, the accuracy may vary, depending upon the exact number.
(3) Industry sources say that TRAI numbers in the case of ACT for May 31, 2015 are incorrect at 0.66 million and the correct number would be 0.693 million. Also the subscription numbers mentioned for ACT for August 31, 2015 and September 31, 2015 are industry estimates.
(4) This report examines performance by the top five broadband players in calendar year 2015, and also considers TRAI data for December 31, 2014 and November 30, 2014 to compare growth/declines.
(5) In all the charts and figures in this report, the acronym for the period indicates the last date of the month. For example, Dec-14 means December 31, 2014 and Jul-15 means July 31, 2015.

The Indian wired broadband subscription universe has expanded by 3.39 per cent (5.2 lakh) in calendar year 2015 since from the December 31, 2014 number of 153.2 lakh to 158.4 lakh as on July 31, 2015. Among the top five wired internet service providers in India, the top three – BSNL, Bharati Airtel (Airtel) and Mahanagar Telecom Nigam Limited (MTNL) also provide voice (telephone) services and many of their wired internet customers use both services – voice and data. According to industry sources, Airtel has used separate Fibre to the home (FTTH) or Fibre to the curb (FTTC) in some places for data, but in general, broadband is carried on voice lines by the three big players. The other two companies in this report are ACT (Atria Convergence Technologies) and You Broadband India Private Limited.

It is significant to note that wireline telephone voice subscribers have been declining at an average rate of about 0.49 per cent per month. The total number of wireline voice subscribers declined by 3.32 per cent (almost equal to the above mentioned 3.39 per cent increase in wired broadband internet subscribers) to 26104333 from 27000105 between December 31, 2015 and July 31, 2015, as per TRAI reports. Please refer to Fig 1A below

Among the top 5 players, the two public broadband service providers have shown a slight linear declining to flat trend in terms of number of subscribers, but since the overall universe is growing, their market share has been slowly declining.

Please refer to Fig 2A below for BSNL’s numbers. BSNL’s subscriber base declined by 0.6 per cent between December 31, 2014 and July 31, 2015. In fact, BSNL reported an almost flat subscriber base of 99.8 lakh between December 31, 2014, and February 28, 2015, with numbers declining as on March 31, 2015 to 99.6 lakh, declining to 99.2 lakh as on April 30, 2015, and further declining to 99 lakh as on May 31, 2015 before increasing to 99.1 lakh and 99.2 lakh as on June 30, 2015 and July 31, 2015 respectively. At the same time, its market share declined 251 basis points from 65.14 per cent during the period under consideration in this report.

Please refer to Fig 2B. The private players have reported a growth in wired broadband internet subscriber numbers and market share. ACT has shown the largest growth. (Please refer to Fig 2C below for ACT numbers).
Airtel and You Broadband have both shown an increase in number of wired broadband internet subscribers as well as in terms of market share, while the public sector MTNL has reported a decline across both the parameters.

MTNL’s wired broadband internet subscribers grew from 11.3 lakh on December 31, 2014 to 11.4 lakh on January 31, 20155. The company’s numbers remained flat at 11.4 lakh until May 31, 2015 before declining to 11.3 lakh on June 31, 2015, a status which continued even in July 2015. Hence it has shown no growth in its broadband wired internet subscription base during the period under consideration in this report. However, its market share declined 25 basis points from 7.38 per cent to 7.13 per cent during that period.

Airtel has a pan-India presence. It grew by 6.38 per cent by adding about 90,000 wired internet broadband users between December 31, 2014 and July 31, 2015, thereby increasing its market share from 9.20 per cent to 9.47 per cent. Airtel’s contribution to the all India increase of 5.2 lakh in wired broadband internet customers during the period under consideration was 17.31 per cent.

You Broadband offers high speed internet, voice and video services through cable modem platform to residential, SME and corporate customers in 12 cities in the country. The company grew 11.9 per cent by adding 50,000 subscribers between December 31, 2014 and July 31, 2015 and grew its market share by 23 basis points from 2.74 per cent to 2.97 per cent during the period under consideration in this report.

Headquartered in Bangalore, the regional player ACT is spread across the towns and cities of Karnataka, Andhra Pradesh, Telangana and Tamil Nadu. ACT presently has 10 lakh plus subscribers that include cable as well as FTTH broadband.

