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Hathway’s carriage revenue up 8%, EBITDA increases to Rs 32.7 cr in Q1

MUMBAI: Multi-system operator (MSO) Hathway Cable & Datacom has reported an 8 per cent increase in carriage revenue while its operating revenues have seen a dip on a quarter-on-quarter (QoQ) basis in the quarter ended 30 June 2015.

Standalone operating profit (EBITDA) has increased by 5 per cent to Rs 32.7 crore (Rs 327 million) over the trailing quarter.

Hathway’s cable TV universe stands at 11.8 million, out of which it has digitised 8.6 million subscribers.

During the first quarter, the MSO deployed 100,000 set-top boxes (STBs). Its inventory stood at 0.5 million STBs.

Carriage revenue at Rs 83.8 crore in Q1

Hathway’s carriage (placement fees) revenue stood at Rs 83.8 crore (Rs 838 million) in the first quarter of the fiscal, accounting to 31.69 per cent of the MSO’s total revenue. In the trailing quarter, Hathway’s carriage revenue was at Rs 77.5 crore (Rs 775 million).

However, total revenue was down 2 per cent on a QoQ basis to Rs 264.4 crore (Rs 2.64 billion), compared to Rs 270.5 crore (Rs 2.70 billion) in the exit quarter of FY15.

Collection from activation charges was down to Rs 5.5 crore (Rs 55 million), from Rs 5.7 crore (Rs 57 million) in the previous quarter. Subscription revenue (net of adjustment) stood at Rs 105.5 crore (Rs 1.05 billion), down 13 per cent from Rs 120.9 crore (Rs 1.21 billion) QoQ.

The company said that subscription revenue (net of adjustment) for Q4 would be Rs 105 crore (Rs 1.05 billion) as the adjustments (including entertainment tax, commission, feed income accrued for FY15) accounted in Q4. For feed income, there was an equivalent impact on Q4 content costs, the company said.

EBITDA at Rs 32.7 crore

For the quarter under review, Hathway’s standalone EBITDA was at Rs 32.7 crore (Rs 327 million), as against Rs 31.2 crore (Rs 312 million) in the fourth quarter of the previous fiscal.

The company said that EBITDA, net of activation fees, was at Rs 27.3 crore (Rs 273 million), compared to Rs 25.4 crore (Rs 254 million) in Q4 FY15.

Hathway also said that as per management estimates, quarterly EBITDA inclusive of its several subsidiaries/JVs/associate companies, would aggregate to about Rs 41 crore (Rs 410 million).

Hathway’s net loss was at Rs 43.91 crore (Rs 439.1 million) from Rs 76.99 crore (Rs 769.9 million) in the trailing quarter.

Pay channel cost down

The MSO’s pay channel cost remained at Rs 93.32 crore (Rs 933.2 million), down from 107.34 crore (Rs 1.07 billion) in the trailing quarter.

Employee cost and other expenses were marginally up.

Total expenses stood at Rs 231.68 crore (Rs 2.32 billion), compared to Rs 239.05 crore (Rs 2.39 billion) in Q4FY15.

Hathway Q1 FY16
Hathway said it has been aggressively promoting prepaid billing structure for all its primary subscribers. “The company expects this rollout to be completed over the next quarter so as to cover 100 per cent of its primary subscriber base. This prepaid structure will enable the company to substantially improve its ARPU from this subscriber base. It is expected that once primary subscribers are completed, a prepaid billing structure will be rolled out for secondary subscribers also. This action by the company will have a substantially positive impact over the next few quarters on its CATV ARPU,” Hathway said.

Consequently, ARPU increased to Rs 100 (net of tax) in Phase I markets and Rs 76 in Phase II markets.

Subscriber growth

Hathway added 100,000 subscribers in the first quarter, out of which 10,000 were HD boxes.

As of 30 June, Hathway’s total cable TV universe stood at 11.80 million subscribers, while its pay cable subscribers remained at 6.60 million.

The home broadband passed 2.4 million subscribers and broadband subscribers stood at 0.46 million.

Broadband business

At the end of the first quarter, Hathway has 170,000 Docsis 3.0 subscribers out of a total base of 460,000. Gross additions were at 50,000.

ARPU during the quarter has seen a sharp jump from Rs 530 in the previous quarter to Rs 577 in the current quarter, the company said.

The company said that broadband business continued its momentum of upgrading LAN/ Docsis 2.0 consumers to Docsis 3.0 and that incremental consumer ARPU had reached Rs 850.

“With Sania Mirza as brand ambassador, Hathway hopes to reinforce the attributes of the new ultra-high-speed technology, as she is known for speed, agility and as an icon who appeals most to new-age India,” the company said.

Meanwhile, it added that capex for network upgrade has been rolled out across all Docsis 3.0 towns to ensure network is ready for consistent 50 Mbps speed even with increased consumer base.

Hathway’s broadband revenue in the fiscal first quarter stood at Rs 65.1 crore (Rs 651 million), up 13 per cent from Rs 57.7 crore (Rs 577 million) in the trailing quarter.

Hathway’s standalone net debt as on 30 June 2015 stood at Rs 1041.4 crore (Rs 10.41 billion), while gross debt was at Rs 1137.3 crore (Rs 11.37 billion).