In Q1, Dish TV reports net loss of Rs 13.9 cr, subscription revenue up 5% Y-o-Y

Dish TV India Limited today reported its first quarter fiscal 2018 consolidated subscription revenues further stating that digitisation in rural areas could boost growth


Dish TV India Limited (Dish TV) today reported its first quarter fiscal 2018 consolidated subscription revenues of Rs. 6,917 million and operating revenue of Rs. 7,389 million. EBITDA for the quarter stood at Rs. 2,012 million. EBITDA margin was recorded at 27.2%. Net loss for the quarter was Rs. 139 million.   


After the impact of demonetisation in the previous quarters the subscription revenue for the quarter grew 11.5% sequentially to close at Rs. 6,917 million and grew 5 per cent Y-o-Y. Average revenue per user (ARPU) grew 10.4% Q-o-Q and was recorded at Rs. 148.


Ramadan affects subscription growth and recharges


In the holy month of Ramadan when many Muslims opt away from television and other sources of entertainment, Dish TV felt a minor pinch. Ramadan during the last month of the first quarter moderated subscriber additions and recharges. Unlike fiscal 2017, this year the period of Ramadan fell completely in the first quarter as against a Q1-Q2 split last year. Involvement in the GST transition process during the last few days of the quarter also diluted some managerial attention towards the business.  


Seasonality impacted the growth in advertisement and bandwidth revenues however, the company remains highly optimistic about the future growth potential of these two revenue line items.


Amalgamation of Videocon D2h into Dish TV


October 1, 2017 is scheduled to be the date when all the arrangements would be in place making Dish TV one of the world’s largest DTH platform. Jawahar Goel, Chairman and MD, Dish TV India, said, “The proposed amalgamation will further help create scale in the highly fragmented TV distribution landscape in India while creating significant synergies through the combination. Drawing inference from our initial estimates and integration meetings held so far, we expect approximate net synergies from the amalgamation to the tune of Rs. 1,800 million in FY18 and Rs. 5,100 million in FY19. Significant amongst these would be synergies arising from unified content contracts as each major contract becomes due for re-setting.” 


GST and its implications


Dish TV states that businesses would also get benefitted by savings in administration, litigation as well as compliance costs that will result from a simpler tax regime. 


Goel said, “Dish TV has successfully transitioned to the GST regime. The DTH industry has seen a reduction in the overall indirect tax rates under GST. Though benefits due to the unified tax may take some time to reflect in numbers, the sheer check on tax avoidance in the informal cable sector should be immediately helpful in reducing irrational competition from cable. The Harmonized System Nomenclature (HSN) codes, unit and rate which need to be separately declared in the invoice in value chain right from the broadcasters to the local cable operator, under GST will give a logical and systematic classification to goods and services thus reducing the possibility of misdeclaration by businesses. The total amount of GST to be collected and payable by Dish TV during the current quarter would be to the tune of Rs. 1,350 million.”


The May 2018 deadline for electrification of all villages and 15 August 2022 for electrification of all households could be a good news for the Pay-TV industry as electricity shortage has always had a negative impact on consumption of TV entertainment. With all households in the country getting electrified, Dish TV predicts a spike in growth.


Rural focus for growth


With more than 75% of its subscriber base outside urban areas, Dish TV has always been a rural heavy DTH business. Goel, said, “With digitisation spreading to rural India, our primary objective is to address the needs of pay-TV viewers in small towns and villages. For the first time in the history of DTH industry in India, indirect tax rates have been separately communicated to the consumers. In an attempt to make TV viewing affordable for viewers, Dish TV introduced the Rs. 160 per month (plus taxes) pack this month. In addition, by partly adopting TRAI’s new Tariff Order, Dish TV also started offering all channels, except Sports and select south channels, at affordable ala-carte prices of Rs. 8.50 and Rs.17.00 (plus taxes) per channel per month for SD and HD respectively. It would be worthwhile to mention here that none of these new offerings would be margin dilutive for our business.” 

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