Dish TV posts Q1 net loss of Rs 14 cr

Firm banking on MSOs adopting the prepaid model for revenue collection

Direct-to-home service provider Dish TV saw a decline in revenue for the first quarter of the current fiscal, ending on June 30.

Revenue was down 5.1 per cent on a year-on-year (Y-o-Y) basis, from Rs 778.6 crore in Q1 last year to Rs738.9 crore in FY18. Subscription revenue reduced by 5 per cent in the quarter under consideration at Rs 691.7 crore, as compared to Rs 728.2 crore in the same quarter in the previous financial year.

Consequently, EBITDA was down 22.9 per cent, from Rs 261 crore in the first quarter last year to Rs 201.2 crore in the corresponding quarter in FY18. Dish TV reported a net loss of Rs 13.9 crore this year, while it had clocked a profit of Rs 36.1 crore last year.

Average revenue per user (ARPU) grew 10.4 per cent on a quarter-on-quarter (Q-o-Q) basis, standing at Rs 148. The company hopes ARPUs to get a tailwind from the major multi system operators (MSOs) adopting a prepaid model for revenue collection.

Direct collection should help correct certain anomalies in the business model of MSOs, thereby helping the overall industry. The company added a net of 186,000 subscribers in Q1 this year, while churn was at 1 per cent per month.

The month of Ramadan that fell during the last month of the first quarter moderated subscriber additions and recharges. This year the period of Ramadan fell completely in the first quarter, as against a Q1-Q2 split that occurred last year.

Involvement in the GST transition process during the last few days of the quarter also diluted some managerial attention towards the business. Seasonality impacted the growth in advertisement and bandwidth revenues. The company, however, remains highly optimistic about the future growth potential of these two revenue line items.

Jawahar Goel, CMD, Dish TV India Limited,said: "Dish TV has successfully transitioned to the GST regime. The DTHindustry has seen a reduction in the overall indirect tax rates under GST.Though benefits due to the unified tax may take some time to reflect in numbers, the sheer check on tax avoidance in the informal cable sector should be immediately helpful in reducing irrational competition from cable. TheHarmonized System Nomenclature (HSN) codes, unit and rate which need to be separately declared in the invoice in value chain right from the broadcasters to the local cable operator, under GST will give a logical and systematic classification to goods and services thus reducing the possibility of misdeclaration by businesses. The total amount of GST to be collected and payable by Dish TV during the current quarter would be to the tune of Rs 135 crore."