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  • Status Report: Q3-2016: DAS Phase III deadline no great shakes for DTH industry

    Status Report: Q3-2016: DAS Phase III deadline no great shakes for DTH industry

    BENGALURU: Contrary to expectations that the sunset date of 31 December, 2015 (Q3-2016 in financial terms in India) would rake in good numbers for the DTH industry for the quarter ended 31 December, 2015 (Q3-2015, current quarter), results declared by three of the seven players in the country show not much of a change.

    Refer to Fig A below, which shows a quarter-on-quarter change in subscriber numbers. Though Airtel DTH and Videocon d2h have both shown a small spike in subscriber additions between Q2-2016 and Q3-2016, overall taking the combined addition in subscription numbers by all the three, the change was just 3.59 per cent. In the case of the third player – Dish TV, it witnessed the lowest growth over a five quarter period starting Q3-2015 until the current quarter at 2.19 per cent

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

    (2) This report covers only the three of the seven DTH service providers in India (as had the previous two reports) since the other four – Reliance Digital TV, Sun Direct (about 97 lakh subscribers as on 31 March, 2015), Tata Sky and DD Free Dish are not listed directly on the bourses and their financial numbers are not available, unless the principals of these companies/segments chose to reveal them. The three players – Airtel DTH, Dish TV and Videocon d2h have already been covered in our earlier reports.

    (3) Some of the players mention their financial as well as subscription numbers in millions in their financial reports/investor presentations and other documents that they make available publicly. The financial numbers have been converted to Rs crore and subscription number to lakh to an approximation, and percentages have been mentioned to the second decimal place approximation.

    (4) There could be some ambiguity about the market share of the three players. If one were to go by the latest numbers released by the Telecom Regulatory Authority of India (TRAI) in February 2016 for September 2015. TRAI’s indicator report says that the number of registered DTH subscribers as on 30 September, 2015 was 814.7 lakh. The combined subscription numbers of the three players as on the same day as reported by them individually was 351.16 lakh and hence the market share of these players works out to 43.10 per cent. However, TRAI’s report also says that the number of active DTH subscribers as on 30 September, 2015 was 410.5 lakh. Based on the second TRAI number, the combined total subscriber market share of the three players in this paper works out to 85.54 per cent. Though, the combined share of subscribers of the three players has declined between Q1-2016 and Q2-2016, based on TRAI numbers, the author contends that it is safe to assume that the three players have more than 50 per cent market share in India in terms of subscribers.

    (5) Videocon d2h EBIDTA numbers are adjusted.

    Although in absolute numbers, Q3-2016 saw probably the highest subscriber additions by the three players per quarter over the past few quarters, in percentage terms it was slightly lower at 3.59 per cent in the current quarter as compared to 3.62 per cent in Q1-2016. Overall, the three players in this report have mentioned a combined net addition of 12.6 lakh subscribers in Q3-2016. In Q1-2016, the three had reported a combined net addition of 11.99 lakh subscribers.

    Dish TV managing director Jawahar Goel said, “We continued to build our pan-India reach during the quarter. However, as expected, despite analogue sunset there was no real spike in consumer demand from Phase III markets thus making it an ordinary quarter from that perspective. Later, changing gears to align with the current industry trend, we tweaked our subscription packages to a more versatile and seemingly economical offering. Mandatory digitisation however is expected to pick up speed and our key focus going forward would be to gain market share both in terms of subscribers and profitability.”

    Of the three, Airtel DTH added the highest number of subscribers in Q3-2016, about six lakh subscribers. Further, among the three players, Dish TV has the largest subscriber base – about 140 lakh, followed by Videocon d2h with 112.7 lakh and Airtel DTH with 111.06 lakh subscribers. In terms of revenue, it is Dish TV that leads with the highest revenue, followed by Airtel DTH, with Videocon d2h among the 3 players in this report.

    Please refer to the figure below. Panel A indicates the combined numbers of the three players, Panels B, C and D indicate the playout of revenue, EBIDTA and subscription base for Airtel DTH, Dish TV and Videocon d2h respectively, panel E indicates ARPU and panel F monthly subscriber churn.

    Please refer to Panel A in the graphs above. The combined revenues of the three players in the current quarter grew 17.24 per cent year on year (YoY) to Rs 2,245.17 crore from Rs Rs 1,915.01 crore and grew 4.46 per cent quarter on quarter (QoQ) as compared to Rs 2149.32 crore. EBIDTA increased 41.35 per cent YoY in Q3-2016 to Rs 710.51 crore (31.65 per cent margin) from Rs 503.65 crore (26.25 per cent margin) and grew 4.44 per cent QoQ from Rs 680.30 crore (31.65 per cent margin). Reported Combined Subscription numbers in Q2-2016 grew 13.22 per cent YoY to 363.76 lakh from 321.3 lakh and grew 3.59 per cent QoQ from 351.16 lakh.

    Please refer to panel F above. All the three players have reported a monthly subscriber churn of around 0.7 per cent in the current quarter, as compared to a high of 1.3 per cent in Q2-2016.

    Airtel DTH

    Airtel’s DTH segment contributes about four per cent to the telecom giant’s overall revenue. Revenue for the DTH segment in Q3-2016 increased 19 per cent to Rs 742.2 crore, up 19 per cent YoY as compared to Rs 623.4 crore. EBIDTA for Q3-2016 grew 45 per cent to Rs 247.4 crore (33.3 per cent margin) as compared to Rs 170.7 crore (27.4 per cent margin).

    The segment’s subscriber base grew 13.2 per cent YoY to 111.06 lakh in the current quarter as compared to 98.10 lakh and grew five per cent as compared to 105.76 lakh in the immediate preceding quarter. Though in US dollar terms, average revenue per user (ARPU) was constant YoY and QoQ at $3.5, it has increased seven per cent YoY in Indian rupees to Rs 229 from Rs 214 and increased two per cent QoQ from Rs 224.

    Dish TV

    Dish TV added 3.17 lakh net subscribers (the least among the three) in the quarter ended 31 December, 2015 (Q3-2016, current quarter), taking its subscriber base on that date to 140 lakh. Dish TV is the largest DTH player in the country in terms of subscribers as well as revenue. The company reported 11.8 per cent YOY revenue growth in the current quarter at Rs 771.48 crore as compared to Rs 690.08 crore and 2.5 per cent more QoQ as compared to Rs 752.42 crore.

    The company reported 39.1 per cent EBIDTA growth in the current quarter at Rs 265.4 crore as compared to Rs 190.8 crore in the corresponding year ago quarter and 4.1 per cent more than the Rs 255 crore in the immediate trailing quarter. Dish TV reported PAT in Q3-2016 at Rs 68.49 as compared to a loss of Rs 2.63 crore in the corresponding prior year quarter, but a decline of 21.3 per cent as compared to Rs 86.96 crore in the previous quarter.

    ARPU in the current quarter declined by Rs 5 YoY to Rs 172, but increased by Rs 1 QoQ.

    Videocon d2h

    Videocon d2h added 6.7 lakh gross subscribers and 4.3 lakh net subscribers during the quarter. Gross subscribers totalled 149.5 lakh and net subscribers totalled 112.7 lakh as of 31 December, 2015.

    The company’s revenue from operations (TIO) increased 21.6 per cent YoY to Rs 731.49 crore in Q3-2016 as compared to Rs 601.53 crore, and increased six per cent QoQ from Rs 690.08 crore.

    Videocon d2h reported 42.2 per cent YoY growth in adjusted EBITDA at Rs 201 crore for Q3- 2016 compared to Rs 141 crore in the corresponding year ago quarter. Net loss for the quarter declined to Rs 22.05 crore as compared to the net loss of Rs 79.8 crore in Q3-2015.

    ARPU in Q3-2016 increased 8.2 per cent to Rs 211 as compared to Rs 195 in Q3-2015 and increased 2.9 per cent as compared to Rs 205 in Q2-2016.

