How Siti Networks performed in Q2

MUMBAI: Multi system operator (MSO) Siti Networks has delivered mixed results for the quarter ended 30 September.

The MSO’s net loss has widened 246% to Rs 52.42 crore for the quarter ended 30 September compared to Rs 15.13 crore in the trailing quarter as expenses zoomed while revenue declined.

Subscription revenue jumped 20.8% Q-on-Q to Rs 205 crore from Rs 170 crore.

The increase in net loss can be attributed to 8.6% jump in expenses to Rs 401.4 crore as against Rs 369.6 crore in the trailing quarter. Carriage sharing, pay channel and related costs rose 7.4% to Rs 167.6 crore from Rs 156 crore.

Total income fell 4% to Rs 356.2 crore from Rs 371.1 crore. Carriage income fell 7.3% to Rs 71 crore compared to Rs 77 crore. Activation revenue dropped 48% to Rs 44 crore compared to Rs 85 crore.

EBITDA fell 33.64% to Rs 71 crore from Rs 107 crore. EBITDA excluding activation was 21% at Rs 27 crore.

Cable TV business

During the quarter, the cable TV and broadband service provider added 700,000 digital cable customers in West Bengal, Assam, Jharkhand, Gujarat, Andhra Pradesh and Telangana, primarily in DAS Phase 4 areas.

The company’s active digital cable subscriber has jumped to 11.1 million from 10.6 million. High definition (HD) subscriber base increased to 254,000 up from 220,000 in the trailing quarter.

The company noted that it prepaid migration is on track with 1.24 million subscribers being brought under its ambit by 30 September. Overall collection efficiency has improved at 93% in the first half of the fiscal.

The company said it is realigning operational expenses in the process to ensure more efficient utilisation and cost optimisation of resources to improve recurring cash flows.

Broadband business

The company’s broadband revenue saw a marginal 1.2% fall to Rs 25 crore from Rs 26 crore. Broadband subscriber base has declined to 238,000 from 240,000. Broadband homes passed remained unchanged at 1.62 million.

The company said that 55-60% of acquisitions are now coming on longer duration plans. Currently, 25% of DOCSIS base has been transitioned to advanced rental plans to improve customer stickiness. The company launched DOCSIS technology in Nagpur on 1 November with 72,000 home passes.

DOCSIS ARPU stands at Rs 613 whereas new acquisition ARPU is at Rs 718; Ethernet-over-Coax (EoC) ARPU is at Rs 440.

Siti’s consolidated gross debt stands at Rs 1,395 crore and net debt at Rs 1,276 crore.

While commenting on the results, Siti Networks chief business transformation officer Rajesh Sethi said, “Siti displayed strong growth in Video as Q2 subscription income jumped 21% QoQ and 52% YoY with overall collection efficiency improving to 93% for H1FY18. We continue to improve monetization levels and leverage our customer base in Phase 3&4 territories.

“An emphasis on cost optimization and instilling a lean culture is expected to drive efficiencies across the board and further aid the bottom line. At the same time, an organizational restructuring is underway to evolve SITI into a more nimble and effective organization. The above levers were demonstrated in the strong 21% QoQ increase in Q2 Operating EBITDA to Rs 27 crore in broadband, focus on further enhancement of service levels to retain customers and new geographies expansion is expected to drive growth along with overall improvement in the pricing environment.”