Dish TV cuts losses…

Rose Major

Despite the millions of rupees being spent on subscriber acquisition in the midst of a competitive dogfight, there are signs that India’s DTH sector is moving towards the end of its intense investment period. Essel-backed Dish TV saw its first-quarter net loss reduce by 44% as revenues rose 53% to Rs2.52 billion (US$52 million).

Net loss fell from Rs1.25 billion in the year-ago quarter to end-June to Rs692 million in the same quarter this year.

Dish TV is forecasting it will break even in its fiancial year ending March 2011, even though it is now signing up lower-quality subscribers. Average revenue per subscriber (ARPU) is now down to Rs142, compared with Rs164 a year ago. But the take isn’t receding at quite the pace it was, having only dropped from Rs144 last quarter.

Dish is also blaming the fall in ARPU on the economic climate, as subscribers “trade down” their packages. The company is forecasting – perhaps optimistically – that ARPU for the full year (to end-March 2010) will be at Rs160.

But while the forecast may be optimistic, the subscriber base continues to grow at something of a phenomenal pace, with the company adding 440,000 subs in the month to reach just over 5.5 million. Dish TV is forecasting 7.5 million subs by the end of the financial year.

And the platform is managing to keep expenses growth in check, despite the race for subscribers, with subscriber acquisition cost now at Rs2487. Total expenses for the quarter were Rs3.01 billion, up from Rs2.76 billion a year ago.

Dish TV chairman Subhash Chandra, "Despite a weaker economic climate, the DTH segment continued to grow at a strong pace. Our revenues grew exponentially and we achieved positive EBITDA for second successive quarter. These results are a direct outcome of our business strategy that is tuned to the needs of our customers."