Dish TV to focus on acquiring quality customers despite tepid subs growth in Q2
MUMBAI: Direct to home (DTH) Dish TV will continue to focus on acquiring quality customers even as it saw a slow subscriber addition in the second quarter ended 30th September.
Dish TV Group CEO Anil Dua blamed the lower than expected subscriber addition in Q2 on price undercutting by peers particularly by a rival DTH player in South India. The weak macro-economic environment also played a part in the sluggish subscriber growth.
“Subscriber additions were slow this quarter as the second quarter normally is. Also, a not so robust macroeconomic environment, price undercutting by peers, along with heavy rains and flooding in many parts of the country put pressure on subscriber acquisitions and retention,” Dua told analysts during Q2 earnings conference call.
Dua noted that Dish TV chose to be resilient making the best of every opportunity coming its way. He stated that Dish TV maintained a fine balance between the subscriber acquisition and the cost of such acquisitions.
“The company intentionally avoided adding extremely value partial subscribers, ending the quarter with 42,000 subscriber additions at the net-level. Total net subscriber base at the end of the quarter was 23.94 million,” he said.
Dua termed the price undercutting as irrational while adding that Dish TV has refused to take that route. “And wherever we have felt that the quality of acquisition is going to be poor, we have avoided that and that is what we mean by being resilient. And we have led along wherever we felt that is a genuine customer acquisition opportunity lead into a genuine addition to the customer base we have played along.”
Dish TV CFO Rajeev Dalmia said that the price undercutting forced Dish TV to match the prices in the South market due to which Q2 ARPU took a hit. “But we could not help because those are key markets after our merger with Videocon, where today we are quite strong in those two markets. So it continued for quite some time. Now normality is returning and the NCF is also less discounted than it was before one month.”
He further stated that the price under-cutting was limited to South India and some parts of West Bengal and Odisha for some time.
Dua is confident that the H2 and Q3 will be better than the H1 due to growth during the festive season. “So we do feel that both Q3 as well as H2 will be stronger than, respectively Q2 and H1, because we think that festivals will herald better things and certainly Q4 last year was a weak quarter. So we certainly feel that second-half and Q3 are going to be both good.”
The Dish TV CEO was also queried about the gains by the DTH operator due to the exit of mainstream Hindi channels from DD Free Dish. Dua stated that the 2.5 lakh odd net subscriber addition in H1 includes gains from DD Free Dish. He added that the gains have not been as much as the DTH operator would have liked it to be.
He also stated that rural consumers are not willing to pay for even an FTA pack since they are used to getting channels for free due to DD Free Dish. He further explained that DD Free Dish still has enough content heft which is preventing large scale customer migration.
“So since the Free Dish platform does carry lots of other channels and even the vacant slots got substituted with other channels. So a lot of rural customers, I think, have adjusted to that new package and have not come in the kind of hoards that we might have expected them to come earlier. But yes, there have been gains there is no doubt about it, we have gained a fair bit in North and in other markets where Free Dish was strong,” he stated.
Dalmia stated that while DD Free Dish’s subscriber loss was temporary as rural distress prevented customers from moving to other platforms. The DTH operator is hoping that the free DTH customers will shift to pay DTH once the rural economy improved.
“Yes, though they came down for some time but what we see, this is because of the rural distress, again, there is a rise in the number of subscribers of Free Dish because some of the guys in that arena are okay with whatever is coming, it will be on, and that is all. Whatever is coming we are happy. So once this rural distress goes off then they will switch to pay DTH or maybe they will subscribe to pay DTH, for which they already have the set-top-box, either of Dish TV or any other cable operator or may be the DTH operator. So like earlier, it used to be, say 24 million-25 million, it came down by 1 million or 2 million, but now again it has reached 25 million – 26 million,” he elaborated.