DEN narrows net loss in Q2, plans to launch OTT service soon

MUMBAI: DEN Networks narrowed its consolidated net loss in the fiscal second quarter while content cost saw a small rise. The multi-system operator (MSO) plans to launch OTT service soon.

The multi-system operator’s (MSO) consolidated net loss stood at Rs 47.9 crore (Rs 479 million) in the quarter ended 30 September 2016 compared to Rs 52.1 crore in the preceding quarter. The narrowing of the net loss was more sharp when compared to the year-ago loss of Rs 97.8 crore.

Total income from operations grew 1.3% quarter-on-quarter (QoQ) and by 26.7% from the year-ago period. In the quarter ended 30 September 2016, income stood at Rs 272.4 crore from Rs 268.9 crore in the preceding quarter and Rs 214.9 crore a year ago.

SN Sharma“There has been a significant improvement in the subscription income during the second quarter for the cable business of DEN at Rs 176 crore (inclusive of taxes). ARPU (including taxes) for DAS 1/ 2 and 3 markets stood at Rs 113, Rs 90 and Rs 51 per set-top box (STB) respectively. Phase 3 ARPU has grown almost 35% on a QoQ basis from Rs 38 per box in Q1 with collection efficiency at 95%,” said DEN Networks CEO SN Sharma.

As of November 2016, the ARPU has further improved to Rs 123, Rs 92 and Rs 58 per box for the three DAS areas respectively. This is in line with the guidance given by Den earlier. DEN has seen its highest ever collections in the month of November.

“The collection efficiency continues to be strong at 95% +. We are hopeful to achieve an ARPU of Rs 70 per box in DAS Phase III areas by January 2017,” said Sharma.

Content cost during the quarter was Rs 118.3 crore as opposed to Rs 112.5 crore in the trailing quarter. In the year-ago period, content cost was at Rs 128.1 crore.

EBIT loss from the cable TV segment stood at Rs 31.22 crore versus Rs 8.58 crore in the earlier quarter and Rs 54.9 crore in the preceding quarter.

Revenue from the cable TV segment stood at Rs 251.74 crore.

EBIT loss from broadband shrank to Rs 8 crore from Rs 14.3 crore a quarter ago. In the year-ago period, this was at Rs 23.2 crore.

Broadband revenue rose to Rs 20.7 crore from Rs 17.8 crore in the preceding quarter. A year ago, broadband revenue was at Rs 8.1 crore.

The consolidated results include the financials of direct and indirect subsidiaries.

DEN said the OTT application is under testing period and a formal launch would take place soon.

“DEN is planning to launch its OTT application soon. This is currently under test within the closed user group. The results and feedback so far has been very encouraging and this is a pioneer initiative in the MSO industry,” said Sharma.

Sharma is bullish on the future growth of MSOs. “Most of the High Court cases with respect to Phase III digitisation are behind us now. There is a draft tariff order from TRAI with respect to the broadcasters and MSOs. This goes very well for the industry and sets a positive future tone for the MSOs,” he said.

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