tatasky_2006
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On November 18, 2014, Mr.G Sambashivam (CFO) of Tata Sky attended AXIS CAPITAL CONFERENCE 2014 and interacted with the fund managers and investors key takeaways from the interaction are as follows -
• Tata Sky – market leader in High Definition (HD) subscribers
o Tata Sky has ~10 mn net subscribers currently and plans to add 1.5 mn net subs annually over next 2-3 years.
o It is the market leader in HD subscribers with 65% market share and ~50% of incremental HD subscribers currently
Management remains focused to convert its existing Standard Definition (SD) subscribers to HD subscribers
• The company offers ~300 channels with 24 HD channels currently and has plans to increase its HD channels to 100 over next 3-4 years.
• ARPU to post 5-6% CAGR over next 2-3 years
o Given higher share from HD subscribers, Tata Sky’s ARPU is the highest in the industry at Rs 230/ sub.
o Management expects its ARPU to post ~5% CAGR over next 2-3 years due to higher HD share and price hikes.
o The company recorded 7-8% growth in its ARPU over the last 1-2 years
• Subscriber payback period of ~4 years despite higher Subscriber Acquisition Cost (SAC)
o Given its focus on HD sub additions and higher marketing spend, Tata Sky’s SAC is relatively higher at Rs 2,500 currently.
o However higher ARPU compensates for the same, resulting in an average payback period of ~4 years per subscriber
• Content deals in place
o Given its higher share of HD subscribers, Tata Sky’s content cost accounts for 30-32% of its revenue.
o The company has signed most of its content deals over next 3-5 years
• Tata Sky – market leader in High Definition (HD) subscribers
o Tata Sky has ~10 mn net subscribers currently and plans to add 1.5 mn net subs annually over next 2-3 years.
o It is the market leader in HD subscribers with 65% market share and ~50% of incremental HD subscribers currently
Management remains focused to convert its existing Standard Definition (SD) subscribers to HD subscribers
• The company offers ~300 channels with 24 HD channels currently and has plans to increase its HD channels to 100 over next 3-4 years.
• ARPU to post 5-6% CAGR over next 2-3 years
o Given higher share from HD subscribers, Tata Sky’s ARPU is the highest in the industry at Rs 230/ sub.
o Management expects its ARPU to post ~5% CAGR over next 2-3 years due to higher HD share and price hikes.
o The company recorded 7-8% growth in its ARPU over the last 1-2 years
• Subscriber payback period of ~4 years despite higher Subscriber Acquisition Cost (SAC)
o Given its focus on HD sub additions and higher marketing spend, Tata Sky’s SAC is relatively higher at Rs 2,500 currently.
o However higher ARPU compensates for the same, resulting in an average payback period of ~4 years per subscriber
• Content deals in place
o Given its higher share of HD subscribers, Tata Sky’s content cost accounts for 30-32% of its revenue.
o The company has signed most of its content deals over next 3-5 years