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Dish TV has capex plan of Rs 800 cr in FY18

MUMBAI: Dish TV has a capital expenditure plan of Rs 800 crore in the current financial year even as the DTH operator is looking to add one million net subscribers during this period.

Dish TV has already consumed capex of Rs 180 crore in the fiscal first quarter ended 30 June. The company thus has a capex plan of Rs 620 crore in the remaining nine months of the year.

Revenue is expected to grow between 7% and 8% in FY18. This will be due to subscriber additions while average revenue per user (ARPU) will stay flat.

Dish TV has guided to a flattening of ARPU in the fiscal due to pressure from competitors to introduce lower packs. Recovering from demonetisation, ARPU grew 10.4% quarter-on-quarter (QoQ) and was recorded at Rs 148 for the quarter ended 30 June 2017. In the fourth quarter of FY17, ARPU was at a new low of Rs 134.

EBITDA margin should be in the range of 29%-31% for the full fiscal. Though Dish TV reported EBITDA margin of 27% in the quarter ended 30 June, this is set to improve from the third quarter of the fiscal because of the benefit from Goods and Services Tax (GST).

Dish TV expects its content cost to stay flat in the fiscal. In the quarter ended June, the company’s content cost was in the region of Rs 230-240 crore.

Dish TV has started renegotiating with broadcasters to keep content costs in check. The argument put forward is that broadcasters are offering free to air (FTA) content on Freedish and also on OTT platforms. The DTH operator has, in fact, managed to reduce content costs with one major broadcaster recently. Content deals with some of the major broadcast networks like Star India are coming up for renewals.

Dish TV has an inventory of 900,000 set-top boxes (STBs). The plan is to reduce the inventory level by halve to 450,000.

Subscriber acquisition cost, which was at Rs 1,800, is expected to fall by Rs 200 in the year.

As of 30 June 2017, Dish TV has a net subscriber base of 15.7 million.

Dish TV expects the approximate net synergies from the Videocon d2h merger to be Rs 180 crore in FY18 and Rs 510 crore in FY19. The combination of Dish TV and Videocon d2h would create one of the world’s largest DTH platform.