(23 July 2009 6:15 pm)

MUMBAI: A hit in revenues and investment towards Headend-In-The-Sky (HITS) has pulled down the first-quarter profitability of Wire and Wireless (India) Limited.

The Subhash Chandra-promoted cable TV distribution company has posted a consolidated net loss of Rs 477.69 million for the quarter ended 30 June, as against Rs 183.15 million a year ago.

Operating revenue for the quarter fell by 12 per cent to Rs 630.06 million (from Rs 716.26 million). "The company made several corrections in this period," says a source.

WWIL is betting big on HITS for future turn around of the business. Though the company has commercially launched the services from 1 April, the bulk of pay-TV broadcasters have stayed away from making commercial agreements with it.

Says WWIL chairman Chandra, "We believe that our ability to handle large cable network, digital cable services, successful launch of HITS and other value-added services would provide a compelling value proposition for our viewers."

WWIL's analogue cable business is cash positive and it is keen to build up other value-added services for future revenues. Says WWIL CEO Sudhir Agarwal, "We believe that non cable and satellite homes will bring in an important chunk for future growth. In addition to HITS, we would also offer digital cable and analogue cable services, ISP and other value-added services in the country."

Expenses in the quarter stood at Rs 918.48 million, up 15.82 per cent, as compared to Rs 793.04 million a year ago.

On standalone basis, WWIL's net loss for the quarter stood at Rs 464.72 million (as against Rs 197.40 million). Revenue fell to Rs 471.78 million (from Rs 551.30 million), while expenses rose to Rs 753.58 million as compared to Rs 641.14 million in the earlier year.

WWIL promoters pledged 36.35 million shares, or 16.7 per cent stake, according to information provided by the company till 30 June 2009.

Cash-strappped, WWIL is planning to raise Rs 4.5 billion via rights issue to fund its expansion plans. The company has already raised Rs 1.92 billion of debt through issue of secured redeemable non-convertible debentures.

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