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DEN Networks’ drive to increase cable TV ARPU

MUMBAI: DEN Networks expects its cable TV ARPU from Phase IV areas to touch Rs 75 per set-top box (STB) ten months after the implementation of digital addressable system (DAS).

The government has mandated 31 March 2017 as the new cut-off date for DAS Phase IV. Analogue signals will be switched off in Phase IV areas, implying that the whole country would have transitioned to digital cable TV transmission.

DEN is expecting to lift the ARPU (average revenue per user) from other areas as well. In DAS Phase III, DEN is targeting ARPU to climb to Rs 75 (inclusive tax) within five months. The new cut-off date for digitisation in Phase IV was 31 January 2017.

In DAS Phase II, DEN feels there is headroom for ARPU to increase to Rs 105–110. There will be marginal upside in Phase I collections as well.

The multi-system operator (MSO) exited the fiscal third quarter with ARPU of Rs 125 in Phase I (up 11% QoQ), Rs 95 in Phase II (up 6%) and Rs 64 in Phase III (up 23%).

DEN’s digital subscriber base stood at 10.2 million until 31 December 2016. Out of this, 8.2 million are active paying subscribers. While in Phases I and II the MSO has 3.7 million active subscribers, in Phase III it is 3.9 million and in Phase IV about half a million.

DEN plans to expand its broadband service to 20 new cities within nine months. The broadband ARPU stood at Rs 752, as of 31 December 2016.

In the fiscal third quarter ended 31 December 2016, DEN Networks continued to improve its net realisation from cable TV subscription billing, operating profit from cable TV saw strong growth and broadband business achieved break-even for the full quarter.

Led by growth in subscription income, DAS Phase I achieved an EBITDA of 30%. In case of Phase II, the MSO achieved EBITDA of around 20%. “This sets the future roadmap for DAS Phase III EBITDA. The company is gearing up for DAS Phase IV and there will be additional focus on deployment of HD boxes and technology upgradation,” DEN Networks CEO SN Sharma had said while commenting on the fiscal third quarter results.