Among the five top wired broadband internet service providers in India, ACT has shown the largest growth, both in absolute numbers and in market share. Please refer to Fig 2C below. Overall, the company’s subscription numbers increased 22.95 per cent as on July 31, 2015 to 7.5 lakh from 6.1 lakh on December 31, 2015. Industry sources say that ACT had a subscriber base of 7.9 as of September 30, 2015 and of 7.7 lakh as of August 31, 2015. Hence, the company added 1.2 lakh subscribers between December 31, 2014 and July 31, 2015, or added 26.92 per cent to the all India wired broadband internet subscriber base growth of 5.2 lakhs mentioned above during the period.

ACT’s market share during the period from December 31, 2014 to July 31, 2015 increased by 75 basis points to 4.73 per cent from 3.98 per cent (Please keep the granularity of reportage of 10000 subscriber numbers in mind). The company’s wired internet broadband subscription base is now at about 50 per cent of the behemoth Airtel.

Though the breakup in regions has not been indicated by TRAI in its reports, it would not be surprising if ACT is the largest private player in South India, maybe ahead of even Airtel. Among the non-voice ISP’s ACT’s broadband subscriber base of 7.5 lakh as of July 31, 2015 certainly makes it the largest player in the country.

Concluding remarks

Quality of the product and services as well as after sales services speak for themselves. Pricing also plays the most critical role in a price sensitive market like India. The bigger players such as BSNL, MTNL and Airtel have been insensitive to these aspects while riding on the brand value of their other business operations such as wireless. They seem to have not noticed the simple fact that internet is rapidly becoming an integral part of everyday life and more so wired internet when the user is in the office or at home. For them, wired broadband is just one more product that adds a small fraction to their topline and bottomline. Wired broadband is the stepchild. It is here that the smaller players have stepped in and offered a superior product and prompt service and after sales service at a price that is often a fraction of what their bigger peers offer.

It is the smaller regional players such as ACT and You Broadband that have focused on the customers while not losing sight of their bottomline at the same time. In the case of the telecom companies, product quality and sensitivities to the customers’ requirements and after sales service are sorely lacking say some of their users.

Companies such as ACT and You Broadband have been so far plucking low hanging fruit. They started by offering internet services in the areas where they had cable television subscribers. ACT is now expanding in adjacent areas, and exploring newer territories. ACT has recently started operations in Coimbatore in Tamil Nadu. FTTH certainly offers a better experience to the consumer when compared to other modes such as copper that the traditional voice service providers have been using, or wireless or DOCSIS 2.0 or 3.0 that many an MSO has started depending upon to increase ARPUs.

With cable MSOs, satellite, WiFi, and 4G wireless service providers vying for their customers, the internet ecosystem in India is rapidly changing, and for the better in India. Telecom service providers are facing some of the fiercest competition in decades in the wired broadband internet space. The industry expects that one of the biggest game changers in the internet ecosystem will be Reliance Jio. As MSOs slowly start focusing more and more on wired internet through DOCSIS, the race for numbers and profits is going to get even bigger.

Personalised high quality services that the next door cable operator can offer could play a big difference in who will get more traction. Industry sources claim that Airtel has started taking the competition from the regional wired internet players seriously by improving its after sales service and offering differentiated and competitive packages in the areas where the regional players operate, while product quality when compared to the smaller players is still work in progress. Reliance Jio is so far an unknown quality… only time will tell how the King (customer) will benefit and who it will chose to offer it what is now becoming a basic need for every human being.

October 4, 2015
Broadband subscribers see 4% rise in July despite mobile growth

NEW DELHI: The number of broadband subscribers increased by 4.1 per cent between June and July to touch 113.32 million at the end of July. The total at the end of June stood at 108.85 million.

Expectedly, the largest growth was seen among mobile devices users (phones and dongles), which rose from 92.7 million to 97.04 million signifying a rise of 4.68 per cent.

According to information provided by service providers to the Telecom Regulatory Authority of India (TRAI), wired subscribers grew from 15.7 million to 15.84 signifying a minuscule growth of 0.9 per cent. But there was a fall of 2.84 per cent among fixed wireless subscribers (WI Fi, Wi Max, Point to Point Radio, and VSAT) from 450,000 to 440,000.

The top five service providers constituted 83.83 per cent market share of total broadband subscribers at the end of July. These service providers were Bharti Airtel (26.51 million), Vodafone (22.71 million), BSNL (18.43 million), Idea Cellular Ltd (17.43 million) and Reliance Communications Group (9.93 million).

Some wireless service providers exclude incidental data users from their subscriber base, based on minimum usage decided by them.

As on 31 July, the top five Wired Broadband Service providers were BSNL (9.92 million), Bharti Airtel (1.50 million), MTNL (1.13 million), Atria Convergence Technologies (0.75 million) and YOU Broadband (0.47 million).

