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Siti Cable crosses 5 mn digital subs, FY15 EBITDA jumps 33.8%

MUMBAI: Siti Cable has crossed the 5 million digital subscriber mark. The multi-system operator (MSO) added 1.38 million digital subscribers in the fiscal ended 31 March 2015, taking its total digital base to 5.38 million.

Siti Cable converted 0.53 million analogue subscribers into digital in the fourth quarter alone. Its total cable TV universe is 10.5 million.

Meanwhile, Siticable’s operating profit in the fiscal saw a 33.8 per cent increase to Rs 168.4 crore (Rs 1.68 billion) compared to Rs 125.9 crore (Rs 1.26 billion) a year ago.

Siti subs addn FY15

Total income from operations witnessed a 30 per cent increase to Rs 905.9 crore (Rs 9.06 billion), from Rs 697.2 crore (Rs 6.97 billion) in the earlier year.

Subscription income stood at Rs 531 crore (Rs 5.31 billion), up 56.5 per cent from the year-ago period. Broadband revenue at Rs 27 crore (Rs 270 million) was up 53.3 per cent.
Revenue from cable grew 31.4 per cent to Rs 910.4 crore (Rs 9.10 billion) in FY15, from Rs 693 crore (Rs 6.93 billion) in the prior fiscal.

However, a 35 per cent increase in expenses resulted in widening the net loss of the company to Rs 109.1 crore (Rs 1.09 billion), as against Rs 83.3 crore (Rs 833 million) a year ago.

Siti Cable FY15
A major increase in expenses was incurred on carriage sharing, pay channel and related costs, which jumped 53 per cent to Rs 510.8 crore (Rs 5.1 billion).

siti content cost FY15
Expenses for employee benefit also shot up by 35.6 per cent.

Siti Cable executive director and CEO VD Wadhwa said, “Our focus on monetisation of existing business in Phase I and II cities in FY15 led to a strong subscription revenue growth of 57 per cent YoY and operating EBITDA margin expansion by 491 bps. Siti Cable is engaged in proactive seeding and well placed to benefit from the ongoing digitisation process.”

Siti segmentDuring the fiscal, outstanding business advances amounting to Rs 87.17 crore (Rs 871.7 million) were given to two subsidiaries (including a wholly owned subsidiary) for acquisition of MSOs or direct points, technological up gradation, etc. in the near future.

Siti Cable added that the said amount was good and recoverable, as the company had received indemnity against the aforementioned balances from majority stakeholders.

It also said that in view of the mandatory digital addressable system (DAS) regulation, owing to the initial delays in implementation of DAS in Phase I cities, and challenges faced by all the MSOs during transition from analogue to DAS, the company is in the process of implementation of revenue sharing contracts entered into with the local cable operators (LCOs).

Accordingly, the company invoiced and recognised subscription revenue under the new DAS regime amounting to Rs 66.62 crore (Rs 666.2 million). This was based on certain estimates derived from market trends and ongoing discussion with the LCOs. According to the management, the execution/implementation of such contracts will not have a significant impact on the subscription revenue.

Quarterly performance

Siti Cable saw a dip in its operating profit in the fourth quarter of the fiscal.

siti operational metrics

The EBITDA, which had been on the rise since the beginning of the fiscal, saw a 35.9 per cent dip in Q4, compared to Q3.

While total revenue witnessed a 24.8 per cent growth sequentially, expenses also jumped 24.2 per cent, pulling down EBITDA.

Subsequently, the company’s net loss also widened in the exit quarter of the fiscal to Rs 34.1 crore (Rs 341 million).

Siti Cable FY15 QoQBroadband business

As of 31 March, Siti Cable had 70,100 broadband subscribers. Siti Cable’s revenue from broadband business in the fiscal saw a 53.3 per cent increase to Rs 26.5 crore (Rs 265 million), compared to Rs 17.3 crore (Rs 173 million) in FY14.

“We are looking to expand our broadband presence on DOCSIS technology in our endeavour to diversify our revenue stream and provide the consumer with a compelling experience,” Wadhwa said.

Key developments in the fiscal

QIP

During the fiscal, Siti Cable raised Rs 221.1 crore (Rs 2.21 billion) through qualified institutional placement (QIP).

The company allotted 63,174,540 shares to a group of qualified institutional bodies (QIBs) including HDFC Mutual Fund, Reliance Mutual Fund, First International Group, UBS and others.

Promoter holding fell from 72.8 per cent to 66 per cent in the fiscal.

New geography expansion

Siti Cable expanded its footprint by entering into new markets in Andhra Pradesh and Haryana as part of the ongoing voluntary digitisation process in order to comply with the DAS Phase III digitisation deadline.

In the second quarter of the fiscal, the MSO had initiated acquisition of direct points from the LCOs, initially in the national capital region (NCR). By the end of the third quarter, its direct point subscriber base was approximately 40,000.

Moreover, in Q2 it launched high-speed internet services using Docsis 3.0 technology on its cable network in Delhi/NCR, offering internet speeds ranging from 5 Mbps to 100 Mbps with a data plan policy up to 100 GB.

During Q3, Siti Cable also upgraded its existing digital head-end at Bengaluru to Ericsson and Harmonic.