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DishTV losses swell; subscriptions go up, ARPU reduces

25-January-2010
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DishTV losses swell; subscriptions go up, ARPU reduces

DishTV has reported a loss of Rs 762 million in the third quarter of FY10, as compared to a loss of Rs 561 million in Q2 of this fiscal. The company had reported a loss of Rs 1,180 in the corresponding quarter of FY09.

However, revenues of the company increased by 8 per cent to Rs 2,786 million in Q3, as compared to Rs 2,579 in Q2 of this fiscal. It had reported revenues of Rs 1,927 million in Q3 FY09. Out of its DTH revenues, Rs 2,140 million came from subscriptions, while Rs 390 million came from rental, Rs 55 million from carriage fees and the balance from miscellaneous.

Although the company maintains a 35 per cent share of the six-player DTH market with a total subscriber base of 6.4 million (adding 0.55 million new subscribers in Q3 FY10), its ARPU dropped to Rs 135 as compared to Rs 139 in Q2 FY10. “Our ARPU is low because most of our subscribers are in acquisition mode,” said Jawahar Goel, MD, DishTV, in the analysts conference call. The company was expecting to reach an ARPU of Rs 145-150 by the first quarter of next fiscal.

The company also saw an increase in the churn rate of 0.5 per cent per month last quarter to 0.9 per cent per month this quarter. The average subscriber acquisition cost for the company during the third quarter was Rs 2,477. Total cost of the company increased by 13 per cent over the trailing quarter at Rs 2,659 million. Marketing cost in Q3 stood at Rs 260 million, as compared to Rs 15 million in Q2 FY10. The content cost also increased because of the addition of 2-3 new channels in the bouquet.

DishTV is also working on Conditional Access Module (CAM), which will help them tap customers having digital set-top boxes. According to Goel, the product was still at a planning and development stage, and added that the company would talk about it once it was launched.

During the quarter, DishTV raised $100 million through issue of Global Depository Receipts. “The funds will help us raise 4 million more subscribers,” said Goel on the call. The company also launched a new brand identity, “Ghar Aayi Zindagi”, in this quarter. As part of this new brand positioning, DishTV also changed its logo, depicting a more progressive, approachable, ambitious and contemporary brand identity, aiming to connect strongly with its existing and new subscribers.

Subhash Chandra, Chairman, DishTV, said in a company statement, “While 2.4 million new subscribers have opted for DTH during this quarter, more than 6.5 million new subscribers have taken DTH service in the nine months ending December 2009. The DTH category pioneered by DishTV in India has caught the fancy of television users in India, and I am happy to report that DishTV continues to maintain leadership position in this category.”

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