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Hathway’s broadband rev stays ahead of cable TV subs income for 2nd straight quarter; 0.4 mn STBS seeded in Q3

MUMBAI: For the second quarter in a row, Hathway Cable & Datacom’s broadband revenue has stayed ahead of its cable TV subscription income.

Broadband revenue for the quarter ended 31 December 2016 was Rs 127.8 crore. In comparison, cable TV subscription revenue stood at Rs 114.1 crore.

Broadband subscription revenue also grew faster, reporting a 6% rise quarter-on-quarter (QoQ) and a 62% jump year-on-year (YoY).

Cable TV subscription revenue, on the other hand, grew 3% QoQ and 17% YoY. This has resulted in the gap between broadband and cable TV subscription revenues marginally widening. While in the second quarter the gap was Rs 9.9 crore, in the third quarter the distance between the two was Rs 13.7 crore.

TelevisionPost.com had spotted this trend in the earlier quarter.

With the court cases delaying the implementation of digital addressable system (DAS) in Phase III, the drive to increase cable TV subscription revenue in these areas had received a setback. Now with the Ministry of Information and Broadcasting (MIB) specifying that 31 January was the last switch-off date for analogue cable in DAS Phase III areas, collections from the ground could speed up. Hathway has also been making efforts to increase its average revenue per user(ARPU) from Phases I and II as well.

STB deployment

For the quarter ended 31 December 2016, Hathway Cable & Datacom deployed 0.4 million set-top boxes (STBs) at the consolidated level in Phases III and IV. The total DAS Phase III subscriber base stood at 6 million.

With this, Hathway’s total deployment of STBs stood at 12.2 million. The multi-system operator (MSO) has now digitised 92% of its cable TV universe.

The company seeded 0.2 million STBs at the standalone level in the fiscal third quarter ended 31 December 2016.

Q3 EBITDA

Hathway Cable & Datacom’s Q3 net loss has widened 10% to Rs 44.4 crore compared to Rs 40.4 crore in the previous quarter ended 30 September. In the year-ago quarter, net loss was Rs 41.2 crore.

EBITDA jumped 21% to Rs 66.6 crore compared to Rs 54.9 crore a quarter ago. EBITDA margin stood at 20% compared to 17%.

“Focus on cost efficiencies through structural changes has helped EBIDTA growth higher
than revenue growth,” the company said.

hathway-Q3-fy17-FINANCIAL-HIGHLIGHTS-AS-PER-IND-AS-Expenditure3

Placement revenue

Placement revenue jumped 8% QoQ to Rs 70.4 crore from Rs 65.4 crore. Activation revenue was up 4% to Rs 21 crore compared to Rs 20.2 crore in the preceding quarter.

Total income rose 5% to Rs 337.6 crore compared to Rs 321.1 crore.

Pay channel cost

Pay channel cost remained flat at Rs 104.3 crore compared to Rs 103.4 crore in the previous quarter. In the year-ago period, pay channel cost was Rs 94.5 crore.

Employee cost fell Rs 23.3 crore, down 1% QoQ and up 19% YoY.

Expenses increased 2% to Rs 272.5 crore from Rs 267.7 crore. Service charge saw the sharpest growth at 9% to Rs 40.6 crore.

 

 

 

 

Cable TV segment

Hathway’s standalone ARPU (excluding taxes) for Phases I, II and III stood at Rs 105, Rs 95 and Rs 45 respectively. The Phase II and III ARPU grew 6% and 50% respectively over the previous quarter.

The company has rolled out Hathway Connect initiative in 60% DAS I & II markets on a standalone basis. The rollout in DAS III markets commenced during the quarter. The complete migration is expected in Q4.

The company will launch value-added services (VAS) on 9 February with 17 services across various genres—movies, comedy, educational, devotional, and music. There is a self-service app for Hathway customers to activate services instantly, which the company claims is an industry-first initiative.

The company will also come out with a rate card for carriage and placement so as to ensure transparency in the negotiations with broadcasters.

Broadband segment

The company’s homes-passed figure reached 4.1 million on standalone basis. It added 40,000 subscribers to take standalone broadband figure to 0.6 million. Standalone broadband ARPU remained flat at Rs 740 during the quarter.

Consolidated broadband ARPU increased to Rs 654 from Rs 643 in the previous quarter. Total subscribers jumped to 0.86 million from 0.82 million.

According to Hathway, the network is ready for 50% increase in speed and 200% increase in data capacity after completion of technical infrastructure upgradation project.

Based on encouraging response of GPON fibre to home rollout in Bangalore, Kolkata and Delhi, GPON has been launched in Chennai. One lakh GPON home pass have been launched in Chennai on 1 February, and by March 2017, four lakh GPON homes passed to be completed in Chennai.

The GPON network is being designed to have capacity for offering 1 Gbps speed to end. Currently, GPON consumers are offered 50 Mbps/100 Mbps/150 Mbps packages.

Upgrade to Docsis 3.1 technology is in progress to further enhance customer experience. Docsis 3.1 is the latest global technology for offering high-speed broadband over cable.

Oracle BRM and CISCO QPS (Policy Manager) integration has been completed both for Docsis and GPON, helping the company deliver enhanced service experience. Up to 100 % increase in data limits across cities, this is to encourage customers to get more out of their home broadband.

Debt status

Hathway’s standalone gross debt stood at Rs 1721.1 crore as of 31 December. Net debt was 1691.4 crore.

Hathway Debt Status

Meanwhile, Hathway’s board has approved transfer of its cable TV business to the wholly owned subsidiary Hathway Datacom Central by way of slump sale. The parent company will hold the broadband business.

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