The top five Wireless Broadband Service providers were Bharti Airtel (25.01 million), Vodafone (22.70 million), Idea Cellular (17.42 million), Reliance Communications Group (9.81 million) and BSNL (8.51 million).

September 30, 2015
SCTE launches awards for technical excellence & innovation in broadband

MUMBAI: With an aim to raise the standard of broadband engineering in the telecommunications industry, SCTE India has launched awards to honour technical excellence and innovation in broadband for India.

This initiative is an effort towards promoting excellence in broadband as well as create a skilled pool of technicians to drive India’s broadband movement.

SCTE India national secretary Rahul Nehra and SCTE president Dr Roger Blakeway announced the awards at IBC 2015 in Amsterdam allowing entries for nominations as well.

Opening the floor for nominations, SCTE invited submissions from individuals, business leaders and companies that have launched new product, method of technical excellence and innovation and new ways of improving technology till 31 December 2015. The entries will be assessed by an international jury.

“Those who have demonstrated outstanding performance with categories such as Technological Innovation (in several sub-categories), Best Headend Management Services and Network Management Services; Best Convergent Services Provider; Best DAS Compliance and Maximum Upskilling Activity Over the Year will be awarded,” said SCTE India national secretary Rahul Nehra.

“The SCTE India awards will set in motion a new wave of thought leadership and reward innovation as well as fostering the adoption of best practice in the industry,” said SCTE India president Prem Behl.

“The awards will recognise innovation in the cable and broadband domain having the potential for long-term with a significant impact in India at national and regional levels. The innovation may be technological or economic in nature and, preferably, should have created a broad or globally recognized benefit for the telecommunications industry,” he added.

There will be a separate set of individual awards to recognise the individual SCTE India Technician of the Year, SCTE India Member of the Year, Best Customer Manager, Outstanding Services to Broadband Engineering, Honorary Fellowship of SCTE India and SCTE India Engineer of the Year.

The televised SCTE India awards ceremony will take place during the 24th Convergence India conference on 22 January, 2016 at Pragati Maidan, New Delhi.

September 22, 2015
BSNL leaps towards Digital India, to upgrade broadband speed

NEW DELHI: In an effort to fulfil its aim of linking the nation through the Internet, Bharat Sanchar Nigam Ltd is upgrading broadband speed by a minimum 2 Mbps at no additional cost for consumers pan India from 1 October.

Earlier, BSNL had offered free night calling from BSNL landlines to all operator networks from 9 pm to 7 am and free incoming roaming services for its mobile customers.

BSNL is also offering 1 Gb free E-Mail box to customers from the existing 50 Mb mail box.

Minister of Communications and Information Technology Ravi Shankar Prasad made this announcement at a function in Gurgaon. Minister of State for Planning Rao Inderjeet Singh was also present along with BSNL CMD Anupam Srivastav, director (CFA) N K Gupta, director (HR) Sujata Ray, and Haryana CGM R C Arya.

The speed upgradation will benefit all existing and new BSNL broadband customers. Under this scheme, BSNL is upgrading the speed of existing broadband plans of 512 Kbps and 1 Mbps to 2 Mbps speed. With this upgradation, BSNL customers can access and surf the internet at high speed.

BSNL is the first service provider to provide the Broadband Access to the country. The company launched broadband services over its landline in India in 2005 with speed of 256kbps and above over the Multi Protocol Label Switching (MPLS) based IP infrastructure in urban as well as rural areas.

Since then BSNL is constantly working to increase the broadband speed for enhanced customer experience in urban and rural areas as envisaged in the New Telecom Policy 2012. Now, BSNL offers Broadband services with various plans ranging from 2 mbps to 100 mbps speed using ADSL/VDSL and fibre based GPON technology in a very affordable price range. The company currently has around 10 million broadband customers including about 1.1 million rural customers.

This upgradation shall enhance customer experience while surfing on internet and enjoying live video streaming by all customers even in the low price range. This scheme is expected to attract new customers for subscribing BSNL broadband customers in an affordable manner.

BSNL has more than 77 million mobile customers, more than 16 million wired line telephone connections and around 10 million wired broadband connections.

September 7, 2015
Arasu reports Rs 181.91 crore revenue in 2014-15

MUMBAI: J. Jayalalithaa owned Tamil Nadu Arasu Cable TV Corporation’s (TACTV) revenues have seen an upward trend after it was revived by the present AIADMK regime. The multi system operator (MSO) has reported revenue of Rs 181.91 crore in 2014-15 from Rs 2 crore it had reported in 2010-2011.

As per the Information Technology Department policy note tabled in the State Assembly, Arasu’s revenue rose by 64.3 per cent between 2011-2012 and 2014-15, in view of growing subscriber base, a PTI report said. The MSO had reported revenue of Rs 64.8 crore in 2011-12.

