Motilaloswal has given their report under the head Synergies and more on combined entity DishTv and D2H and how both companies will be benefited
Seeing following points we expect them to give subscriber benefit of increased profit 2018 end or in 2019 onwards,so rate per channels although even today it is cheaper but will be further cheaper than Tatasky/Airtel
1) DITV-VDTH to benefit from DITV’s legacy content cost,advantage, and save INR1.7b in FY19 and INR2.3b in FY20. DITV currently pays ~INR52/net subscriber per month (28% of revenue) against VDTH’sINR71/net subscriber per month (38% of revenue) as content cost
2) A standard 36MHz transponder can uplink/downlink 24-28 SD or 12-14 HD channels. To increase DITV-VDTH’s HD,count to ~150 channels (currently ~60 HD channels each), the platform would need a transponder capacity of ~415MHz. The remaining 585MHz,(assuming the combined entity operates at 1,000MHz) is sufficient to cater to the SD channel needs. We expect DITV-VDTH to save INR3.2b-3.7b (47-48%of total EBITDA gains) in content and transponder costs
3) Ad revenues too are likely to jump, as scale helps fish for higher ad rates.Overall, we expect carriage and ad revenues for the combined entity to outpace.the sum of DITV and VDTH’s proforma revenues by INR470m-490m
However, Dish TV and Videocon d2h currently operate on different satellites, which have a 7-degree gap in orientation. For a common platform, DITV-VDTH would need
one of the following:
1. A converter (low-noise block) to cover the gaps in content feeds. However, this is an expensive proposition, as DITV-VDTH would have to fork out INR300-350/VDTH net subscriber (a one-time outlay of INR4.9b-5.7b).
2. Change in orientation of DITV antennas so that they are aligned with VDTH’s and cover VDTH subscribers as well. This would entail a cost of ~INR100/net subscriber (INR1.6b-1.7b). We expect DITV-VDTH to make a one-time outlay of INR5b, considering the logistical challenges in aligning antenna orientations.
OurFY19E capex includes an INR5b outlay towards LNB converters. Simulcrypting of signals will enable VDTH’s subscribers to decode DITV’s signals
It is a win win situation for both and both together will be Earning huge profit and some part of profit will come in form of lower package rates