Dish TV adds 301K subscribers in Q1 FY19; subscription revenues up 8.1%

Dish TV India Ltd reported consolidated subscription revenues of Rs 14,893 million and operating revenues of Rs 16,556 million for the first quarter of fiscal 2019, up 8.1 per cent and 8.0 per cent QoQ, respectively. EBITDA for the quarter stood at Rs 5,568 million. EBITDA margin increased to 33.6 per cent. Profit After Tax (PAT) was reported at Rs 255 million. 

On March 22, 2018, Videocon d2h Ltd had merged with and into Dish TV India with the appointed date of the merger being October 1, 2017. Financial numbers for Q1 FY19 are thus not comparable with the corresponding period last year (Q1 FY18). 

A Turnaround Quarter 

Subscriber additions picked up speed during the first quarter. The net number of 301,000 additions were positively impacted by a sports heavy programming calendar. Ramadaan, on the other hand, moderated the additions in line with past trends. Phase 4 of Digitisation continued to dominate subscriber activations. The sheer number of households pending conversion in Phase 4 indicates sufficient growth potential for the industry going forward. 

44 per cent of all subscriber additions were of High Definition. In total, HD subscribers form a promising 17 per cent of the total net base of the company. 

Subscription revenues for the quarter increased 8.1 per cent QoQ to Rs 14,893 million. 

Incrementally higher HD viewership, lower discounts at package levels and a price hike across a majority of recharge packages brought about this increase in subscription revenues during the quarter. 

ARPU for the quarter leaped to Rs 214 from Rs 201 in the previous quarter. 

Commenting on the results, Jawahar Goel, CMD, Dish TV India, said, “Price hikes initiated during the quarter were a result of some pricing power gathered over the months. It is a positive sign and should stand us in good stead in the year ahead. The first quarter often sets the pace for the full year. Our performance in the first quarter gives us the confidence to deliver in line with our expectations going forward.” 

Synergies at Play 

With integration across functions getting almost complete, initial cost synergies materialised during the quarter. 

Backend, IT and infrastructure synergies were the key contributors to a 38.9 per cent growth in EBITDA sequentially. The overall EBITDA margin jumped to 33.6 per cent from 26.1 per cent in the previous quarter. 

“We remain positive on achieving the Rs 5.1 billion synergies that we have envisaged from the merger for the current fiscal. Part of the estimated synergies are going to be due to a more rational programming cost. Our interactions with our broadcasting partners so far reinforce our belief in the strength of the new Dish TV platform,” said Goel. 

The TRAI Tariff Order 

With the TRAI Tariff Order coming into force on July 3, 2018, the industry has a 180-day window to ensure its implementation on the ground unless it is challenged by any of the stakeholders. 

Dish TV India sees the regulation to have the potential to minimise discriminatory pricing by ensuring a level playing field between cable and DTH platforms. 

According to Jawahar, “If implemented in letter and spirit, the Tariff Order should be beneficial for the entire industry. Though a lot of work may have to be done by individual stakeholders initially, the benefits shall accrue by way of a higher ARPU for the industry going forward.” 

Dish TV was the first in the industry to partially and voluntarily roll out the provisions of the Tariff Order by offering a-la-carte channels to its subscribers at affordable prices. A total of 2.4 million subscribers on Dish TV’s platform have so far opted for such paid a-la-carte offerings thus resulting in incremental revenues for the company. 

Macro Outlook and the Year Ahead 

The IMD’s forecast of a normal monsoon augurs well for the economy at large and is likely to give an impetus to rural demand. Higher government spending on welfare schemes and development programmes in the run-up to the elections will trickle down to the end consumer. There are clear signs of robust consumer demand continuing and fortifying the Indian consumption story. 

Anil Dua, Group CEO, Dish TV India, remarked, “We have started a new innings and this year is going to be the year of change at Dish TV. Change for the good. Whether it is our systems and processes or our approach to sales, service and marketing or for that matter our customer and vendor relationships or our products, everything is going to be viewed through the lens of excellence and efficacy. We believe that we are well placed for superior growth and profitability and that macroeconomic tailwinds will create conditions that will further favour the consumption of pay-TV entertainment of which Dish TV will be a natural beneficiary.”