The increase in revenue, as per the report, was due to increasing subscriber base and tapping revenues from private local channels.

While the MSO has so far not been granted the licence to operate in the DAS areas, its cable subscribers have grown manifold. Arasu, which in September 2011 had 4.94 lakh subscribers in Tamil Nadu, currently serves 70.52 lakh subscribers through 26,246 local cable operators (LCOs).

Additionally, realizing the need for having a broadband base in order to grow the average revenue per user (ARPU), Arasu entered into a memorandum of understanding (MoU) with RailTel Corporation for providing broadband and internet services through LCOs.

As per the PTI report, the Department of Telecommunications under the Ministry of Communication and Information Technology has granted the Unified License—ISP Category ‘B’ authorisation for offering the broadband and internet services.

As a pilot project, around 1000 internet connections, through 35 LCOs have been provided and the service quality is being closely monitored. The government is taking steps to popularise internet service through LCOs in order to increase connections in the state.

September 1, 2015
Q1-2016: Cable TV in India – Sequential quarter revenues down, broadband shines

Indian Cable TV is a long haul work-in-progress is what we had said last quarter. The results of the four sample companies in the quarter ended 30 June, 2015 (Q1-2016) in that report seem to endorse this fact. All four companies comprising the big three – Hathway Cable and Datacom Limited, Den Networks Ltd, Siti Cable Network Limited and the minnow – Ortel Communication Limited reported a quarter on quarter (QoQ) drop in total income from operations (TIO or revenue) in the current quarter. As expected, broadband subscribers and revenue continues to grow.

Note: (1) 100,00,000 = 100 lakh = 10 million = 1 crore.

(2) Some figures are approximate.

(3) Generally other income has not been factored in for EBIDTA figures in the report.

Performance

Though Den Networks’ and Hathway’s YoY results in the current quarter deteriorated, QoQ, both performed better, albeit both the cable companies reported losses. Siti Cable’s loss in Q1-2016 increased YoY and QoQ, and though regional player Ortel returned a profit in the current quarter as compared to a loss in Q1-2015, its Q1-2016 profit was less than half the profit reported in the immediate trailing quarter.

Over the last few quarters, Den Networks’ financial performance has shown a marked decline. From a company that reported profit after taxes, it has started reporting a loss. Without considering other income, the company reported a negative EBIDTA of Rs 4.67 crore as compared to the operating profit of Rs 57.16 crore in Q1-2015 and a higher operating loss of Rs 5.97 crore in the immediate trailing quarter. However, the company’s Cable TV segment reported a higher QoQ EBIDTA in Q1-2016 of Rs 18 crore (6.9 per cent margin) as compared to the Rs 14 crore (5.3 per cent margin) in Q4-2015, but a lot lower than the EBIDTA of Rs 69 crore (27 per cent margin) in Q1-2015.

Hathway’s EBIDTA in the current quarter declined 25.4 per cent to Rs 32.73 crore (12.8 per cent margin) as compared to the Rs 43.87 crore (17.5 per cent margin) in the corresponding year ago quarter but was 5.7 per cent more than the Rs 30.98 crore (11.5 per cent margin) in the immediate trailing quarter.

Siti Cable’s EBIDTA including other income for Q1-2016 increased 5.1 per cent to Rs 38.1 crore as compared to the Rs 36.26 crore in Q1-2015 and was 18.7 per cent more than the Rs 32.11 crore in Q4-2015.

“Our commitment to improving operational efficiency and streamlining operations continues, leading to EBITDA growth of 18.7 per cent and margin expansion by 501 bps QoQ,” explains Siti Cable executive director and CEO VD Wadhwa.

Ortel’s EBIDTA in the current quarter improved by 24.1 per cent to Rs 10.84 crore (26.7 per cent margin) as compared to the Rs 8.73 crore (22.1 per cent margin) in Q1-2015, but declined 34.5 per cent as compared to the Rs 16.55 crore (36.9 per cent margin) in the immediate trailing quarter.

Ortel president and CEO Bibhu Prasad Rath said, “Overall growth was delivered on the back of steady contribution from Cable TV and Broadband segments supported by continued momentum in the Infrastructure Leasing segment. Significant growth in subscriber base, deeper penetration, enhanced product offerings and a strong team, should enable us to notably improve our performance going forward.”

