SITI Networks’ FY2019 operating EBITDA grows by 2x to Rs 3,001 mn
SITI Networks Limited, an Essel Group company, with presence across 580+ locations in India and having a diverse portfolio of assets in media, packaging, entertainment, technology-enabled services, infrastructure development and education, has reported a 13 per cent growth in its total revenues, excluding activation, to Rs 14,186 million for the financial year ended March 31, 2019.
On the back of sustained efforts in FY2019, SITI reported growth in its Operating EBITDA by 2x to Rs 3,001 million. Leveraging existing operating resources and focus on cost effectiveness reflected in the operating expenses being flat on an annualised basis and declining on a quarterly basis. This manifested itself in Operating EBITDA Margin expanding significantly by 912bps in FY2019 to 21.2 per cent.
Subscription revenue increased by 19 per cent to Rs 9,537 million in FY2019, aided by improving monetisation and upselling better value offerings to its customers.
While commenting on the results, Rajesh Sethi of SITI Networks, said, “SITI Networks maintained its consistent growth and grew its subscription revenue by 19 per cent YoY in consonance with tariff order implementation. A twin focus on cost effectiveness and improved monetisation helped us to deliver strong Operating EBITDA at Rs 3,001 million, a growth of 2x and simultaneously expanding margins 1.8x to 21.2 per cent.”
In the fourth quarter ended March 31, 2019, SITI ended with an Active Subscriber base at ~8.2 million. There was transient churn in the customer base because of tariff order migration and prepaid implementation. The subscriber base is expected to revert to steady state levels in the medium term. SITI was intensely focussed on a calibrated migration to the new TRAI Tariff Order Regime and successfully implemented the same in conjunction with its business associates on a pan India basis. The migration process entailed preparing and disseminating tailored “best fit” plans, offering broadcaster bouquets and a-la-carte options to its end customers, ensuring the systems and processes were effective and the operating teams worked in a synchronised manner.
SITI made extensive use of digital mediums and its on-ground business associates to ensure customers were informed and empowered. Currently, a substantial number of its customers have constructed their own bespoke plans with the remainder being on SITI “best fit” plans; SITI is working closely with the regulatory authorities and industry peers to monitor the situation.
On implementation of the tariff order, Rajesh Sethi said, “Our unrelenting focus on systems and processes has enabled us to migrate our entire base to the new Tariff Order regime. We successfully managed to tide over this transition phase with the active support of our local business associates. This migration paves the way for strong and sustainable cash flows in the medium to long term as the sector outlook improves and the business model matures further. We are looking to shift our focus to product innovation with the aim of offering our customers an eclectic mix of entertainment options.”