    Closing remarks

    Dish TV, which is more of a value player when compared to the other two players in this report, which could be labelled a premium players in terms of subscription packages, could show even better results in terms of better subscriber acquisition and hence higher revenues over the next few quarters, considering the fact that it is tweaking its subscription packages to be more economical.

    Videocon d2h executive chairman Saurabh Dhoot said, “In the first few days of January 2016, we saw strong pick up in subscriber additions in cities that come under Phase III digitisation. Recently, a few state high courts issued a stay order on implementation of Phase III digitisation for one to three months. This was in line with our expectations of the digitisation being a staggered process.”

    “We estimate around 50 million television homes come under Phase III digitisation, of which 24-25 million television homes are already on the digital platform. Thus, the target market under Phase III digitisation is the remaining 25-26 million television homes that are currently on analogue cable,” added Dhoot.

    Investors in Indian DTH companies could heave a sigh of relief – Chrome figures recently released for the month of January 2016 reveal that the DTH industry is a major beneficiary of DAS phase III. If that is the case, then DTH players should report even better numbers for Q4-2016 and FY-2016. Another heartening revelation was made by Sun TV Network Limited (Sun TV) in its earnings release for Q3-2016. Sun TV says that its DTH business under the brand Sun Direct, revenue was up approximately 14 per cent. Subsidy costs for DTH set top boxes is going down, and that should help with improved bottom lines.

    Going on to 31 December, 2016, the sunset date for DAS IV, the DTH platform should be able to garner a big chunk of subscribers from DAS IV areas. The future seems good, let’s see how it plays out from the DTH industry’s perspective.

  • Q3-2016: Sun TV YoY revenue & PAT up

    Q3-2016: Sun TV YoY revenue & PAT up

    BENGALURU: Sun TV Network Limited (Sun TV) reported 3.9 per cent growth in standalone revenue (Total income from operations or TIO) in Q3-2016 (quarter ended 31 December, 2015, current quarter) at Rs 574.12 crore as compared to Rs 552.44 crore in Q3-2015 and a 1.1 per cent QoQ growth from Rs 568.09 crore in Q2-2016. Including other income, Total income in the current quarter increased 4.1 per cent YoY to Rs 598.72 crore from Rs 575.03 crore and increased 1.7 per cent QoQ as compared to Rs 588.44 crore.

    The company reported 0.7 per cent higher YoY profit after tax (PAT) in the current quarter at Rs 215.59 crore (37.6 per cent margin) as compared to Rs 214.13 crore (38.8 per cent margin), but 1.7 per cent lower than the Rs 218.38 crore (38.4 per cent margin) in Q2-2016. 

    Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore
    All figures in this report are standalone.

    The company in its earnings release says that advertisement revenues grew two per cent YoY in the current quarter to Rs 298.35 crore, but were one per cent lower QoQ as compared to Rs 301.37 crore in the immediate trailing quarter. It says that DTH revenue (Sun Direct) for Q3-2106 was up 14 per cent at Rs.150.88 crore.

    The Sun TV board of directors has declared a second interim dividend of Rs 2 per share (40 per cent) on a face value of Rs 5 per share. With this, the total dividend declared by the Board so far for the financial year 2015 – 16 is Rs 8 per share (160 per cent) on a face value of Rs 5 per share as against the total dividend of Rs 11.25 per share (225 per cent) on a face value of Rs 5 per share declared during the previous year ended 31 March, 2015.

    Let us look at the other numbers reported by Sun TV

    Sun TV reported EBIDTA of Rs 440.44 crore (76.7 per cent margin), which was 3 per cent higher YoY as compared to Rs 427.8 crore (77.4 per cent margin) and 1.9 per cent higher QoQ as compared to Rs 432.23 crore (76.1 per cent margin).

    Sun TV’s total expenses (TE) in the current quarter at Rs 268.43 crore (46.8 per cent of TIO) was 7.4 per cent higher YoY as compared to Rs250.05 crore (45.3 per cent of TIO) and 5.9 per cent higher QoQ as compared to Rs 253.44 crore (44.6 per cent of TIO). The company’s TE of Rs 412.1 crore (59.6 per cent of TIO) in Q1 included IPL Franchisee (Sun Risers Hyderabad) of Rs 85.05 crore (12.3 per cent of TIO), which is a non-recurring item during the other three quarters of the year. 

    Sun TV’s ‘Other Expenditure’ (OE) increased 30.6 per cent YoY to Rs 35.16 crore (6.1 per cent of TIO) as compared to Rs 26.93 crore (4.9 per cent of TIO) and was 12.3 per cent higher QoQ as compared to Rs 31.31 crore (5.5 per cent of TIO).

    Sun TV’s Employee Benefit Expense (EBE) in Q3-2016 increased 5.5 per cent YoY to Rs 58.73 crore (10.2 per cent of TIO) as compared to Rs 55.69 crore 10.1 per cent of TIO) and increased 3.2 per cent QoQ as compared to Rs 56.92 crore (10 per cent of TIO) in the immediate trailing quarter.

  • Q3-2016: Sun TV YoY revenue & PAT up

    Q3-2016: Sun TV YoY revenue & PAT up

    BENGALURU: Sun TV Network Limited (Sun TV) reported 3.9 per cent growth in standalone revenue (Total income from operations or TIO) in Q3-2016 (quarter ended 31 December, 2015, current quarter) at Rs 574.12 crore as compared to Rs 552.44 crore in Q3-2015 and a 1.1 per cent QoQ growth from Rs 568.09 crore in Q2-2016. Including other income, Total income in the current quarter increased 4.1 per cent YoY to Rs 598.72 crore from Rs 575.03 crore and increased 1.7 per cent QoQ as compared to Rs 588.44 crore.

    The company reported 0.7 per cent higher YoY profit after tax (PAT) in the current quarter at Rs 215.59 crore (37.6 per cent margin) as compared to Rs 214.13 crore (38.8 per cent margin), but 1.7 per cent lower than the Rs 218.38 crore (38.4 per cent margin) in Q2-2016. 

    Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore
    All figures in this report are standalone.

    The company in its earnings release says that advertisement revenues grew two per cent YoY in the current quarter to Rs 298.35 crore, but were one per cent lower QoQ as compared to Rs 301.37 crore in the immediate trailing quarter. It says that DTH revenue (Sun Direct) for Q3-2106 was up 14 per cent at Rs.150.88 crore.

    The Sun TV board of directors has declared a second interim dividend of Rs 2 per share (40 per cent) on a face value of Rs 5 per share. With this, the total dividend declared by the Board so far for the financial year 2015 – 16 is Rs 8 per share (160 per cent) on a face value of Rs 5 per share as against the total dividend of Rs 11.25 per share (225 per cent) on a face value of Rs 5 per share declared during the previous year ended 31 March, 2015.

    Let us look at the other numbers reported by Sun TV

    Sun TV reported EBIDTA of Rs 440.44 crore (76.7 per cent margin), which was 3 per cent higher YoY as compared to Rs 427.8 crore (77.4 per cent margin) and 1.9 per cent higher QoQ as compared to Rs 432.23 crore (76.1 per cent margin).

    Sun TV’s total expenses (TE) in the current quarter at Rs 268.43 crore (46.8 per cent of TIO) was 7.4 per cent higher YoY as compared to Rs250.05 crore (45.3 per cent of TIO) and 5.9 per cent higher QoQ as compared to Rs 253.44 crore (44.6 per cent of TIO). The company’s TE of Rs 412.1 crore (59.6 per cent of TIO) in Q1 included IPL Franchisee (Sun Risers Hyderabad) of Rs 85.05 crore (12.3 per cent of TIO), which is a non-recurring item during the other three quarters of the year. 