Total Income from Operations

Please refer to the figure below. Den Networks, the company with the largest TIO among the four, reported TIO at Rs 265.60 crore, 11.1 per cent less than the Rs 298.81 crore in Q1-2015 and 1.7 per cent lower than the Rs 270.30 crore in Q4-2015. The company’s loss in the current quarter at Rs 51.89 crore was lower than the Rs 61.15 crore reported in the immediate trailing quarter Q4-2015. The company had posted a profit of Rs 1.12 crore (0.4 per cent margin) in the corresponding year ago quarter – Q1-2015.

Though Hathway reported 5.7 per cent growth in standalone TIO in Q1-2016 to Rs 264,41 from Rs 250.11 crore in Q1-2015 QoQ, its TIO was 2.1 per cent lower than the Rs 270.03 crore in Q4-2015. Hathway’s loss in the current quarter widened to Rs 43.91 crore as compared to the Rs 0.93 crore in Q1-2015, but was considerably lower than the Rs 76.99 crore in Q4-2015.

Siti Cable reported TIO of Rs 228.09 crore in Q1-2016, which was 9.1 per cent higher than the Rs 209.02 crore in Q1-2015, but was 10.9 per cent lower QoQ than the Rs 256.01 crore in Q4-2015. The company reported a higher loss of Rs 37.11 crore in Q1-2016 as compared to the loss of Rs 31.67 crore and a loss of Rs 34.13 crore in Q4-2015.

Ortel reported 20.5 per cent growth in TIO at Rs 40.60 crore in Q1-2016 as compared to the Rs 33.69 crore in Q1-2015, but 9.6 per cent lower than the Rs 44.91 crore in Q4-2015. Ortel reported profit after tax (PAT) of Rs 2.44 crore (six per cent margin) as compared to a loss of Rs 1.16 crore in the corresponding year ago quarter, but Q1-2016 PAT was less than half (lower by 56.8 per cent) the PAT of Rs 5.65 crore (12.6 per cent margin) in the immediate trailing quarter.

Cable TV (Video) Subscription Revenue

Subscription revenue in the current quarter dropped QoQ in the case of Siti Cable and Hathway, while both Den Network and Ortel saw an increase in YoY and QoQ subscription revenue. At the same time, all the companies have reported higher digitisation numbers in DAS and non-DAS areas. Siti Cable and Ortel have reported a gain in subscription numbers as well. While Den Networks and Hathway have reported flat or slightly higher digital as well as analogue average revenue per user (ARPU), Ortel has reported a slight drop in both ARPUs.

According to company sources, Siti Cable, which is the biggest player among the four sample companies in terms of cable TV subscription revenue, had flat QoQ ARPUs in Q1-2016, while YoY ARPUs showed double digit growth. The company claims that its subscriber base has increased by two lakh (all digital) to 107 lakh as it expanded its footprint by entering into 12 new towns across India as a part of the ongoing voluntary digitization process in order to be compliant with the DAS phase III digitisation deadline.

Despite the flat QoQ ARPUs and higher subscription numbers, Siti Cable’s cable TV subscription revenue fell QoQ because the company had initiated strict measures against erring LCOs and had switched off signals to the extent of about four lakh cable TV consumers, as per industry sources.

“During the quarter, we have further tightened our credit control measures and started taking strict actions against defaulting operators, which shall result into improved credit discipline and saving in operating cost,” revealed Wadhwa. A source told Indiantelevision.com that Siti Cable’s strict measures seem to have worked and signals have been resumed to the subscribers, but that it would take time to reflect the improved numbers in its financials.

Ortel’s Rath added, “I am also pleased to share that over and above the 542,217 RGUs (revenue generating users) as on 30 June, 2015, we have signed buy out agreements with multiple LCOs with total estimated RGUs of 33,000, which would be integrated into Ortel’s last mile network going forward. So we remain on track and are confident of achieving our target of one million RGUs by March 2017 backed by our LCO buy out strategy and focus on organic growth both in broadband and cable TV.”

Pay channel Costs

Please refer to the figure below that represents the Cable TV costs paid by the four sample companies.

The big three reported a QoQ fall in pay channel costs, while in the case of Ortel, pay channel costs rose. This does not mean that a la carte has become a reality and the multi-system operators (MSOs) are only paying for what their subscribers are paying. It’s just that this quarter, balancing amounts have been paid to a broadcast aggregator, since excess payments had been made until Q4-2015.

Diverting from the performance for a bit, a source from an MSO says, “As a matter of fact, it’s the big broadcasters that are resisting a la carte. A la carte will affect their overall advertisement revenues for packaged deals across the multiple channels within their fold.”

