Airtel Digital TV slips into operating loss after 4 quarters of profit

MUMBAI: Airtel Digital TV, the direct-to-home (DTH) business of telecom major Bharti Airtel, has slipped into operating loss for the three months through June, after four straight quarters of profit.

The DTH operator‘s operating loss for the fiscal-first quarter was Rs 23 million compared to operating profit of Rs 209 million in the trailing quarter. In the three successive quarters beginning April-June 2011, the company had reported operating profits of Rs 50 million, Rs 116 million and Rs 90 million.

The company has apparently changed the procedure for how it accounts for the content cost.

Airtel Digital TV added 172,000 net subscribers during the quarter ended 30 June 2012, representing 8 per cent growth from the trailing quarter, but monthly churn climbed to 1.7 per cent, from 1.2 per cent.

The company‘s customer base stood at 7.4 net million customers. Market leader Dish TV, the first to launch DTH services in India, has 9.8 million net subscribers while its churn is 1 per cent for the fiscal first quarter (from 1.1 per cent in exit quarter of FY‘12).

Airtel Digital TV‘s ARPU (average revenue per user) stayed flat at Rs 166, higher than Dish TV‘s Rs 156 (despite rising from Rs 151 in trailing quarter).

The company‘s loss before interest and tax jumped 16.49 per cent to Rs 2.26 billion for the first quarter ended 30 June compared to a loss of Rs 1.94 billion in the preceding quarter.

Airtel Digital TV‘s revenue during the quarter remained flat at Rs 3.65 billion, representing a change of 2.56 per cent from the earlier quarter. Revenue for the year-ago period was Rs 2.93 billion.

During the quarter, the company incurred a capital expenditure of Rs 3.24 billion in digital TV services, up from Rs 981 million in the preceding quarter. In the previous fiscal, the capex stood at Rs 3.01 billion.

As of 30 June 2012, Airtel‘s cumulative investment on the digital TV services stood at Rs 35.40 billion, up from Rs 32.98 billion in the preceding quarter. In the corresponding fiscal, the cumulative investments was Rs 29.29 billion.

During the quarter, the company expanded its footprint to 616 districts, up from 609 districts in the earlier quarter, covering 96 per cent of the populace.

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