    Sun TV’s ‘Other Expenditure’ (OE) increased 30.6 per cent YoY to Rs 35.16 crore (6.1 per cent of TIO) as compared to Rs 26.93 crore (4.9 per cent of TIO) and was 12.3 per cent higher QoQ as compared to Rs 31.31 crore (5.5 per cent of TIO).

    Sun TV’s Employee Benefit Expense (EBE) in Q3-2016 increased 5.5 per cent YoY to Rs 58.73 crore (10.2 per cent of TIO) as compared to Rs 55.69 crore 10.1 per cent of TIO) and increased 3.2 per cent QoQ as compared to Rs 56.92 crore (10 per cent of TIO) in the immediate trailing quarter.

  • Q2-2016: Indian DTH players replicate improved performance of previous quarters

    Q2-2016: Indian DTH players replicate improved performance of previous quarters

    Over the past two quarters, the DTH segment of the television carriage industry has posted improved performances as has been mentioned by Indiantelevision.com for Q4-2015 and Q1-2016.

    The industry seems to have reached an inflection point in Q4-2015, with three players that have a combined market share of about 62 per cent posting improved results. The biggest player among them in terms of revenue as well as number of subscribers, Dish TV with about 27 per cent market share even reported a consolidated profit after tax (PAT) of Rs 34.94 crore in Q4-2015, a figure that helped wipe out the losses reported by the company for the previous three quarters. Dish TV reported consolidated PAT of of Rs 3.14 crore for FY-2015.

    As a matter of fact, even Airtel DTH services reported a positive EBIT of Rs 8.1 crore for Q4-2015, as compared to a negative EBIT of Rs 36 crore in Q3-2015 and a negative EBIT of Rs 67.6 crore in Q2-2015. The three players have now reported improved performances for the quarter ended 30 September, 2015 (Q2-2016, current quarter).

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

    (2) This paper covers only three of the seven DTH service providers in India (as had the previous two papers) since the other four– Reliance Digital TV, Sun Direct (about 97 lakh subscribers as on 31 March, 2015), Tata Sky and DD Free Dish are not listed directly on the bourses and their financial numbers are not available, unless the principals of these companies/segments chose to reveal them. The three players – Airtel DTH, Dish TV and Videocon d2h have already been covered in our earlier reports mentioned above.

    (3) Some of the three players mention their financial as well as subscription numbers in millions in their financial reports/investor presentations and other documents that they make available publically. The financial numbers have been converted to Rs crore to an approximation of a single decimal place, though percentages have been mentioned to the second decimal place approximation.

    (4) There could be some ambiguity about the market share of the three players. If one were to go by the latest numbers released by the Telecom Regulatory Authority of India (TRAI) in November 2015 for June 2015. TRAI’s indicator report says that the number of registered DTH subscribers as on 30 June, 2015 was 787.4 lakh. The combined subscription numbers of the three players as on the same day as reported by them individually was 343.12 lakh and hence the market share of these players works out to 45.58 per cent. However, TRAI’s report also says that the number of active DTH subscribers as on 30 June, 2015 was 397.4 lakh. Based on the second TRAI number, the combined total subscribe market share of the three players in this paper works out to 86.34 per cent. The figures of 27 percent and 62 per cent have been taken from Dish TV’s estimates.

    (5) Videocon d2h EBIDTA numbers are adjusted – Q4-2015 Adjusted EBIDTA is before accounting for one off securities issue expenses of Rs 10.543 crore and Employee Share based Compensations cost of Rs. 2.974 crore towards provision of ESOP plan of 2014; Q1-2016 and Q2-2016 Adjusted EBITDA is before accounting for Employee Share based Compensations cost of Rs. 2.944 crore towards provision of ESOP plan of 2014

    Please refer to the graphs below. Panel A, B and C and D show the Q2-2015, Q1-2016 and Q2-2016 combined performances of the three DTH operators in this report and then in alphabetical order- Airtel DTH, Dish TV and Videocon d2h respectively. Panel E shows the ARPU value trends and Panel F shows the Monthly Subscriber Churn of the three players over 6 consecutive quarters starting Q1-2015 until Q2-2016.

    Please refer to Panel A in the graphs below. The combined revenues of the three players in the current quarter grew 16.20 per cent year on year (YoY) to Rs 2149.32 crore as compared to Rs 1849.60 crore and grew 3.12 per cent quarter on quarter (QoQ) as compared to Rs 2084.28 crore. EBIDTA increased 47.96 per cent YoY in Q2-2016 to Rs 680.30 crore (31.65 per cent margin) as compared to Rs 459.8 crore (24.86 per cent margin) and grew 1.90 per cent QoQ as compared to Rs 667.6 crore (31.65 per cent margin). Hence, EBIDTA margin declined slightly in the current quarter as compared to the immediate trailing quarter. Reported Combined Subscription numbers in Q2-2016 grew 12.77 per cent YoY to 351.16 lakh as compared to 311.4 lakh and increased 2.34 per cent QoQ as compared to 343.12 lakh.

    All the three DTH operators reported growth in revenue and subscription numbers, both YoY and QoQ. Dish TV and Videocon d2h reported growth in YoY and QoQ EBIDTA, while Airtel DTH reported a YoY increase, but a QoQ drop in EBIDTA and EBIT for Q2-2016. In terms of subscription numbers as well as revenue, Dish TV is the biggest player among the three. While Videocon d2h has a slight edge in terms of subscription numbers over Airtel DTH, the latter has a slight edge over Videocon d2h in terms of revenue.

    The average revenue per customer (ARPU) in the case of Airtel DTH increased QoQ to Rs 224 from Rs 222, it was flat in the case of Videocon d2h at Rs 205 and declined to Rs 171 in Q2-2016 from Rs 173 in the immediate trailing quarter in the case of Dish TV.

    During the six consecutive quarter period starting Q1-2015 until the current quarter, ARPUs of all the three DTH players show linear increasing trends. Monthly Subscriber Churn also seems to be increasing in case of all the three players as is obvious from the linear broken trend lines in Panel F. As a matter of fact the Monthly Subscriber Churn reported by all the three players in the current quarter – Q2-2016 was the highest during a period spread over six consecutive quarters.

    At the cost of repeating some of what has been mentioned above, let us see how these players have performed in Q2-2016.

    Airtel DTH

    Airtel DTH is a small segment of Indian telecom major Bharti Airtel Limited and its revenues constitute around four per cent of its parent company’s revenues and its EBIDTA is contributes just three per cent to overall EBIDTA. Capex investment however is in the seven per cent region of Bharti Airtel’s overall capex investments.

    Please refer to Panel B in the graphs above. Airtel’s DTH segment reported 12.85 per cent YoY growth in its revenue for the current quarter at Rs 706.8 crore as compared to the Rs 623.6 crore in Q2-2015. QoQ, the segment’s revenue grew 3.21 per cent as compared to Rs 684.8 crore.

    EBIDTA increased 53.24 per cent YoY to Rs 234.3 crore (33.15 per cent margin) as compared to the Rs 152.9 crore (24.41 per cent margin), but was 2.70 basis points lower than the Rs 240.8 crore (35.16 per cent margin).

    Airtel DTH segment reported a positive EBIT of Rs 17 crore (2.41 per cent margin) in the current quarter as compared to a negative EBIT of Rs 67.7 crore in the corresponding year ago quarter. EBIT in the current quarter, however was less than half (declined by 59.04 per cent) as compared to the Rs 41.5 crore (6.06 per cent margin) in the immediate trailing quarter.

    The company reported a 10.86 per cent YoY growth in its subscriber base to 105.76 lakh in Q2-2016 as compared to the 95.40 lakh in the corresponding year ago quarter and a 1.58 per cent QoQ growth from 104.12 lakh in the immediate trailing quarter. Monthly subscriber churn however increased to 1.3 per cent in the current quarter as compared to 1.1 per cent in Q2-2015 and 0.8 per cent in Q1-2016.

