DTH is a long-term game, and change is happening: Shashi Arora
source- DTH is a long-term game, and change is happening: Shashi Arora | Business Standard
A late entrant in the highly competitive direct-to-home (DTH) segment, Airtel Digital TV has shown quick growth in subscribers across India. It claims second position in net subscriber base and has an impressive ARPU (average revenue per user) of Rs 183. Shashi Arora, its chief executive, DTH/Media, spoke with Gaurav Laghate on the plans ahead. Edited excerpts:
How has been the uptake of Airtel DTH in the second phase of digitisation?
It is going very well. Of the 38 cities, the numbers are pretty good in 20. There are cities like Howrah, following the Kolkata track record, and a few others, where there is no activity but in some cities, our subscriber growth is five times. It's a long-term game, where the change is happening.
Do you have enough set-top-boxes (STBs) in stock?
We do; all the DTH players, for that matter, will. We have been dealing with STBs since inception. We have put boxes in eight million homes and are ready infrastructure-wise, whether it is distribution or inventory or warehousing. Even in the most rural of the geographies, if a customer wants even one box, we have service paraphernalia to provide a new one or a replacement. So, both from a sales and serving prospective, we are fully equipped.
How much transponder capacity do you have? Have you signed for more?
We have a little bit of spare capacity. While in the short term we do not need more bandwidth, we would need transponders in the medium term. Right now, we have 12 Ku-band transponders but as a part of the DTH industry, long-term capacity is critical to our business. We keep going to Isro (the national space body) for any additional capacity. They have a rigorous procedure for allotting.
That's why you had to shift to another satellite two years earlier, due to transponder issues?
We had migrated from the INSAT 4CR to the SES 7 satellite, as we got not just five additional transponders (it had seven on INSAT 4CR) but we saw a greater opportunity in the future on capacity. The line of sight on how much capacity we will get on this angle was much more visible and clear.
It was a huge task of changing the angle of all the dish antennas at our subscribers' homes, which took us a couple of months. It was an additional cost entirely on our books but the advantage was sharper and clearer in the long learn. And as I said, long-term capacity is critical to us.
Do you see consolidation in the DTH space, as there are already six private players?
There are already seven players, including DD Direct. Everyone has their own plan and while it is true that in no other country are there are so many, India is also a very different market and there are many TV homes which do not have cable yet. So, there are enough opportunities.
Specifically about consolidation, I can't comment about others but as in any industry, after the top three-four players, the rest remain in losses.
You also had an operating loss of Rs 720 crore in FY12 on a revenue of Rs 776 crore. How are you planning to turn around?
We are on our right path and while our results will be out in May, in the second and third quarter of FY13, we were Ebitda-positive (earnings before interest, taxes, depreciation and amortisation). Of course, we were negative on the Ebit level, as we subsidise our boxes, so that the entry level for a customer should not be high.
While cable TV always claims an edge over DTH, in terms of broadband and the number of channels, how are you equipped to take on that challenge?
What we give to our subscribers, a freedom to choose your set of channels, is something a digital cable is not providing. A customer in Delhi can demand and get any language channel. The second is servicing. The kind of infrastructure we have, the warehouse facility, the service network, etc, is unmatched. If there is any fault in a STB, we replace it immediately. As I said, we have been dealing with boxes since inception and we have a strong network to deploy these in the most rural of places. Additionally, we have so many interactive services. And, unlike cable, there is no transmission loss or a problem of cable cuts. These will always give us an edge over cable.
A major problem has been bad weather conditions, which disrupts DTH signals. How can you combat that?
We are the only DTH with a rain diversity system. From our end, if there is heavy rain, we shift our uplinking from Manesar (near Delhi) to the Bangalore site. We have done our best to ensure good signals to consumers. And, don't forget, in the case of cable, if the cable operator has a power cut, the consumer won't get a signal even if he has power supply.
DTH industry players always speak about high taxation. How bad is the situation?
The problem is that we paying 33 per cent of our revenues in taxes and 38-40 per cent goes as content cost. Yes, taxation is very high, with 10 per cent as licence fee to the information and broadcasting ministry, a weighted average of 11 per cent as entertainment tax to state governments and 12 per cent service tax to the central government.
What we ask is only a little support from the government in terms of clarity. Why this double taxation, of entertainment as well as services tax? And, DTH is a capital-intensive business. There is substantial investment in infrastructure, technology, transponders fee and servicing.
We also want the process of bandwidth approval to be fast. While getting bandwidth is easy, the approvals take a lot of time.
You are one of the late entrants. How has been the journey?
