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Airtel Digital TV Q2 subs addition slows amid higher ARPU

MUMBAI: Higher ARPU (average revenue per user) but slower subscriber growth. That has been the story of Airtel Digital TV in the fiscal second quarter while operating profit has grown 6.4 per cent over the trailing quarter.

The direct-to-home (DTH) arm of telecom major Bharti Airtel added 151,000 net subscribers in the quarter ended 30 September 2014, taking its total base to 9.54 million. In the previous quarter, the company had added 376,000 subscribers.

Dish TV, on the other hand, mopped up 378,000 subscribers in the fiscal second quarter.

Airtel Digital TV’s EBITDA rose to Rs 152.9 crore (Rs 1.53 billion), from 143.7 crore (Rs 1.44 billion) in the trailing quarter. In the year-ago period, EBITDA stood at Rs 64.6 crore (Rs 646 million).

The EBIDTA margin improved slightly to 24.4 per cent in the quarter, compared to a margin of 24.3 per cent in the preceding quarter. In year-ago period, the EBITDA margin was 12.7 per cent.

Revenue saw a 5.88 per cent sequential growth. The company’s total revenue was at Rs 626.3 crore (Rs 6.26 billion), compared to Rs 591.5 crore (Rs 5.91 billion) in the trailing quarter. In the year-ago period, it had made revenue of Rs 507.2 crore (Rs 5.07 billion).

Revenues from digital TV services accounted for 4 per cent of Bharti Airtel’s total revenue, while EBITDA contribution stood at 3 per cent.

Airtel Digital TV’s ARPU climbed to Rs 220 in the quarter ended 30 September. Its last highest ARPU was Rs 214 achieved during the first quarter of the fiscal. In the year-ago period, its ARPU stood at Rs 198.

The company’s churn jumped from 0.6 per cent per month in the previous quarter to 1.1 per cent per month in Q2FY15. In the year-ago period, monthly churn was at 1 per cent.

During the quarter, the company incurred a capital expenditure of Rs 225.5 crore (Rs 2.25 billion). Cash burn during the quarter was at Rs 72.6 crore (Rs 726 million) primarily on account of seasonal build-up of boxes.

As of 30 September 2014, the company’s cumulative investments in the DTH business touched Rs 5,135.6 crore (Rs 51.36 billion).

During the quarter, the company collaborated with Samsung to exclusively launch India’s first integrated TV with built-in HD set-top box (STB) which enables customers to put an Airtel CAM card in the TV to enjoy Airtel digital TV services.

The company also introduced multiple HD channel packs for HD subscribers, providing greater flexibility to consumers. With the launch of 15 regional channels, it added 24 channels (22 SD, 2 HD) with increased focus on regional markets.

Airtel Digital TV offers a total of 430 channels including 22 HD channels and four interactive services across 639 districts in India.