    The company reported a slight increase in Average Revenue per User (ARPU) in Q2-2016 in terms of Indian rupees, but a flat ARPU in terms of the US dollar at $3.5, which means that ARPU in dollar terms declined due to the rise in the price of the dollar in Indian Rupees. ARPU in Q2-2016 increased to Rs 224 as compared to the Rs 220 in Q2-2015 and the Rs 222 in Q1-2016.

    Monthly Subscriber churn in Q2-2016 at 1.3 per cent was higher than the 1.10 per cent in the corresponding year ago quarter and the 0.80 per cent in the immediate trailing quarter.

    Airtel MD and CEO India & South Asia Gopal Vittal said, “Airtel’s revenue growth in India has accelerated to 13.3 per cent in Q2 on an underlying basis, the highest in the last 12 quarters. Our smaller businesses – home broadband, DTH and our business segment all continue to perform strongly.”

    Dish TV

    This is the third consecutive quarter that Dish TV has reported growth across important financial and operational parameters including operating revenues (Total Income from operations or TIO), PAT and subscription numbers. During the previous fiscal and its last quarter (year and quarter ended 31 March, 2015, Q4-2015), the Subhash Chandra led Essel group’s Dish TV Limited turned the corner with a consolidated PAT of Rs 3.14 crore and Rs 34.94 crore (margin 4.8 per cent) respectively. The company followed this up with even better numbers in the previous quarter (Q1-2015). Dish TV was probably the first among listed DTH companies in the country in FY-2015 and Q4-2015 to report a profit after tax as opposed to the operating profits reported by a segment of the other Goliaths for whom DTH services is just another small segment or group company.

    Please refer to Panel C in the graphs above. For the current quarter ended 30 September, 2015 (Q2-2015), Dish TV has reported Operating revenue of Rs 752.42 crore, hence registering a 15.77 per cent YoY growth as compared to Q2-2015’s number of Rs 649.90 crore and a 2.14 per cent QoQ growth as compared to Rs 736.68 crore.

    The company reported PAT of Rs 86.96 crore (11.56 per cent margin) for the current quarter as compared to a loss of Rs 14.2 crore in the corresponding year ago quarter and a whopping 60.41 per cent growth in profit as compared to the Rs 54.21 crore (7.36 per cent margin) in the previous quarter.

    EBITDA in the current quarter increased 57.50 per cent YoY to Rs 255 crore (33.89 per cent margin) as compared to Rs 161.9 crore (24.91 per cent margin) and increased 7.69 per cent QoQ as compared to Rs 236.8 crore (32.14 per cent margin).

    The company’s subscriber numbers in Q2-2016 increased by 3.38 lakh to touch a subscriber base of 137 lakh as compared to the 133 lakh subscribers reported at the end of the previous quarter (Q1-2016). Monthly Subscriber Churn increased to 0.8 per cent after remaining flat for the previous five consecutive quarters at 0.7 per cent.

    Dish TV reported a YoY growth in Average Revenue per User to Rs 171 as compared to the Rs 166, but a QoQ decline from Rs 173 in the previous quarter.

    Dish TV chairman Subhash Chandra said, “Dish TV further reinforced its leadership position during the quarter. The company, while being at the forefront of the DTH industry in India, reached out to television viewers with innovative products that promise to enhance their television viewing experience. Dish TV’s improving financial strength coupled with its passion to be ahead of the curve, should be an advantage to further enhance its presence in the vast and still untapped analogue and free-to-air television markets in the country.”

    Videocon d2h

    Videocon d2h reported sales growth in both subscription revenue and revenue from operations for the current quarter. Subscription revenue increased 24.63 per cent YoY to Rs 629 crore as compared to Rs 504.7 crore, and increased 4.67 per cent QoQ as compared to Rs 599.61 crore.

    Please refer to Panel D in the graph above. Total revenue increased 20.35 per cent YoY to Rs 690.1 crore as compared to Rs 573.40 crore and increased 4.12 per cent QoQ as compared to Rs 662.83 crore.

    The company reported lower loss in Q2-2016 at Rs 24.6 crore as compared to a loss of Rs 61.4 crore in Q2-2015, but was slightly higher than the loss of Rs 24.4 crore in the immediate trailing quarter.

    Adjusted EBIDTA in the current quarter increased 31.72 per cent YoY to Rs 191 crore (27.68 per cent margin) as compared to Rs 145 crore (25.29 per cent margin) and was almost flat (increased 0.53 per cent) as compared to Rs 190 crore (28.67 per cent margin).

    The company notched up higher net subscribers at 108.4 lakh in Q2-2016 as compared to 94.6 lakh in Q2-2015 and 106.4 lakh in the immediate trailing quarter. Monthly Subscriber Churn in the current quarter at 1.19 per cent was higher than 0.85 per cent in Q2-2015 and 0.46 per cent in the immediate trailing quarter.

    The company reported higher ARPU at Rs 205 in Q2-2016 as compared to Rs 190 in Q2-2015 but was flat when compared to Rs 205 in the immediate trailing quarter.

    Videocon d2h executive chairman Saurabh Dhoot said, “I am happy to share that we have achieved EBITDA growth of 30.3 per cent in the first half of the current fiscal as against our guidance of 25 to 30 per cent growth. We are on track to deliver even stronger growth in the second half of this year, in line with the guidance shared earlier. During the quarter, we focused on enhancing our channel offering and added 14 Standard Definition and four High Definition channels. We have recently launched two proprietary services, namely d2h Hollywood HD and Darshan. With more than 500 lakh eye balls we also continue to gain traction on advertising revenue with marque advertisers coming on our platform.”

    Speaking on the near term subscriber growth outlook, Videocon d2h CEO Anil Khera said, “We estimate around 500 lakh television homes come under Phase III digitization, of which 240 to 250 lakh television homes are already on the digital platform. Thus, the target market under Phase III digitization is the remaining 250 to 260 lakh television homes that are currently on analog cable.”

    End Points

    Implementation of Phases III and IV of DAS presented a potential of about 700 to 750 lakh existing television households plus another 200 to 250 lakh new television households for the carriage industry as per industry estimates. How well each of the players in the ecosystem takes advantage of this  potential remains to be seen. The DTH players in the country are adding to their net subscription numbers, going by the combined 7.64 lakh net subscriber additions that the three players in this paper have reported for Q2-2016 as compared to the immediate trailing quarter. Reported capex investments to the extent of Rs 250 crore in the current quarter and Rs 211 crore in the previous quarter by Airtel DTH and Rs 246 crore in Q2-2016 and Rs 153 crore in Q1-2016 by Videocon d2h indicate that the DTH players are intent on gaining a large portion of this opportunity.

    An Icra Research Services paper of September 2015 on TV Distribution says that DTH players remain well positioned for tapping growth opportunities in Phase III and Phase IV markets due to inherent technology advantage and easier access to cable dark areas. Moreover, incremental investments towards the establishment of infrastructure in the rural markets and relatively high operating costs render it commercially unviable for national MSOs to enter such markets.

    The rural markets continue to remain cost sensitive; hence, MSOs and DTH players are also looking at introducing plain vanilla set top boxes (STBs) specifically for these markets to encourage subscribers to migrate. In this direction, Dish TV launched a lower priced STB under the brand name of Zing, the base pack of which is typically 20 per cent lower than a regular Dish TV STB. Amongst other measures, distributors are also evaluating channel packages with focus on regional content. The media consumption in Phase III and Phase IV markets are driven by regional content and hence such packages are expected to help distributors further expand their subscriber universe in these markets says the Icra report.

    HD channels is another opportunity that DTH players have sensed. Sensing a strong business opportunity Videocon d2h has started augmenting a new strategy early this year. With the number of HD channels set to increase in the coming years, Videocon d2h, which also manufactures STBs, will be phasing out its Standard Definition (SD) STBs over the next year or so. Videocon d2h is looking at 50 to 60 per cent acquisitions in the HD STB space.

