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Siti Networks Q2 EBITDA up 5%, STB seeding flat at 0.4 mn

MUMBAI: Essel Group-owned Siti Networks (earlier known as Siti Cable Network) has reported a 4.85% growth in its fiscal second quarter operating profit while its digital subscriber base has climbed to 8.7 million after adding 0.4 million set-top boxes (STBs) in the three months ended 30 September.

Carriage revenue saw a moderate quarter-on-quarter (QoQ) growth while activation revenue was up 4.64%.

The multi-system operator (MSO) narrowed its net loss for the quarter ended 30 September by 13.33% to Rs 37.7 crore (Rs 377 million) from Rs 43.5 crore in the trailing quarter. In the year-ago period, the net loss stood at Rs 26.6 crore.

EBITDA grew to Rs 49.7 crore from Rs 47.4 crore in the preceding quarter. In the corresponding quarter of the previous fiscal year, EBITDA was at Rs 48.3 crore.

The company’s Q2 revenue grew 2.48% to Rs 289 crore (Rs 2.89 billion) from Rs 282 crore a quarter ago. In Q2 of FY16, revenue stood at Rs 233.9 crore (up 20% YOY).

Expenditure remained flat at Rs 241.6 crore compared to Rs 239.5 crore in the preceding quarter. In the year-ago period, it was Rs 194.3 crore.

SITI Networks Limited Income Statement Quarter Ended Q2 FY17
Subscription revenue

Siti Cable’s subscription revenue (restated on net billing basis) jumped 7.12% to Rs 135.3 crore from Rs 126.3 crore in the prior quarter. It was Rs 101.5 crore in the same quarter of the previous fiscal.

The MSO shifted to net billing in Delhi and Mumbai from August 2016 onwards, as per provisions of model interconnection agreement (MIA).

SITI Networks Limited Revenue Streams Quarter Ended Q2 FY17
Carriage revenue

Carriage revenue saw a moderate growth to Rs 75.7 crore from Rs 72 crore. In the previous fiscal year, the carriage income was Rs 60.3 crore.

Activation revenue

Activation revenue was up 4.64% to Rs 38.3 crore in the current quarter compared to Rs 36.6 crore in the previous quarter. Activation revenue was Rs 19.1 crore in Q2 of FY16.

STBs seeded

The MSO seeded 400,000 STBs during the quarter, which is the same as the previous quarter. The company’s digital subscriber base jumped to 8.7 million from 8.3 million in the previous quarter. The company’s cable TV universe is 12.2 million, meaning that it has to seed 3.5 million STBs in Q3 to achieve total digitisation of its network.

The deadline for Phase IV of digital addressable system (DAS) ends on 31 December.

SITI Networks Limited Operational Metrics Quarter Ended Q2 FY17

HD services

Siti added 26,000 HD subscribers to take its total HD base to 91,000. In order to strengthen its HD base, the company has realigned its sales strategy and rolled out a bundled HD services offer for a limited period to upgrade its existing SD subscribers.

Broadband

Revenue from broadband rose 27.69% to Rs 24.9 crore from Rs 19.5 crore in the previous quarter and Rs 9.3 crore in the year-ago period.

The company’s broadband operations added 270,000 home passes in the quarter, taking the total footprint to 1.46 million homes. Broadband subscriber base grew to 195,000 till 30 September 2016, up 17% over the preceding quarter.

The current average speed on Siti’s DOCSIS network stands at 14.3 Mbps with average data consumption per subscriber at 59 GB a month.

vd-wadhwa03Commenting on the results, Siti Networks executive director & CEO VD Wadhwa said, “We continue to grow our digital subscriber base steadily with incremental improvements in monetisation seen in certain phases. This could have been significantly better but for the delay in digitisation because of pending court cases, which continues to impact monetisation in Phase III areas.

“Although the majority of the stay orders have been vacated by Delhi High Court, the closure of the balance pending cases will lead to complete switch-off of analogue signals, improve monetisation and significantly spur the growth of the industry. The expected implementation of the new draft tariff order will be a game changer and is more beneficial for the distribution platforms following execution. However, the success of the same will lie in its effective implementation.”

Siti Cares

During the quarter, the company launched Siti Cares initiative aimed to build a proactive service experience throughout customer lifecycle for both broadband and video customers.

Tie-up with BSNL

Siti Networks has collaborated with BSNL to distribute ZEEL’s over-the-top (OTT) service dittoTV. These services will be available across the entire BSNL mobile customer base as bundled data vouchers and VAS services.

Proprietary channels

The MSO also launched ‘My Siti’ proprietary local channels in Madhya Pradesh and Rajasthan, focused on providing hyper-local and community-relevant content to viewers.

Debt

The company’s consolidated gross debt stood at Rs 1,196 crore and net debt at Rs 1,089 crore.