Dish TV to raise Rs 1,000 crore

Dish TV, the direct-to-home (DTH) arm of Subhash Chandra’s Essel group, will raise Rs 1,000 crore from foreign markets, issuing foreign currency convertible bonds (FCCBs) in a month.

The proceeds of the FCCB will be used for enhancing the subscriber base to 7.5 million within this financial year from 5 million earlier, Dish TV Chief Financial Officer Rajeev K Dalmia said.

The company, which got shareholders’ approval for overseas fund-raising as well as the Foreign Investment Promotion Board’s (FIPB’s) approval for raising Rs 750 crore, has appointed Deutsche Bank for the transaction. It also plans to approach FIPB for raising another Rs 250 crore soon.

In the next financial year, the company aims to increase its subscriber base further to 11 million, Dalmia added. With the increase in subscriber numbers, the company expects the revenue to increase to Rs 1,250 crore this financial year from Rs 740 crore last year. Also, the company is targeting an average revenue per unit (ARPU) of Rs 160, up from Rs 142, said Dalmia.

“We have a market share of 39 per cent currently. Our churn rate, which includes customer default, lower package selection and delayed payments of subscribers, has fallen to 0.6 per cent from 0.7 per cent last year. Moreover, we have enough space for growth in the next couple of years as cable to DTH conversion is increasing in the country. Of the 80 million households connected with digital cable and DTH, only 12 million have a DTH connection,” said Dalmia.

Dish TV, sister firm of Zee TV, had a debt of Rs 650 crore as of March 2009 along with cash and cash-equivalents of Rs 350 crore on its books.

According to a Ficci-KPMG report, the DTH industry is witnessing an increased competition with the entry of new players like Reliance ADAG, Airtel and Sun TV.

Back in 2005, when Dish TV was the sole private DTH service provider, the total number of paid DTH subscriber was 600,000. After the entry of TataSky, the number had more than tripled to 2.6 million by 2006. Last year, amid a five-operator scenario, the total number of subscribers crossed 10 million.

“The DTH industry is forecasted to surge at a compounded annual growth rate (CAGR) of around 30 per cent by 2012. That’s because of three factors — good quality in terms of picture, sound and value-added services that DTH provides,” said Maneesh Mathur, chief operating officer of P9 Integrated — a film entertainment marketing company.

During the first quarter, Dish TV had revamped its programme packaging by classifying it into three packages — Silver, Gold and Platinum.

The company also launched an interactive value-added service, Shaadi Active, in association with a matrimonial portal shaadi.com. It already has tie-ups with monster.com and yatra.com for other value-added services like job searches and travelling.