    In early May 2015, while speaking at the Asia Pacific Video Operators Summit (APOS) held in Bali, Videocon d2h’s Khera had said, “The cost of difference between SD and HD set top boxes for us is only one and half dollar. In terms of gross adds, the market has been consistently growing and we have seen a growth of eighty to ninety lakh new additions in a year. Net additions has been a challenge, and the industry has been able to get net addition of fifty to sixty lakh. As far as the rotation churn is concerned how one retains customers and provides additional services, is a big challenge.”

    This brings forth another challenge-bandwidth allocation with a limited satellite bandwidth available. Projecting that there would be at least a hundred HD channels over the next one and a half year, Khera had then said, “All the Hindi and English general entertainment channels and movie channels will have a HD and SD feed.” That was six months ago.

    The cut-off date for DAS Phase III – 31 December, 2015 is less than a month away and for DAS IV – 31 December, 2016 just a little more than a year away. Initially the next 13 months followed by a year or two is the period required by the industry to gain some sort of maturity and have a semblance of stability. The next two to four years are going to be real chaotic and exciting times for the carriage industry. For now, the existing analogue consumers and the new television households, are the real low hanging fruits that can be plucked with relative ease. Post digitisation the game will be different, probably with a different set of unwritten rules (and most probably written rules on the path to market maturity).

  • Q1-2016: Affirmation that DTH in India has turned the corner?

    Q1-2016: Affirmation that DTH in India has turned the corner?

    BENGALURU: If numbers reported by direct-to-home (DTH) operators in Q1-2016 are anything to go by, then the segment might just have turned the corner last quarter.

     

    As may be recalled, Indiantelevision.com had reported in the last quarter that the DTH industry in India had probably reached an inflection point in FY-2015 (financial year ended 31 March, 2015, previous year), and more so during the last quarter of the previous year (Q4-2015). The financial results for the quarter ended 30 June, 2015 (Q1-2016, current quarter) seem to confirm this fact.

     

    Another endorsement of this website’s surmise is a single statement in the Sun TV Network’s earning release for the current quarter – Subscription revenues continue to grow with cable TV revenues growing by approximately 13 per cent and DTH subscription revenue growing by nine per cent over the same quarter of last year. Sun TV had approximately eight per cent market share among the private Indian DTH players as on 31 March, 2015.

     

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

     

    This report covers only the three of the seven DTH service providers in India (as had the previous one) since the other four – Reliance Digital TV, Sun Direct (about 97 lakh subscribers as on 31 March, 2015), Tata Sky and DD Free Dish are not listed on the bourses and their financial numbers are not available, unless the principals of these companies/segments chose to reveal them. The three players – Airtel DTH, Dish TV and Videocon d2h have already been covered in our earlier report mentioned above.

     

    Despite Q1 being a relatively weak quarter seasonally, two of the three players – Airtel DTH, Dish TV and Videocon d2h have reported QoQ and YoY growth across all the important parameters that include revenue, operating profits with healthy margins, subscription numbers, average revenue per user (ARPU) for the current quarter. The third player Videocon d2h, has also shown improved numbers across all the parameters mentioned above, except in the case of operating profits – the company’s YoY and QoQ loss reduced significantly in Q1-2016.

     

    Dish TV is the largest DTH player in terms of subscriber base and probably revenue too, in India. The company posted a 55.2 per cent QoQ growth in consolidated profit after tax of Rs 54.21 crore (7.2 per cent margin) in Q1-2016 on revenue of Rs 736.68 crore. For the corresponding quarter of last year, Dish TV had reported a loss of Rs 14.97 crore on revenue of Rs 618.04 crore.

     

    As a matter of fact, Dish TV is also the first among listed DTH companies in the country in FY-2015 and Q4-2015 to report a profit after tax as opposed to the operating profits reported by a segment of the other goliaths for whom DTH services is just another small segment.

     

    Airtel DTH reported the highest YoY growth in ARPU in Q1-2016, as well as the highest ARPU among the three players in this report.

     

    Let us look at some of the numbers reported by the three players:

     

    Airtel DTH

     

    For Bharati Airtel Limited (Airtel), Digital TV services (Airtel DTH) contributes just a small fraction to its overall numbers. The DTH segment’s contribution to overall Airtel numbers is approximately four per cent to revenue and three per cent to EBIDTA, and yet it had a seven per cent share in the company’s capex investments pie to the extent of Rs 211.3 crore fresh investments in Q1-2016. Overall, cumulative investment made by Airtel into its DTH segment is Rs 5621.6 crore (about three per cent of Airtel’s overall cumulative investments).

     

    Mentioning the DTH segment in Airtel’s Q1-2016 earning release, Airtel MD and CEO, India & South Asia Gopal Vittal said, “I am pleased that our revenue growth is broad based across all business units, especially the domestic enterprise and corporate segment, which saw revenues grow by 18.1 per cent, and DTH business which had a underlying topline growth of 26.8 per cent.”

     

    Airtel DTH reported 15.8 per cent increase in YoY revenue to Rs 684.8 crore in Q1-2016 as compared to the Rs 591.5 crore in Q1-2015 and 7.9 per cent more than the Rs 634.8 crore in Q4-2015.

     

    The telecom major’s DTH segment reported a 67 per cent growth in operating profit (EBIDTA) in the current quarter at Rs 240.8 crore (46.1 per cent margin) as compared to the Rs 143.8 crore (24.3 per cent margin) in Q1-2015 and 15.9 per cent more than the Rs 207.8 crore (32.7 per cent margin) immediate trailing quarter.

     

    Airtel’s DTH segment reported 10.9 per cent YoY growth in Airtel DTH customer base for the current quarter at 104.12 lakh as compared to the 93.88 lakh in Q1-2015 and 3.4 per cent growth as compared to the 100.73 lakh in Q4-2015.

     

    As mentioned above, ARPU in Q1-2016 improved significantly to Rs 222 as compared to the Rs 214 in both Q1-2015 and Q4-2015. Monthly churn in the current quarter was higher at 0.8 per cent as compared to the 0.6 per cent in the corresponding year ago quarter, but lower than the one per cent in the immediate trailing quarter.

     

    Dish TV

     

    Dish TV has shown almost flat QoQ revenue growth in Q1-2016. The company reported 0.9 per cent higher consolidated net total Income from Operations (TIO) in the current quarter at Rs 736.68 crore as compared to the Rs 729.93 crore in the immediate trailing quarter and 19.2 per cent more than the Rs 618.04 crore in Q1-2015.

     

    As mentioned above, the company has reported 55.2 per cent higher PAT at Rs 54.21 (7.4 per cent margin) as compared to the Rs 34.94 crore (margin 4.8 per cent) in Q4-2015. The company had reported a loss of Rs 14.97 crore in Q1-2015, while it had reported a consolidated PAT of Rs 3.14 crore for FY-2015.

     

    With effect from 1 April, 2015, Dish TV says that it has started netting-off certain collection fees paid to its trade partners from its topline. This has resulted in the company’s topline getting shrunk by around four per cent, with a similar number being decreased from the middle line.

     

    Further, Dish TV transferred its non-core business (including set-top boxes, dish antenna and related services) to its wholly owned subsidiary Dish Infra Services Private Limited (formerly known as Xingmedia Distribution Private Limited) on 1 April, 2015 on a going concern basis.

     

    The company reported addition of 3,90,000 net subscribers in Q1-2016, taking its total subscriber base to 1.33 crore as on 30 June, 2015. Post consolidation, Dish TV’s ARPU was Rs 173 versus Rs 172 (QoQ) in Q4-2015. The company reported consolidated subscription revenues at Rs 628.88 crore, up 20.6 per cent YoY.

     

    Dish TV chairman Subhash Chandra said, “Dish TV has been actively contributing to the ‘Digital India’ movement by digitizing analog TV homes in DAS phase 3 and 4 markets and remains optimistic about its prospects to acquire a substantial share in these markets.”

