Hathway Q2 standalone net loss widens due to subs churn, ARPU degrowth

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MUMBAI: Cable TV and broadband service provider Hathway Cable and Datacom’s standalone net loss has widened to Rs 5.9 crore for the quarter ended 30 September compared to Rs 2.6 crore in the trailing quarter.

The company’s operating EBITDA has dropped 3% to Rs 53.8 crore from Rs 55.3 crore a quarter ago. EBITDA margin has dropped 200 Bps to 41% from 43%.

Hathway’s total income remained flat at Rs 130.6 crore compared to Rs 129.8 crore. Total expenditure increased 3% to Rs 76.8 crore from Rs 74.5 crore.

During the quarter, the company’s broadband subscriber base remained unchanged at 770,000 as the churn rate is high due to loss of low usage customers to telecom operators. The company didn’t add any new home passes with the total home passes remaining unchanged at 5.5 million.

Apart from the regular 2% monthly churn, the company lost another 30,000 customers during the quarter to low-value plans of mobility. The company said that the customer usage data for Q2-FY19 not available as provisioning system QPS upgradation is WIP.

Hathway’s broadband business saw an Rs 18 drop in ARPU to Rs 672 compared to Rs 690 in the trailing quarter.

The company said that the drop in average revenue per user (ARPU) is due to the realignment of product portfolio wherein low-price plans also have higher GBs. It further stated that the drop in ARPU compensated by better seasonality.

On a YoY basis, the company added 25,000 home passes. The company said that it will not take any further home pass expansion during the H2 FY19. Instead, it will focus on monetisation of existing home passes.

The company said that GPON FTTH Parallel network is being deployed in high potential, high penetrated DOCSIS home passes. Opportunity to increase market share by offering 200 MBPS – 500 MBPS speed to premium consumers.

It launched 300 Mbps/2 TB plan along with Wi-Fi mesh router in Chennai. The Bengaluru/Mumbai launch is planned by Q4 FY19.

Hathway Play box based on Android platform launched for only broadband customers. It will provide world-class large screen OTT viewing experience to Hathway broadband customers. Seeding will start in Q3-FY19 in selective broadband markets.

Hathway Digital, the cable TV subsidiary of the company, saw a 2% jump in EBITDA at Rs 37.1 crore as against Rs 36.3 crore in Q2 FY19. EBITDA margin remained flat at 14%.

Total income from the cable TV company increased 3% to Rs 262.4 crore from Rs 254.7 crore. Subscription TV revenue was up 5% at Rs 165.8 crore. Placement revenue remained flat at Rs 76.1 crore. Activation revenue declined 6% to Rs 16.6 crore.

Total expenditure rose 3% to Rs 225.3 crore from Rs 218.4 crore. Pay channel cost increased 4% to Rs 156.1 crore.

Hathway Digital’s universe de-grew to 7.1 million during the quarter compared to 7.2 million in the previous quarter. The company lost 100,000 subscribers in digital addressable system (DAS) Phase II areas. The DAS Phase II universe shrank to 2.3 million from 2.4 million.

The company said that the effective monetisation has resulted in significant ARPU increase. The Phase I ARPU increased to Rs 110 from Rs 108. In Phase II, the ARPU increased to Rs 105 from Rs 102 while in Phase III and IV the ARPU increased to Rs 80 and Rs 62 respectively from Rs 75 and Rs 58. The Q2 FY19 collection efficiency is at 99%.

Hathway Digital strengthened its high definition (HD) offering. The multi system operator (MSO) offers 96 HD channels. The MSO added 27,000 HD customers in Q2 FY19. The HD subscriber addition resulted in Rs 80 per consumer per month incremental revenue.

In October, the company launched its hybrid set top box (STB) Hathway Ultra Smart Hub. The commercial roll-out of the STB is planned in December. Hathway said that the disruptive product will be a vehicle for improvement in consumer satisfaction, market share gain and increasing monetisation.

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