We are a young player; we started operations in October 2008. But we already have about eight million net subscribers and there is a lot of untapped market. Our ARPUs have been better than many others, as we have a good customer mix of urban versus rural and metro versus non-metros. The problem is that we have to keep up with the larger environment of not just DTH but also with the cable industry.
source- DTH is a long-term game, and change is happening: Shashi Arora | Business Standard
A late entrant in the highly competitive direct-to-home (DTH) segment, Airtel Digital TV has shown quick growth in subscribers across India. It claims second position in net subscriber base and has an impressive ARPU (average revenue per user) of Rs 183. Shashi Arora, its chief executive, DTH/Media, spoke with Gaurav Laghate on the plans ahead. Edited excerpts:
How has been the uptake of Airtel DTH in the second phase of digitisation?
It is going very well. Of the 38 cities, the numbers are pretty good in 20. There are cities like Howrah, following the Kolkata track record, and a few others, where there is no activity but in some cities, our subscriber growth is five times. It's a long-term game, where the change is happening.
Do you have enough set-top-boxes (STBs) in stock?
We do; all the DTH players, for that matter, will. We have been dealing with STBs since inception. We have put boxes in eight million homes and are ready infrastructure-wise, whether it is distribution or inventory or warehousing. Even in the most rural of the geographies, if a customer wants even one box, we have service paraphernalia to provide a new one or a replacement. So, both from a sales and serving prospective, we are fully equipped.
How much transponder capacity do you have? Have you signed for more?
We have a little bit of spare capacity. While in the short term we do not need more bandwidth, we would need transponders in the medium term. Right now, we have 12 Ku-band transponders but as a part of the DTH industry, long-term capacity is critical to our business. We keep going to Isro (the national space body) for any additional capacity. They have a rigorous procedure for allotting.
That's why you had to shift to another satellite two years earlier, due to transponder issues?
We had migrated from the INSAT 4CR to the SES 7 satellite, as we got not just five additional transponders (it had seven on INSAT 4CR) but we saw a greater opportunity in the future on capacity. The line of sight on how much capacity we will get on this angle was much more visible and clear.
It was a huge task of changing the angle of all the dish antennas at our subscribers' homes, which took us a couple of months. It was an additional cost entirely on our books but the advantage was sharper and clearer in the long learn. And as I said, long-term capacity is critical to us.
Do you see consolidation in the DTH space, as there are already six private players?
There are already seven players, including DD Direct. Everyone has their own plan and while it is true that in no other country are there are so many, India is also a very different market and there are many TV homes which do not have cable yet. So, there are enough opportunities.
Specifically about consolidation, I can't comment about others but as in any industry, after the top three-four players, the rest remain in losses.
You also had an operating loss of Rs 720 crore in FY12 on a revenue of Rs 776 crore. How are you planning to turn around?
We are on our right path and while our results will be out in May, in the second and third quarter of FY13, we were Ebitda-positive (earnings before interest, taxes, depreciation and amortisation). Of course, we were negative on the Ebit level, as we subsidise our boxes, so that the entry level for a customer should not be high.
While cable TV always claims an edge over DTH, in terms of broadband and the number of channels, how are you equipped to take on that challenge?
What we give to our subscribers, a freedom to choose your set of channels, is something a digital cable is not providing. A customer in Delhi can demand and get any language channel. The second is servicing. The kind of infrastructure we have, the warehouse facility, the service network, etc, is unmatched. If there is any fault in a STB, we replace it immediately. As I said, we have been dealing with boxes since inception and we have a strong network to deploy these in the most rural of places. Additionally, we have so many interactive services. And, unlike cable, there is no transmission loss or a problem of cable cuts. These will always give us an edge over cable.
A major problem has been bad weather conditions, which disrupts DTH signals. How can you combat that?
We are the only DTH with a rain diversity system. From our end, if there is heavy rain, we shift our uplinking from Manesar (near Delhi) to the Bangalore site. We have done our best to ensure good signals to consumers. And, don't forget, in the case of cable, if the cable operator has a power cut, the consumer won't get a signal even if he has power supply.
DTH industry players always speak about high taxation. How bad is the situation?
The problem is that we paying 33 per cent of our revenues in taxes and 38-40 per cent goes as content cost. Yes, taxation is very high, with 10 per cent as licence fee to the information and broadcasting ministry, a weighted average of 11 per cent as entertainment tax to state governments and 12 per cent service tax to the central government.
What we ask is only a little support from the government in terms of clarity. Why this double taxation, of entertainment as well as services tax? And, DTH is a capital-intensive business. There is substantial investment in infrastructure, technology, transponders fee and servicing.
We also want the process of bandwidth approval to be fast. While getting bandwidth is easy, the approvals take a lot of time.
You are one of the late entrants. How has been the journey?
We are a young player; we started operations in October 2008. But we already have about eight million net subscribers and there is a lot of untapped market. Our ARPUs have been better than many others, as we have a good customer mix of urban versus rural and metro versus non-metros. The problem is that we have to keep up with the larger environment of not just DTH but also with the cable industry.