     

    Dish TV managing director Jawahar Goel added, “Our first quarter results are in line with the success of our regional and high definition (HD) strategy. Our regional offering, ‘Zing’, would soon be launched in Kerala and would carry the largest cache of vernacular channels offered in that market. ‘Zing’ cemented Dish TV’s supremacy in the DAS Phase 3 and 4 markets with custom-made content, hardware and service packages for the regional audience. High definition continues to be a value driver and a key differentiator for us compared to other DTH offerings in India. Dish TV’s industry leading bandwidth capacity supports 42 HD channels, the largest on offer by any distribution platform so far.”

     

    Further, Dish TV recently formed a content negotiating joint venture (JV) called Comnet with its group company and multi system operator (MSO) Siti Cable Network Limited. Both Dish TV and Siti Cable are equal partners in the JV that came into existence on 1 July, 2015. As part of the JV, both companies will hold joint discussions with broadcasters post, which separate direct contracts between the broadcaster and distribution platform will be signed. The JV also tends to bring together the industry on contentious taxation issues like the recent arbitrary hike in entertainment tax in Delhi.

     

    Videocon d2h

     

    For Videocon d2h, the addition of 6.1 lakh gross subscribers and 4.6 lakh net subscribers in Q1-2016 coupled with higher ARPU for Q1-2016, resulted in a YoY 32.1 per cent growth in subscription revenue and 23.3 per cent growth in revenue from operations (TIO) in Q1-2016. On a QoQ basis, subscription revenue increased 3.7 per cent, while TIO increased six per cent. The company also reported a marked fall in finance costs and consequently the company’s loss in the current quarter more than halved to Rs 24.4 crore as compared to the Rs 55.8 crore in Q1-2015 and was less than a third of the Rs 75.7 crore in Q4-015.

     

    TIO in Q1-2016 at Rs 662.83 crore was 23.3 per cent more than the Rs 537.65 crore in Q1-2015 and 6 per cent more than the Rs 625.27 crore in Q4-2015.

     

    Videocon achieved strong subscription revenue growth of 32.1 per cent to Rs 599.61 crore (90.5 per cent of TIO) in Q1-2016 as compared to the Rs 453.77 crore (84.4 per cent of TIO) in Q1-2015 and growth of 3.7 per cent as compared to the Rs 578.33 crore (92.5 per cent of TIO) in the immediate trailing quarter Q4-2015.

     

    Average revenue per user (ARPU) in Q1-2016 at Rs 205.30 was 9.7 per cent more than the Rs 187.14 in the corresponding year ago quarter and was 1.5 per cent more than the Rs 202.17 in Q4-2015. (Conversion rate from 1 dollar = 62.59 Indian rupee for all the three quarters).

     

    The company considers advertisement revenue as an important contributor to its numbers, and is beginning to see an encouraging response from multiple advertisers. Videocon d2h recently set up an advertising team to sell ad inventory on its own proprietary channels and added three proprietary channels – d2h nursery rhymes; d2h Cinema HD; and another music channel. The company has also launched three Active services, namely, Active Kids, Active Games and Active Learning in this quarter, which the company says are beginning to get traction from its customer.

     

    Videocon d2h executive chairman Saurabh Dhoot said, “We are pleased to declare a strong set of results for the quarter ended 30 June, 2015 and are on track to achieve the guidance provided for fiscal 2016. With a strong subscriber growth outlook, DTH sector gaining market share over cable and an improving ARPU scenario; we believe we are just at the beginning of a multi-year strong growth opportunity.”

     

    Conclusion

     

    The three players considered in this report had an approximate combined market share of 67 per cent in among the private players India at the end of the previous year, or more than two-thirds. It is still early days as yet to really conclude that the DTH sector in India has turned the corner based on good results for only two consecutive quarters reported by three companies that represent about two thirds of the sector. Of course, the amount of representation goes up to 75 per cent of the private players, if one were to consider the Sun TV market share of eight per cent. However, looking at the intensity and the moves of these players, it is quite likely that the sector should continue showing improved positive results, and may have turned the corner in Q4-2015.

  • FY-2015: Inflection point for DTH companies in India?

    FY-2015: Inflection point for DTH companies in India?

    BENGALURU: Is FY-2015 the inflection point for direct to home (DTH) companies in India? The answer seems yes, if one were to go by the financials declared by three listed operators for the quarter and year ended 31 March, 2015 (Q4-2015 and FY-2015 respectively) – Airtel Digital TV, Dish TV and Videocon d2h. And the players are gung-ho about the future. Subscriber growth and higher ARPUs (Average Revenue Per User) are some of the factors that have brightened the picture for this segment of the carriage industry in fiscal 2015.

     

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

     

    This report covers only three of the seven DTH service providers in India since the other four – Reliance Digital TV, Sun Direct (about 97 lakh subscribers as on 31 March, 2015), Tata Sky and DD Free Dish are not listed on the bourses and their financial numbers are not available.

     

    The Numbers

     

    Dish TV

     

    Dish TV’s standalone and consolidated net Total Income from Operations (TIO) in FY-2016 at Rs 2781.64 crore was 10.9 per cent more than the Rs 2508.97 crore in FY-2014. Standalone TIO in Q4- 2015 at Rs 754.72 crore grew 18.5 per cent as compared to the Rs 636.91 crore in the corresponding year ago quarter and was 10.3 per cent more than the Rs 684.26 crore in Q3-2015.

     

    According to Dish TV, the DTH sector is a direct beneficiary of a positive consumer sentiment. The company achieved strong subscriber growth of 1.5 million net subscribers during the year. Fiscal 2015 also saw Dish TV swing to net profit, a first for any DTH company in India.

     

    The biggest among the three in terms of revenue as well subscribers, Dish TV at the close of FY-2015, reported standalone net profit after tax (PAT) of Rs 35.01 crore in Q4-2015 and a standalone PAT of Rs 1.01 crore in FY-2015 as compared to a standalone loss of Rs 154.21 crore in FY-2014. For Q3-2015, Dish TV’s loss was just Rs 2.87 crore as compared to double-digit crore loss numbers in the previous or like-to-like quarters. Dish TV also doubled its subscriber growth to 15 lakh in FY-2015 as compared to the previous year. As on 31 March, 2015, the company reported a net subscriber base of 1.29 crore, having added 4.04 lakh subscribers in the last quarter of 2015.

     

    Dish TV also reported higher ARPU of Rs 179 in Q4-2014 as against Rs 177 in Q3-2015 (1.13 per cent increase in ARPU) and was 5.3 per cent higher than the annual ARPU of Rs 170 reported in Q4-2014.

     

    “As digitization spreads far and wide, we continue to believe that there is sufficient headroom to further explore price differentials between key urban markets and their rural counterparts. All pack prices, for new as well as existing subscribers of Dish TV, have been moved by Rs 10 each in the 42 cities under phase I and II. We are confident that pack price hikes, higher HD uptake, as well as industry level developments such as initiation of packaging in cable will be key contributors to ARPU expansion going forward,” said Dish TV managing director Jawahar Goel.

     

    Post a successful absorption of higher pack prices in Delhi, Mumbai, Pune and Kolkata, Dish TV initiated another price change during the current month. In less than three months since it was first introduced, differential pricing – an industry first from Dish TV was rolled-out in the balance 38 cities covered under DAS phases I and II with effect from midnight on 12 May, 2015.

     

    Last year Dish TV launched a second brand, Zing, in the Indian DTH space. A resounding success, Zing cemented Dish TV’s supremacy in the DAS Phase 3 and 4 markets with custom-made content, hardware and service packages for the regional audience, says the company.

