Siti to focus on growing ARPU, increasing market share in FY19

MUMBAI: Multi system operator (MSO) Siti Networks is planning to seed 2.5 million set top boxes (STBs) in FY19. The company had seeded 3.1 million STBs in FY18 taking its active digital subscriber base to 11.5 million.

“We are targeting a seeding of 2.5 million plus this year. We seeded 3.1 million STBs in FY18,” Siti Networks chief business transformation officer Rajesh Sethi said while speaking to analysts during a conference call after the fourth quarter results.

Sethi also said that the company has a million STBs in inventory. Siti Networks CFO Sanjay Berry added that the inventory includes STBs which may not be physically available with the company.

Sethi noted that the first nine months of FY18 went into growing the average revenue per user (ARPU) in digital addressable system (DAS) areas. In the fourth quarter, the focus was to correct the content costs. He expects ARPU to grow at 20% in FY19.

“In Q4, we went behind content whereas in the first 3 quarters we were behind ARPUs. Now, again from this quarter, we have gone behind the ARPU, right. We are pretty confident because as we close 31st March, our ARPU has grown by roughly 9-10%. This year, we are targeting that it should move up by at least 20%,” he asserted.

The company has a Capex outlay of Rs 350 crore for FY19. The company’s Capex in FY18 was Rs 400 crore while in the fourth quarter the Capex was Rs 56 crore.

“Capex outlay for FY19 would be around Rs 350 crore,” Berry said.

“In Q4, our Capex was close to Rs 56 crore and for full year basis, it is close to about Rs 400 crore,” Sethi added.

The cable TV company had renewed content deals with big broadcasters like Star India and Sony Pictures Networks India. Overall, its content cost per subscriber has declined by 31%, Sethi said.

“We closed big content deals in quarter 4 which is Star, Sony and one more and as we close these deals, we are clear for the year. Now as we go forward, our aim is that while we have been able to create a base effect of lower content cost for us, we should be able to maintain that base and ensure that our content cost should remain in the same zone. We have been tracking our cost per subscriber and it has gone down to 31%, we want to take it further down,” he elaborated.

Sethi said that the content cost reduction has been better than what it had projected earlier. The company looks at content cost on a net business which includes carriage revenue inflow and content cost outflow. “While we have maintained our carriage income flat, so when you look at the sum of two, we have gained,” he added.

Speaking about the broadband business, Sethi said that the company didn’t incur much Capex on broadband in Q4. The company is drawing up a new strategy for the broadband business. The company’s gross and net broadband subscribers stand at 2.5 lakh and 1.73 lakh respectively.

“We have already made a plan which we have not announced yet. But till that point what we are trying to do is we were trying to keep our broadband consumer base static. So, we are still maintaining around 173,000 odd consumer base when it comes to broadband at an active level,” he stated.

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