DISH TV RACES TO BREAK EVEN

Raja

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DishTV - India's oldest and largest DTH platform is racing to break even, when it touches 10 million subscribers. However a closer look at the third quarter results declared by the company (for the 3 months ended December 2010), throws up some very interesting details on the huge number of de-authorised STBs, subscriber churn, carriage fees, ARPUs and cost of content.

REDUCED LOSSES

Dish TV has reduced its third-quarter (Q-3 ended Dec 2010) net loss to Rs 44.3 Crores. Simultaneously, it added 1.1 million new subscribers, of which 500,000 were acquired in the month of November 2010.

9.4M STBS BUT 7.7M SUBS

DishTV's gross subscriber base has now reached 9.4 million, while the net subscriber base is 7.7 million. The DTH operator has therefore admitted to 1.7 million (18%) of de-authorised / dark STBs that it has subsidised, but are not yielding any revenues.

Dish TV's subscriber acquisition cost (SAC) increased marginally to Rs 2,142 from Rs 2,083 in the trailing quarter. Dish TV clarified that it is largely due to higher selling and distribution expenses and enhanced box subsidy due to aggressive competition at the acquisition front.

Subscriber churn rose to 0.9% per month compared to 0.7% per month till last quarter.

CONTENT COST & CARRIAGE FEES

Content cost was maintained at 39% of the subscription revenue, same as the previous quarter.

Dish TV's revenues stood at Rs 375 Crores, representing a 14.1% growth over the trailing quarter and a 35% growth over the year-ago period.

Subscription revenue accounted for Rs 309 Crores, up 14.4% from the second quarter.

The balance revenue of Rs 66 Crores probably represents carriage fees extracted from broadcasters.

RETURNS ON INVESTMENT

Dish TV's ARPU (Average Revenue Per User) went up marginally to Rs 142 as compared to Rs 139 in the trailing quarter and Rs 135 in corresponding quarter of the previous fiscal.

The EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) for the quarter under review was Rs 684 million, up from Rs 523 million posted in the previous quarter.

Dish TV India chairman Subhash Chandra said, "Having consistently garnered an incremental market share above 25% in a 6 player market, Dish TV's strategic initiatives have been delivering commendable results."

Dish TV MD Jawahar Goel said, "It was a strong quarter operationally and we are now close to crossing the hump. Dish TV is just half a million less than the critical 10 million subscriber mark and remains committed to break even at the bottom-line and turn free cash flow positive at the earliest. With recent operational initiatives, margin improvements and cash generation would get further strengthened."


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