     

    Airtel Digital TV Services

     

    Airtel’s Digital TV Services (DTH segment) revenue grew 19.2 per cent in FY-2015 to Rs 2475.9 crore from Rs 2077.1 crore in FY-2014. The segment reported 11.8 per cent growth in number of subscribers with 100.73 lakh subscribers on 31 March, 2015 as compared to the 90.12 lakh subscribers at the close of the previous year. ARPU in FY-2015 at Rs 214 was five per cent more than the Rs 203 in FY-2014. The segment reported slightly higher monthly churn of one per cent as compared to 0.9 per cent in FY-2014.

     

    The DTH segment reported an operating profit of Rs 8.1 crore in Q4-2015 as compared to an operating loss of Rs 36 crore in the immediate trailing quarter. For FY-2015, Airtel DTH reported a lower operating loss of Rs 158.1 crore, for FY-2014, operating loss was three times more at Rs 481.2 crore.

     

    EBIDTA and EBIDTA margins in FY-2015 at Rs 675.2 crore (27.3 per cent of total revenue) were more than double (2.02 times) the Rs 334.7 crore (16.1 per cent of total revenue) in the previous year.

     

    Videocon d2h

     

    Coupled with higher ARPU for FY-2015 at Rs 196, and Rs 202 in Q4-2015, Videocon d2h reported 32.5 per cent growth in revenue from operations in FY-2015 at Rs 2337.7 crore as compared to the Rs 1764.4 crore in FY-2014. The company’s subscription revenue increased 38.3 per cent in the current year to Rs 2058.1 crore from Rs 1487.7 crore in the previous year.

     

    Videocon d2h says that it was able to push through an inflation linked ARPU increase in February 2015. As a result, Q4-2015 ARPU was Rs 202, up 11.7 per cent from FY-2015.

     

    Videocon d2h closed fiscal 2015 with 101.8 lakh subscribers as compared to 84.4 lakh in the previous year. It claims market leadership in subscriber growth in FY-2015 with 26.4 lakh gross subscribers and 17.4 lakh net subscriber additions. Subscriber churn per month increased fractionally in FY-2015 to 0.8 per cent as compared to 0.76 per cent in the previous year.

     

    The company reported lower net loss in FY-2015 at Rs 272.7 crore as compared to the Rs 319.5 crore in the previous year. Adjusted EBIDTA increased 55.3 per cent in the current year to Rs 609.1 crore (margin 26.1 per cent) from Rs 319.5 crore (margin 34.1 per cent), the company said in its earnings release on NASDAQ.

     

    Videocon d2h CEO Anil Khera said, “The Pay TV segment in India is positioned for extraordinary growth over the next few years with millions of new TV homes being created on account of the strong economic outlook in India as well as the Government of India’s initiative to roll out its digitalization mandate across the country. We believe that 9 to 10 crore homes will be making the switch to digital platforms, which will be available to the DTH and digital cable operators. We are well positioned to benefit from this and we believe we will take the largest share of this opportunity, as we have in the past. With strong economic growth outlook for India, overall media sector is expected to grow in the years to come. We believe this will help grow ARPU, TV penetration and increase HD uptake leading to stronger revenue growth for Pay TV in general and Videocon d2h in particular.”

     

    End points

     

    The last quarter of fiscal 2015 (Q4-2015) has shown better than average results in the case of all the three DTH players examined in this report. PAT in Q4-2015 eliminated the loss Dish TV incurred in the first three quarters of FY-2015. In the case of Airtel DTH segment, EBITDA for Q4-2015 increased to Rs 207.8 crore as compared to Rs 96.7 crore in the corresponding quarter last year. The reported EBITDA margin improved significantly to 32.7 per cent in Q4-2015, as compared to a margin of 17.9 per cent in the corresponding quarter last year.

     

    As mentioned above, Airtel DTH turned EBIT positive to Rs 8.0 crore in the current quarter, as compared to EBIT loss of Rs 110.7 crore in the corresponding quarter of last year. Comparable numbers for Videocon d2h have not been made available since the company debuted on NASDAQ on 1 April, 2015 and has disclosed only a limited amount of information about its annual numbers.

     

    The Indian carriage universe has 16.8 crore households. DTH operators have continued to focus on improving realisations by increasing penetration of HD channels, premium channels and value added services (VAS) according to the FICCI-KPMG Indian Media and Entertainment Industry Report 2015. However, they may have to rework their channel packages to be more relevant and affordable for phases III and IV subscribers. A case in point mentioned above is Dish TV’s sub-brand Zing, which caters to specific linguistic needs of subscribers and offers regional specific packs as a part of all available packs.

     

    Also, all major DTH operators have launched apps for mobiles and tablets through which subscribers can watch live TV for an additional fee and DTH operators have the advantage of monetising these viewers because of their existing payment relationships with their subscribers. 

     

    The FICCI-KPMG 2015 report also says that battle for subscribers in phases III and IV of DAS in India is expected to be more keenly fought between MSOs’ and DTH players. While DTH players managed to get only 20 to 30 per cent of the subscribers converting from analogue to digital in phases I and II, they are in a much better position in phases III and IV due to inherent technology advantage of DTH in sparsely populated areas and also due to their balance sheets being healthier than the MSOs’.

     

    The Ministry of Information and Broadcasting extended the deadlines for phases III and IV to 31 December, 2015 and 31 December, 2016, respectively, and there could be another delay by 12 months according to experts, which means that phase IV rollout could complete only at the end of 2017 or even 2018. The benefits of digitisation in these phases in terms of improved addressability and ARPU is expected to take much longer. At the end of 2019, the FICCI-KPMG report expects digital cable subscriber and DTH subscriber ratio to be 55:45 with 9.4 crore digital cable subscribers and 7.6 crore DTH subscribers.

     

    HITS (Headends in the Sky), if it takes off even in a small way, could affect the fortunes of both the DTH and the cable TV industry. Let’s wait and watch how the Hinduja Group, which has a license to launch HITS and is a major player in the cable TV business, plays this out. Jain TV, the other licensee for HITS, has made a miniscule dent. IPTV is still at less than an infancy stage in the country.

     

    If DTH companies can sustain, innovate in technology and offerings and grow from here, FY-2015, and maybe Q4-2015 could really be the turning point when at least one segment of the carriage business in India has started making money. Only time will tell…

  • Shop CJ eyes deals with Sun Direct and MSOs to expand reach

    Shop CJ eyes deals with Sun Direct and MSOs to expand reach

    NEW DELHI: The home shopping market in India is hotting up. With players like Best Deal TV and the newbie Big Deal TV for the south entering the market, the existing players are looking at upping their game plan.

     

    In the midst of growing competition, Korean home shopping player Shop CJ is looking at expanding its distribution network and in turn increase its turnover to approximately Rs 1200 crore this fiscal.

     

    Shop CJ is currently available on four DTH platforms namely Dish, Tata Sky, Airtel digital, and Videocon d2h. The company is now looking at entering into a distribution agreement with Sun Direct so as to make in-roads into the southern market. Moreover, with a presence on two major multi-system-operators (MSOs) namely Hathway Cable and Datacom and Den Networks, Shop CJ is also eyeing deals with other MSOs to reach the entire country.

     

    Claiming that Shop CJ was the third largest shopping channel in India, Shop CJ chief financial officer N Ramakrishnan told Indiantelevision.com that the company spends less than 10 per cent on marketing the channel in India.

     

    Ramakrishnan also said that Shop CJ, which believed in personal contact and word of mouth publicity, had for the first time launched a television commercial. The TVC showcases its product offering that syncs with the company’s philosophy to bring ultra-trendy, durable, cost-effective, innovative and customer-friendly products, which delight the customers. “The TVC also showcases the new brand identity and name change from Star CJ Alive to Shop CJ with the new brand tagline – ‘shop a new trend’, which signifies company’s product offering that are in synch with customers lifestyle and latest trend,” he said,

     

    Ramakrishnan said that unlike most other shopping channels on TV, Shop CJ was not concentrating as much on electronic items as on kitchenware, clothes and other items that appealed to the homemaker.

