Cable TV

Lower carriage and internet subs fees pull down Ortel numbers in first quarter

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BENGALURU: A forty four percent year-on-year (y-o-y) decline in carriage fees and a thirty five percent y-o-y  decline in internet subscription fees for the quarter ended 30 June 2017 (Q1-18, current quarter, first quarter of fiscal 2018) resulted in decline of some major numbers for Ortel Communications Limited (Ortel). The company has reported a net loss of Rs 29 million in Q1-18 as compared to a profit after tax of Rs 1 million in Q1-17.

Ortel reported carriage fees of Rs 62 million for Q1-18 as compared to Rs 89 million in the corresponding year ago quarter. Despite a 4.5 percent increase in cable subscription fees, the company’s Total cable TV services revenue declined 5.5 percent in the current quarter to Rs 371 million as compared to Rs 384 million in Q1-17. Ortel reported cable subscription fees of Rs 288 million as compared to Rs 277 million in the corresponding year ago quarter. Connection fees rose to Rs 21 million in the first quarter of fiscal 2018 as compared to Rs 18 million in Q1-17.

Ortel reported internet subscription revenue on lower Average Revenue per user at Rs 57 million for Q1-18 as compared to Rs 88 million in Q1-17. Internet connection fees declined to Rs 4 million in the current quarter as compared to Rs 7 million in Q1-17. Overall broadband revenue declined 35.8 percent y-o-y in Q1-18 to Rs 61 million as compared to Rs 95 million in Q1-17.

Coupled with a 13.8 percent decline in Ortel’s Infrastructure and Leasing segment revenue, the company’s total operating revenue declined 8.6 percent y-o-y in the current quarter to Rs 468 million from Rs 512 million.

Subscription number, ARPU

The company’s cable TV and internet subscriber bases declined quarter-over-quarter (q-o-q).  Ortel’s cable TV subscriber base in Q1-18 was 747,528 in Q1-18 as compared to 750,471. Broadband subscriber base in the current quarter declined to 70,273 from 73,087. Cable TV ARPU for the current quarter declined by Rs 1 to Rs 137 from Rs 138 in the immediate trailing quarter. In Q1-17, the company has reported a much higher Cable TV ARPU at Rs 157. Broadband ARPU in Q1-18 was substantially lower at Rs 267 as compared to Rs 319 in the immediate trailing quarter and Rs 401 in the corresponding year ago quarter.

Major Expense heads

Ortel’s total expenses in the current quarter declined 7.7 percent y-o-y to Rs 359 million from Rs 389 million. Programming cost increased to Rs 115 million in Q1-18 as compared to Rs 100 million in Q1-17.Broadband bandwidth cost increased to Rs 25 million from Rs 22 million. Digital bandwidth cost increased to Rs 15 million from Rs 13 million. Employee benefits expense declined to Rs 54 million from Rs 62 million. Finance costs increased to Rs 71 million from Rs 64 million. Other expenses in the current quarter declined to Rs 114 million from Rs 135 million in the corresponding year ago quarter.

Company speak

Ortel managing director and CEO Bibu Prasad Rath said, “This has been a challenging period for the Company as intense competition in our core markets and new subscriber integration issues in new markets  continued to impact our performance. The management team is working towards improving our position and expect to deliver better results by the end of this fiscal year. While we are evaluating fund raise possibilities to bridge our short-term capital requirement, our focus in FY18 would be to consolidate the operations and improve the operational matrix which would result in notable cash flow generation. Overall, we remain confident of the strength of fully controlling the ‘last mile’ network and the B2C business model, which we believe will enable us to tide over this difficult period.”

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