Internet subscription revenue

This is one avenue that most cable companies are looking at as their business and revenue growth alternative. Internet ARPUs in India are much higher – to the extent of 3 to10 times the ARPUs from cable television. All the four sample players in this article reported YoY growth. The big three- Hathway, Den and Siti Cable also reported QoQ revenue growth, while Ortel’s internet subscription revenue remained flat. Higher subscription numbers, higher ARPUs brought in the accelerated revenue growth for Hathway, Den and Siti Cable. Typically, broadband ARPUs for the big three were in the range of Rs 750 in Q1-2016 as Rs against 650-700 in Q1-2015 and Rs 720-750 in the previous quarter.

Among the four, Hathway with an initial higher internet subscriber base in excess of four lakh plus, reported a growth of 50,000 subscribers to bring its total subscriber numbers to 4.6 lakh in Q1-2016. Already its internet revenue subscription has a reasonably big share in its overall revenue pie. Comparatively, the other three have internet subscribers than number in just tens of thousands, though all have reported reasonable YoY and QoQ growth in subscribers.

Ortel reported a slight depletion in ARPUs and hence the flat internet subscription revenue despite a higher QoQ subscriber base. Ortel’s broadband RGUs in the current quarter grew 4.1 per cent to 60,900 from 58,519 in Q4-2015. Ortel also launched up to 50 Mbps DOCSIS 3.0 Broadband Internet in Odisha. The company’s broadband ARPUs in the current quarter also declined by Re 1 to Rs 393 from Rs 394 in Q4-2015.

End Points

At present, most MSOs have two separate arrangements with broadcasters – one for Digital Addressable System (DAS) areas and another for non DAS areas. Recently the Essel Group that operates both carriage platforms – DTH though Dish TV as well cable TV through Siti Cable – formed a common entity called “COMNET” to help synergize strengths of both entities in dealing with broadcasters. Siti Cable says that the primary reason for forming this venture was to ensure that consumers have access to quality content at affordable prices. This move would assist in keeping content cost in consonance with consumer ARPUs and market realities.

Players across mature markets such as the US continue to report a fall in video subscribers – to that extent that most companies there have higher broadband subscribers than video subscribers. Such a scenario is not probable in the near future in India, but cable TV players do face competition from wireless internet players and mobile companies as well as from other devices as a mode of entertainment rather than the idiot box. Carriage or placement fees could continue as bargaining currency in the near future.

Once a la carte becomes a reality, to some extent, one could infer that if the pay channel costs are down, it’s because subscribers have used the option, and not that the player has lost more subscribers than it gained. In theory, DAS has made it possible for carriers to pay broadcasters if and when the subscriber subscribes for pay channels. It now remains to be seen if the players in the industry allow the theory to be put into practice. Cable TV subscription revenues and ARPUs could fall if players don’t play it right.

The response to the Hinduja’s HITS (headends in the sky) platform from local cable operators (LCOs) has been tremendous, if one were to go by initial reports. The DTH industry has started making inroads into DAS phase III and IV areas and could grab more than the 30 to 40 per cent of the subscribers that it did in phase I and phase II.

As has been pointed out by industry experts, just the seeding of set top boxes (often non-BIS compliant STBs) does not mean implementation of DAS as it was truly meant to be. It can be safely reiterated that there’s a lot of work to be done by the industry.

August 25, 2015
Q1-2016: Siti Cable broadband revenue up 64%; Operating income up 9%

BENGALURU: Subhash Chandra led Essel Group’s Siti Cable Network Limited (Siti Cable) reported operating revenue (total income from operations, or TIO) of Rs 228.09 crore in the quarter ended 30 June, 2015 (Q1-2016), which was 9.1 per cent higher than the Rs 209.02 crore in Q1-2015, but was 10.9 per cent lower QoQ than the Rs 256.01 crore in Q4-2015.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore.

(2) All numbers in this report are consolidated unless stated otherwise.

Both television and broadband subscription revenue registered YoY growth, broadband reported 63.6 per cent growth at Rs 9 crore in Q1-2016 as compared to the Rs 5.5 crore in the corresponding year ago quarter and was 13.9 per cent more than the Rs 7.9 crore in the immediate trailing quarter.

Subscription revenue in Q1-2016 at Rs 129 crore was 9.1 per cent higher than the Rs 118.2 crore in Q1-2015, but declined 9.4 per cent as compared to the Rs 142.4 crore in Q4-2015. Activation revenue at Rs 10.9 crore in the current quarter was 25.3 per cent lower than the Rs 14.6 crore in Q1-2015 and was 48.3 per cent lower than the Rs 21.1 crore in Q4-2015. Siti Cable says that effective realisation per subscriber remained flat during the current period.