     

    Focusing on its core USP of product portfolio, content and multichannel business model, Shop CJ will reach out to its customers with a mix of Indian, international and private brands to offer them variety and choice. While some Korean goods are also sold on the channel, the channel’s concentration is more on Indian goods.

     

    Shop CJ director and CEO Kenny Si Yeol Shin said that the Indian teleshopping market stood at $5,525 million at present and that the channel’s major sales came from Delhi and Mumbai.

     

    “We are very optimistic on the home shopping industry in India as it has the potential to grow by leaps and bounds in the coming few years. Being a multichannel platform is a huge advantage for us as it gives us the opportunity to tap customers from various sources. However, the target groups for each of these mediums is different. TV viewing majorly happens by housewives and other two mediums of internet and mobile by working professionals. Hence we plan to reach the customers with differentiated content, which is relevant and engaging. Being a global leader, we want to change the face of home-shopping in India and we stand committed in our efforts to do so.”

     

    Additionally, Shop CJ is also planning to improve its backend service in order to serve customers quickly and effectively. Being a multichannel platform, Shop CJ will also bring synergy between the three platforms by communicating about online buying option on the TV channel. Whereas on the mobile platform, it will have live streaming option where customer can watch shop CJ channel on their mobile.

     

    Breaking away from the clutter of typical home-shopping channels in India selling sauna belts and slimming teas, Shop CJ has gauged the shifting trend in home-shopping and focused on providing a good product portfolio, engaging the customer through its unique programming, which is entertaining and informative.

     

    Shop CJ’s product-mix, content and multi-channel business has helped the company retain customers at a repeat purchase ratio of 40 per cent.

     

    In the Rs 40 billion TV home shopping market in India, Shop CJ competes with players like HomeShop18, Den Snapdeal TV-Shop, Best Deal TV and Big Deal TV.

     

  • Sun Direct’s home channel is media planners’ new destination

    Sun Direct’s home channel is media planners’ new destination

    MUMBAI: South Indian direct-to-home (DTH) player Sun Direct is all set to take advertising on its DTH home channels to a new level. Keeping in mind the increasing number of advertisers opting for slots on DTH home channels over regular TV channels, Sun Direct has taken a stride towards creating awareness about the available platform.

    In the current digital era, many advertisers opt for advertising in the home channels of the DTH player, which gives innumerable benefits to the brands as it is reaches the target audience. As a major DTH player in South India, Sun Direct has expanded its home channel platform for advertisers to showcase their brands.

    All e–shopping advertisers associated so far gave a positive feedback for Sun Direct viewers for their advertisements resulting in better sales; excluding other brands that have advertised in the platform. The home channel has a mandatory 10-second duration of ads during the booting of the set–top–box so that the viewers get to watch the ad completely. Sun Direct has been innovating to provide services of great quality to both its subscribers and advertisers.

  • Anil Khera replaces RC Venkateish as DTH Operators Association president

    Anil Khera replaces RC Venkateish as DTH Operators Association president

    MUMBAI: Videocon d2h CEO Anil Khera has replaced Dish TV CEO RC Venkateish as the president of DTH Operators Association.

     

    Khera said, “We will be working together to resolve the issues pertaining to DTH industry. We will take up the issues of DTH operators with the relevant government authorities.  I hope that we will be able to resolve all issues of DTH operators amicably with all the stakeholders. I thank all the members for showing faith in me.”

     

    Khera was chosen unanimously by the members of the association as Venkateish’s replacement to represent the six direct to home (DTH) operators namely Tata Sky, Dish TV, Videocon d2h, Sun Direct, Reliance Digital TV and Airtel Digital TV.

     

    In June 2014, Venkateish  was unanimously elected as the president for a term of one year, where the association had also decided to hold regular meetings every quarter to address issues concerning the DTH industry.

     

    Prior to Venkateish , Tata Sky CEO Harit Nagpal served as president of the DTH Operators Association for three years. After the conclusion of Nagpal’s tenure last year, the association had decided to elect the president for a one year term.

  • DTH operators gear up to woo new customers during IPL

    DTH operators gear up to woo new customers during IPL

    MUMBAI: Will Kolkata Knight Riders (KKR) continue its winning streak from last year or will there be another team that will be crowned as this year’s champions in the Indian Premier League (IPL). While a billion people mull over what the final outcome of the cricket tourney will be, Indian direct to home (DTH) operators are not far behind from milking the multibillion dollar sports property.

     

    When quizzed about how the IPL was aiding operators in getting subscriptions, Tata Sky CEO Harit Nagpal says, “Any activity or event like the IPL generates viewer interest. This viewer interest is important and critical in adding subscriptions. But our pricing and such events are independent of each other. People are likely to follow the event and therefore make a purchase.”

     

    Agreeing with him, Sun Direct CEO Mahesh Kumar reasons, “IPL is a fantastic form of cricket that is full of entertainment. Given that we are at the forefront in providing entertainment, the IPL fits in well.”

     

    Kumar is of the opinion that customers coming back from the exam season will definitely be keen to latch on to new connections from Sun Direct as they are providing IPL on Sony Six free to new customers as an incentive. The operator will also provide the IPL add-on free for customers, who recharge beyond six months.

     

    “We see the IPL as a good tool to win back customers and improve our recharges substantially. We also have an add-on for Rs 44, which allows customers to watch the T20 matches for the entire duration of the tournament, apart from the a la carte of Sony Six and Set Max,” he adds.

     

    Dish TV came on board as the official partner for Shah Rukh Khan’s KKR for a fourth time now. The association is a good brand fix as Khan is also the brand ambassador for the DTH operator. The logo of Dish TV will be prominently featured on the non-lead arm of KKR players’ jersey.

     

    “SRK believes in enthralling his audience with quality and consistent entertainment, which is the same philosophy that we at Dish TV believe in. Kolkata has always been a very important market for us and over the years we have been working with the eastern region for trade and consumer engagement activities,” opines Dish TV COO Salil Kapoor.

     

    Kapoor is hopeful that the IPL will bring in added subscriptions. According to him, with cricket fans across the globe, TV sales are likely to see a jump, which in turn will generate a demand for HD channels. “Shah Rukh’s connect and the fact that Dish TV has a strong bouquet of 41 HD channels will help in increasing brand equity, which in turn will result in good sales for us during this IPL,” Kapoor adds.

     

    When asked about the company’s plans during the IPL, Kapoor informs that the ethos behind their brand – i.e. fuelling the passion for entertainment – is to ensure that it goes beyond sports. “This special package is customized to suit the needs of every member of the family. Keeping this in mind, we have introduced the Cricket + package. Our HD channels’ offering is the highest in the industry at present,” he says.

     

    Videocon d2h too has continued its association as the principal sponsor for the Mumbai Indians franchise for the third continuous season of the IPL. The logo of Videocon d2h will feature on the front of the jersey of Mumbai Indians players. Speaking about the same, Videocon d2h CEO Anil Khera says, “We are hopeful of garnering greater visibility for our brand and are looking forward to another eventful year through this partnership.”

     

    Airtel Digital TV has launched various schemes for its customers during this IPL. A company spokesperson informs that for all customers buying Samsung Curve and UHD TV, Airtel Digital TV will offer HD DVR connection at the same cost as that of an HD connection.

     

    “All customers will get discount coupons worth Rs 2650. Customer can enjoy watching the matches on an HD DVR by paying Rs 2350. This box has inbuilt hard disk of 500 GB and customer can enjoy record content up to 750 hours enabling customer to record and watch the matches at a time convenient. Additionally, customers will get free subscription for up to 12 months through a scratch card offer,” informs the spokesperson.

     

    Besides on all other Samsung models, Airtel Digital TV will offer a discount coupon of Rs 660 on its HD+ variant. Additionally customers will get a 8 GB pen drive worth Rs 399 free enabling them to record. Activation charges on Samsung smart direct TVs will be waved off completely.