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Prices may be raised by 4-5% after Diwali: Dish TV

JitendraKumar

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Stock price of Dish TV fell 6 percent intraday
on Tuesday due to subdued FY17 guidance by
the company’s board.

The management guidance of FY17 subscriber
addition is similar to what the company
delivered in FY16.

In an interview with CNBC-TV18, Jawahar Goel,
Promotor and MD of Dish TV, said the average
revenue per user (ARPU) for high definition
subscribers stood at Rs 384 and sees no
inorganic growth plan at this point.

He further said that a price hike of 4-5 percent
may be taken post Diwali.


Below is the verbatim transcript of Jawahar
Goel’s interview with Mangalam Maloo, Reema
Tendulkar & Nigel D'Souza on CNBC-TV18.
Nigel: The guidance for the next year is at
round 1.5 million approximately. Why is it so
tepid, why you are not expecting a bigger
growth?

A: I think there is some confusion with this
million subscriber and 1.5 million subscriber. I
don’t know from where it has come. The
company’s guidelines and internal target for
gross addition is around 3.5 million subscriber
for this year, 3.5 million gross basis and upside
of 1.5 million on the net basis.
So, there has been some this confusion and
seems some newspaper has intermingled the
numbers of 2015 and 2016. So, we have been
growing the revenue, our subscription revenue
is grown by more than 15.5 percent. However,
the media report has come that it has de-
grown.


Reema: You have guided for FY17 ARPU growth
of nearly about 3 percent. Where is it going to
come from because recently you have launched
low ARPU products whether it is Dish 99 which
you launched in December 2015 or Zing which
you had launched exactly a year ago? So, the
monthly tariffs of these programmes are
significantly lower and while they will contribute
your subscriber addition they could drag down
your ARPUs. So, could you tell us where isthe
confidence coming that you will be able to
improve your ARPUs by nearly 3 percent for the
next year?
A: Rs 99 is optical number so a consumer has
to opt for at least three packs. So, altogether it
makes Rs 174 that is one part. So, number two
we had seen in the past that we were giving a
wholesome content in the entry level pack.
Thirdly, in Digital Addressable System (DAS) III
and IV market the paying capacity of the
consumer or the cable rates are very low. So,
this product has been a very well conceived and
thought through strategy.


We launched Zing at a lower rate almost two
and a half to three years back. We had
gradually taken up the pricing.
To come to your answer, we are now the high
definition content. 20 more channels are in the
pipeline to come in this year from the
broadcasting companies.
Our high definition
ARPU is around Rs 384.


Mangalam: Another thing that missed the street
estimates was also the EBITDA margin which
came in lower on account of higher content
cost as well as licence cost. You have some
content renegotiations coming by or lined up for
September? What is your sense on that how
much could the content cost rise by and
concomitantly what could your EBITDA margins
look like in FY17?
A: Our aim is to grow the revenue from ARPU
and these new additions etc at around 14-15
percent annual basis, which we have been able
to grow. The content cost growth on absolute
terms has been 11 percent. So, that is in line
because our revenues are growing fast and it is
almost 26-27 percent of our middle line, which
if grows by 10-11 percent, it doesn’t bother us.
Mangalam: Could you also give us a sense on
what are the kind of price hikes that you will be
taking in the next fiscal?
A: In the month of March we have taken a
price hike of 6-10 percent. The next price hike
will be after Diwali.


Mangalam: How much will that be?
A: This will beanother 4 to 5 percent depending
on the pack. We don’t take the price hike
across the board. It is based on the some
science our marketing team apply and then we
apply that.
This is premature to talk about the next price
hike. Let us see what we will do and when
goods and service tax (GST) rolls out then
maybe we as industry decide to take the GST
out. It will be much simpler to pass on to the
consumer. We may even reduce some price.
Reema: Your EBITDA guidance for FY17 is 35
percent, is that right?
A: That is right.

Reema: So, that is an improvement of 160 basis
points on a year-on-year basis?
A: Yes.
Reema: You said 11 percent was the increase
in the content cost for last year. What is your
expectation of how much it will go up in this
year that we are in after the renegotiations?
A: In absolute terms, when we are growing our
revenues by 15 percent and content cost to
cover the new programming, new broadcasting
channel coming in so the 10 percent growth in
the absolute terms is quite acceptable.


Nigel: Are you in talks to buy Videocon ’s DTH
business or any other business of Videocon?
A: We only talk to them on association level
otherwise we have no discussions.



Mangalam: Any inorganic growth plans coming
by because we are hearing of a lot of
consolidation in this industry?
A: I don't think the market is ready yet. If
anything happens, we will have to wait for
another two years.



Prices may be raised by 45 after Diwali: Dish TV
 

SPANDAN

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So Dishtv will be adding 20 HD channels in days to come.
 

TushShar

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Yes its written "20 :hd channel are in pipeline this year.." :eek:hya
 

RajKumar

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in this article......bold letters are indicating about 20 :hd
 
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