Siti Cable’s cable universe increased by 200,000 digital subscribers to 107 lakh in Q1-2016 from 105 lakh in Q4-2015. Digital subscriber base increased in the current quarter to 55.8 lakh from 53.8 lakh in Q4-2015. Net broadband additions in the current quarter were 4400 – the count went up to 74,500 from 70,100 in the previous quarter (Q4-2015).

Let us look at the other numbers reported by Siti Cable

Siti Cable reported a higher loss of Rs 37.11 crore in Q1-2016 as compared to the loss of Rs 31.67 crore in Q1-2015 and a loss of Rs 34.13 crore in Q4-2015.

EBIDTA including other income for Q1-2016 increased 5.1 per cent to Rs 38.1 crore as compared to the Rs 36.26 crore in Q1-2015 and was 18.7 per cent more than the Rs 32.11 crore in Q4-2015.

Total Expenditure in Q1-2016 increased 12 per cent to Rs 228.21 crore (100.1 per cent of TIO) as compared to the Rs 203.76 crore (97.5 per cent of TIO) in Q1-2015, but was 18.6 per cent lower than the Rs 280.49 crore (109.6 per cent of TIO) in the previous quarter.

Pay channel costs in the current quarter increased 8.1 per cent to Rs 135.70 crore as compared to the Rs 125.55 crore in Q1-2015 but was 13.6 per cent lower than the Rs 156.98 crore in Q4-2015.

Siti Cable’s Finance costs in Q1-2016 increased 11.6 per cent to Rs 33.90 crore as compared to the Rs 30.37 crore in Q1-2015 and were 9.2 per cent more than the Rs 31.05 crore in Q4-2015.

Other expenses increased 13.9 per cent in the current quarter to Rs 43.32 crore as compared to the Rs 38.05 crore in Q1-2015 but were 40.3 per cent lower than the Rs 72.53 crore in Q4-2015.

“Our commitment to improving operational efficiency and streamlining operations continues, leading to EBITDA growth of 18.7 per cent and Margin expansion by 501 bps QoQ,” said Siti Cable executive director and CEO VD Wadhwa.

“We managed to grow our Broadband revenues by 13.4 per cent QoQ and are on track to expand our Broadband operations in new cities. Delays in content availability held back STB seeding, however we are well poised to expand aggressively this quarter. During the quarter we have further tightened our credit control measures and started taking strict actions against defaulting operators, which shall result into improved credit discipline and saving in operating cost,” added Wadhwa.

August 13, 2015
“Private sector needs to own network to connect India seamlessly via wireless broadband:” Rajeev Chandrasekhar

NEW DELHI: Member of Parliament and technology entrepreneur Rajeev Chandrasekhar today underlined the need for making high quality Wi-Fi available and accessible across the country. He said that it was imperative for the Government to partner with States and private service providers in the space.

Chandrasekhar also recommended that while the government could own the fundamental policy making but the network owner should be from the private sector to make the initiative a success.

While delivering the inaugural address on ‘India, Wi-Fi and Smart City Development’ at the Wireless Broadband Vision Forum, Chandrasekhar said that it would be appropriate to provide Wi-Fi access free of cost to a selected faction who deserves it rather than making it free for all. He added that any programme started with the aim of providing free service suffers from suboptimal facilities and poor quality.

The forum was organised by FICCI in collaboration with Global Wi-Fi Broadband Alliance to advance the policy objectives of the Digital India programme.

Chandrasekhar said Digital India has tangible benefits and can have a multiplier effect on the country’s productivity and GDP. He added that India’s internet penetration stands at a low level today, hence it provides a huge opportunity for the government and private sector to make India connected via internet.

Delhi Government’s Delhi Dialogue Commission vice chairman Ashish Khetan, who gave his keynote on ‘Delhi Wi-Fi – A Smart City Perspective from India’, said it was one of the biggest challenges for the city Government to draft a policy for providing seamless access and quality service of Wi-Fi at an affordable cost.

He added that within a few weeks the Request for Proposal (RFP) would be finalised and placed in the public domain.

Khetan also said that the government proposes to provide speed of 1 Mbps and 1GB data download free for the citizens of Delhi. In the first phase of the programme, all Delhi colleges, including government and private, would be enabled with public Wi-Fi. Subsequently, in the second phase, all villages in Delhi would have Wi-Fi facility and in the third phase the focus would be on connecting unauthorized colonies of Delhi.

Wireless Broadband Alliance (WBA) CEO Shrikant Shenwai said these were exciting times for Wi-Fi operators, Wi-Fi equipment vendors and above all Wi-Fi users. The potential of Wi-Fi worldwide is vast and growing. The WBA was committed to helping Wi-Fi fulfill that potential.

