Dish TV continues to lose money; now ARPU declines  

Dish TV’s revenues for the September quarter have inched up by 4.3% over the same period last year. Revenues rose to Rs257 crore (against street estimates of Rs268 crore) and EBITDA was Rs22.90 crore (estimates of Rs18.60 crore) aided by conscious cost-cutting measures in reducing its advertising and commission cost to Rs40.80 crore in the September quarter from Rs46.80 crore in the June quarter. It posted a net loss of Rs56.10 crore against the estimate of Rs62.90 crore. The most important factor was that average revenue per user (ARPU) has declined to Rs139 in the September quarter from Rs142 in the June quarter. The reason for drop in ARPU is increasing price competition in television distribution. A war for customer addition is still on among Tata Sky, Dish, Sun and others which is undermining profitability. As a result, just like the TV channels, TV distribution companies also need constant capital infusion. The company is now looking to raise $15 million through the FCCB route. The other concern about Dish TV is declining market share (20%) of incremental additions and six-fold increase in customer acquisition cost over the past three years. Dish and its competitiors hope that the trend will shift from price-based offerings towards value-added features. Unfortunately, declining ARPUs show that this is really a long shot. The stock is trading at 40 times its EBIDTA.
–Subrata Das [email protected]