Technology

Dish TV to pump in Rs 10 billion for DTH ramp-up













MUMBAI: Dish TV is planning to pump in Rs 10 billion over the next two and a half years as it wants to aggressively ramp up subscribers in a direct-to-home (DTH) market that is going to soon see new entrants.


The funding of Zee Group‘s demerged DTH business will be through a mix of debt and equity. "We are looking at a 30-40 per cent debt component. For equity, we are open to all options," says Dish TV CEO Arun Kapoor.


DTH operators are sinking in big money as they subsidise costs to acquire customers. While Dish TV has already invested Rs 7 billion in the DTH business, Tata Sky has put in Rs 10 billion and plans to pump in an additional 20 billion.

 

Dish TV‘s net loss for FY06 was Rs 790 million on the back of subsidies and marketing expenses while revenue was at Rs 818 million. The company expects to end this fiscal on a turnover of Rs 1.7 billion and a net loss of Rs 1.5 billion.


Tata Sky has said that it would take 5-7 years to break even as it has to absorb the hardware and content subsidy. Dish TV, however, hopes to enjoy a cash break even situation by FY09 while operating margins, currently negative, are set to be at 26 per cent.


Dish TV expects to add 1.1 million subscribers in the next fiscal. The company has already touched 1.9 million subscribers, a little below its target of 2.3 million for the current fiscal. Tata Sky has mopped up half a million subscribers and says it is on course to achieve its target of 1 million customers in the first year of operations.

 

Dish TV‘s average revenue per user (ARPU), which was hovering around Rs 190, has jumped to Rs 230. The cost of content is about 65 per cent of the ARPU. "This will fall down to 45 per cent over the next two years," says Kapoor.



Dish TV plans to get listed either on Monday or Wednesday next week, making it the first DTH company in India to be available on the bourses.



The DTH space will bring in new players like Kalanithi Maran‘s Sun Direct and Anil Ambani‘s Bluemagic this year. Telecom major Bharti Airtel Limited has also floated a wholly owned subsidiary, Bharti Telemedia, for its DTH service.

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