Dish TV India reports muted numbers for first quarter


BENGALURU: The Essel Group’s television direct to home (DTH) Dish TV India Limited (Dish TV) reported 5 percent and 5.1 percent declines in subscription and operation revenue for the quarter ended 30 June 2017 (Q1-18, current quarter) as compared to the corresponding year ago quarter (Q1-17). Dish TV says that it is making a smart recovery from the lows of the demonetization impacted previous quarters. The company reported subscription revenue of Rs 6,917 million in the current quarter as compared to Rs 7,282 million in Q1-17. Operating revenue in Q1-18 was Rs 7,389 million as compared to Rs 7,786 million in Q1-17.

Dish TV reported a net loss of Rs 139 million in the current quarter as compared to profit after tax of Rs 361 million in Q1-17. EBIDTA in Q1-18 was 22.9 percent down at Rs 2,016 million as compared to Rs 2,610 million in Q1-17. Total comprehensive loss in the current quarter was a Rs 134 million as compared to total comprehensive income of Rs 364 million in the corresponding year ago quarter.

Dish TV reported net addition of 0.186 million subscribers in the current quarter which takes it subscriber base to 15.7 million. The company had closed the previous quarter (last quarter of fiscal 2017 or Q4-17) with 15.5 million subscribers.

Dish TV CMD Jawahar Goel, said, “With digitization spreading to rural India, our primary objective is to address the needs of pay-TV viewers in small towns and villages. For the first time in the history of DTH industry in India, indirect tax rates have been separately communicated to the consumers. In an attempt to make TV viewing affordable for viewers, Dish TV introduced the Rs. 160 per month (plus taxes) pack this month. In addition, by partly adopting TRAI’s new Tariff Order, Dish TV also started offering all channels, except Sports and select south channels, at affordable ala-carte prices of Rs. 8.50 and Rs.17.00 (plus taxes) per channel per month for SD and HD respectively. It would be worthwhile to mention here that none of these new offerings would be margin dilutive for our business.

Dish TV’s total expenditure in Q1-18 increased 6 percent to Rs 7,788.5 million (105.4 percent of operating revenue) from Rs 7,350.6 million (94.4 percent of operating revenue) in the corresponding quarter of the previous year. Employee Benefit Expense in Q1-18 increased 1.5 percent to Rs 388.4 million (5.3 percent of operating revenue) from Rs 382.6 million (4.9 percent of operating revenue) in Q1-17. Operating Expenses increased 5.2 percent y-o-y in Q1-18 to Rs 3,731.5 million (50.5 percent of operating revenue) from Rs 3,547.5 million (45.6 percent of operating revenue) in the corresponding quarter of the previous year. Other expenses were flat at Rs 1,223.8 million (16.6 percent of operating revenue) as compared to Rs 1,223.6 million (15.7 percent of operating revenue) in Q1-17. Finance costs increased 12.1 percent y-o-y in Q1-18 to Rs 589.6 million (8 percent of operating revenue) from Rs 526.1 million (6.8 percent of operating revenue) in Q1-17.

In its earnings release, Dish TV says that it is excited about the mega size, strength and reach that it is going to achieve post the formation of Dish TV Videocon Limited. The new company would be riding on the strength of a resurgent economy and a growing market that should help enhance the efficiencies from this mega merger. It says that the combination of DishTV and Videocon D2h would create one of the World’s largest DTH platform.

Goel, said, “The proposed amalgamation will further help create scale in the highly fragmented TV distribution landscape in India while creating significant synergies through the combination. Drawing inference from our initial estimates and integration meetings held so far, we expect approximate net synergies from the amalgamation to the tune of Rs. 1,800 million in FY-18 and Rs. 5,100 million in FY-19. Significant amongst these would be synergies arising from unified content contracts as each major contract becomes due for re-setting.”

Speaking about GST, Goel informed, ““Dish TV has successfully transitioned to the GST regime. The DTH industry has seen a reduction in the overall indirect tax rates under GST. Though benefits due to the unified tax may take some time to reflect in numbers, the sheer check on tax avoidance in the informal cable sector should be immediately helpful in reducing irrational competition from cable. The Harmonized System Nomenclature (HSN) codes, unit and rate which need to be separately declared in the invoice in value chain right from the broadcasters to the local cable operator, under GST will give a logical and systematic classification to goods and services thus reducing the possibility of misdeclaration by businesses. The total amount of GST to be collected and payable by Dish TV during the current quarter would be to the tune of Rs. 1,350 million.”

Addressing concerns being raised on whether data prices could hit rock bottom levels such that some entertainment viewers would prefer streaming content, as perceived to have been done in the West, instead of sticking to the traditional cable/DTH distribution methods, Goel, said, “New technology would generally replace the traditional means only if it provides something better than what the incumbent is providing and at much more efficient price levels. The fact of the matter is that even at the current, all time low data prices, the cost of watching Standard Definition TV for a month through streaming devices would turn out to be at least 3-5 times higher than the popular average monthly DTH subscription.”

Speaking on The Telecom Regulatory Authority of India’s (TRAI) Tariff Order, Goel, said, “The broadcasting community wanted forbearance on pricing which has been granted under the order. Distribution platforms have been allowed to charge for the network. The proposed Tariff Order, on seeing the light of the day, will ensure minimization of discriminatory pricing amongst distribution platforms thus ensuring a level playing field for all players.”

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