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Dish TV plans capex of Rs 550 cr, eyes 1.5 mn subs in FY15
MUMBAI: Dish TV, India’s leading direct-to-home (DTH) service provider, is planning to spend Rs 550 crore (Rs 5.50 billion) in capital expenditure in the current financial year.
The company has already invested Rs 140 crore (Rs 1.4 billion) in the fiscal first quarter ending 30 June 2014.
“Our capex plan this fiscal is Rs 5.5 billion. We have consumed Rs 1.4 billion in the first quarter,” Dish TV chief executive officer RC Venkateish told TelevisionPost.com.
Lifted by the overall sentiment in the market, Dish TV is ready to push the paddle on adding new subscribers in the year.
Dish TV is eyeing 1.2-1.5 million new subscribers at the net level this fiscal. Already 330,000 net subscribers have been mopped up in the quarter ending 30 June, bettering the year-ago’s subscriber addition of 200,000. The soccer World Cup helped the DTH operator in getting fresh demand from select states such as West Bengal and the North East.
“The first quarter has been good in terms of subscriber addition. Our net subscriber base is at 11.7 now. In the whole fiscal, we are expecting to add 1.2–1.5 million net and 2–2.5 million gross subscribers,” Venkateish said.
In fiscal 2013–14, subscriber growth was somewhat muted as the company had taken a conscious call of going after quality customers. It had stopped giving out subsidised boxes, which resulted in net additions of 810,000 in the full fiscal. Compare this to FY13 when it added 830,000 net subscribers in just one quarter (Q3) while for the fiscal it ended at 1.8 million.
Venkateish is hopeful that with a positive momentum in the economy, the company will beat the industry growth rate in the fiscal.
While Dish TV’s average revenue per user (ARPU) from the first quarter remained flat sequentially at Rs 170, the CEO said that FY15 ARPU will see 6–7 per cent increase over the previous fiscal.
Starting June this year, the company had hiked the prices of its middle- and top-level packs by 5–7 per cent. Starting 1 August, it will increase the subscription fee by 5-6 per cent across the board, including the price of its base pack. “We will increase the base pack price to bring it at industry standard of Rs 230 from 1 August. We will also increase price across packs,” Venkateish said.
While in the first quarter content costs remained flat, the company expects them to be under single digit sequentially.
“We are very happy that we have kept content costs flat. Going ahead, for the fiscal also, it will see lower single-digit growth,” Venkateish said.
Dish TV is in the process of concluding its content deals with Star and Zee channels, which are ending on 31 July. The IndiaCast channels are on RIO basis.
“We are in advanced talks with both Star and Zee for distribution of the channels,” he said.
In FY14, Dish TV’s content cost was at Rs 261.38 crore (Rs 2.61 billion).
Zing and strategy for Phases III and IV
Dish TV expects the DTH operators to seed 40 million set-top boxes (STBs) out of the estimated 60 million that will be required in Phase III and IV towns of digital addressable system (DAS). Zing will play a big role in penetrating deeper into these towns.
Venkateish said that Dish TV’s sub-brand Zing has been accepted really well in Phase III and IV cities of DAS. “It is a product specially made for that audience which has more affinity for the vernacular. Unlike national product where you have regional add-ons, this gives regional in a base pack. We have already launched it across Odisha, West Bengal, Tripura, parts of Assam, and most parts of Maharashtra,” he said.
In fact, the company said that Zing has propelled the sales of the main brand through a wider reach and top-of-the-mind recall. The company is optimistic about its strategy to capture leading share in these markets.