He said end-user focus for next generation Wi-Fi experience means making it easier for users to find and access hotspot service locations; offering a user experience that is simple and consistently better; and allowing seamless interoperability, across devices, operators & networks and WBA aims to achieve this by bringing the stakeholders on the same platform.

FICCI Communications & Digital Economy Committee chairman Virat Bhatia said that to advance the policy objectives of the Digital India programme, the Wireless Broadband Vision Forum facilitated a thought-provoking dialogue that explored the opportunities and challenges associated with delivering transformational connectivity for the Government of India’s 100 Smart Cities Program. The forum presented an opportunity to meet with global experts from Singapore, San Jose and Seoul and leading Indian policy makers, government officials, operators and ecosystem players in this space.

FICCI DG Arbind Prasad said that the Wireless Broadband Vision Forum is an initiative to promote the Government of India’s programs of Digital India, Make in India and Smart City. He added that FICCI is partnering with WBA to promote Wi-Fi connectivity throughout the country as wireless is the future of internet and India deserves a revolution in this sector as well on the lines of the one witnessed in the telecom space.

August 13, 2015
Q1-2016: Den Networks revenue down 11%, posts net loss of Rs 52 crore

BENGALURU: Den Networks Ltd (Den Networks) reported lower Total Income from operations (TIO) in the quarter ended 30 June, 2015 (Q1-2016) at Rs 265.60 crore, 11.1 per cent less than the Rs 298.81 crore in Q1-2015 and 1.7 per cent lower than the Rs 270.30 crore in Q4-2015.

The company’s loss in the current quarter at Rs 51.89 crore was lower than the Rs 61.15 crore reported in the immediate trailing quarter Q4-2015. The company had posted a profit of Rs 1.12 crore (0.4 per cent margin) in the corresponding year ago quarter – Q1-2015.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

However, there were a few silver linings in the in the gloomy financial picture. Den’s Broadband revenue increased sharply to Rs 5.21 crore against Rs 1.06 crore in Q1-2015. Den, through a wholly owned subsidiary has participated in India Soccer League through the Delhi Dynamos FC. The company says that the response to the ISL is unprecedented and has given a huge advantage to the Den brand. Soccer revenue flow has started in current quarter at Rs 93 lakh, reveals Den.

Some of Den Networks operational highlights in the current quarter include the fact that Den says that it has seeded 20 lakh boxes in phase III markets ahead of December 2015 deadline. It claims a 21 per cent market share in India’s digital cable subscribers (25 per cent in Phases 1 and 2). Further, the company’s Cable EBITDA improved by 26 per cent from Rs 14 crore in Q4-2015 to Rs 18 crore in the current quarter.

Den Networks’ Broadband reach has increased 50 per cent in terms of number of homes passed and subscribed and broad band ARPU is Rs 760. Also, the company reports a strong growth in Den-Snapdeal clocking with the venture clocking an annualised GMV of Rs 144 crore in the current quarter as compared to the Rs 117 crore in previous quarter.

Den Network’s operating loss (EBIDTA) in the current quarter was lower at Rs 4.67 crore as compared to the Rs 5.97 crore in Q4-2015. The company had reported a positive EBIDTA of Rs 57.16 crore (19.1 per cent margin) in the corresponding year ago quarter.

The company’s Total Expenses in Q1-2016 at Rs 320.33 crore (120.6 per cent of TIO) was 12.4 per cent higher than the Rs 284.93 crore (95.4 per cent of TIO) in Q1-2015, but was one per cent lower than the Rs 323.70 crore (119.8 per cent of TIO) in Q4-2015.

Content cost in Q1-2016 at Rs 136.06 crore (51.2 per cent of TIO) was 27.9 per cent more than the Rs 106.42 crore (35.6 per cent of TIO) in Q1-2015, but was 2.2 per cent lower than the Rs 139.13 crore (51.5 per cent of TIO) in the immediate trailing quarter.

The company’s finance costs in Q1-2016 declined 7.8 per cent to Rs 18.27 crore (6.9 per cent of TIO) as compared to the Rs 19.82 crore (6.6 per cent of TIO) in Q1-2015, but was 11.6 per cent more than the Rs 16.37 crore (6.1 per cent of TIO) in the immediate trailing quarter.

Employee Benefit Expense at Rs 34.15 crore (12.9 per cent of TIO) in Q1-2016 was 20 per cent more than the Rs 28.46 crore (9.5 per cent of TIO) in Q1-2015 and was 13.4 per cent more than the Rs 30.12 crore (11.1 per cent of TIO) in Q4-2015.

August 1, 2015