Dish TV is India's oldest and largest DTH platform. Part of Subhash Chandra's media empire, it is a publicly listed company. On 31st March 2008, the company declared that it had seeded 3 Million STBs, of which 2.5 million were active. The statistics bring to light the plight of 500,000 ex-consumers who subscribed initially to the service and then rejected it.
3 MILLION STBS
Dish TV's gross registered subscriber base has crossed 3 million as on 31st March 2008. The net subscriber base stands at 2.5 million, after making adjustments for churned subscribers since the launch of the company 3 years ago. Defending the churn, a Dish TV official statement said "This compares very favorably with international norms wherein annual churn is in the 15% to 20% range. These subscribers are spread over various packages that the company has on offer."
Dish TV expects the ARPU (Average Revenue Per User) to improve in the next fiscal. "The subscribers who have moved out of the platform are largely those that were acquired in the initial stages of launch, from the rural and upcountry markets, who were at a lower ARPU. Restatement of the net subscriber base, after removing churn, will also give an improved ARPU performance," Dish TV said.
There Are 500,000 Dish TV Consumers Who Have
Rs 100 Crores Locked Up
In De-Activated STBs |
500,000 SUBS 'SHORT-CHANGED'?
The fact that there are 3 Million DishTV STBs out in the field, of which only 2.5 million are active, implies that 500,000 STBs are inactive. Clearly these 500,000 Subscribers have lost more than Rs 100 Crores; assuming that they have each paid Rs 2,000 as 'deposit' for the Dish TV STB, Dish & LNB!
Once subscription lapses, the Dish TV STB is completely non-functional. It cannot be utilised even to receive Doordarshan's Free-To-Air bouquet. The DishTV STB simply locks up, and can be reactivated only with a subscription renewal.
Once Subscription Lapses, The Dish TV STB Is Completely Non-Functional |
Dish TV charges Rs 2650 for its hardware + installation which includes a 3 month subscription. However, the agreement Fine print states that the Hardware is simply on hire to the consumer. A sticker on the STB reads "This Is Company Property Despatched For Installation At Customer Premise. No Sale Involved."
Hence it would seem reasonable to assume that consumers who no longer want the STB should receive (atleast a part) refund. Infact the company offers no refund and has no refund policy, of the subscriber's deposit.
Dish TV Offers No Refund And Has No Refund Policy, For The Subscriber's
Rented STBs! |
Cases have been reported of subscribers who's STBs have malfunctioned after a year. Since that model has been discontinued, Dish TV has asked subscribers to obtain new STBs and a new connection !
There is also the issue of both DishTV and TataSky rampantly flouting the law which dictates that they must provide CAM modules to consumers who want to shift from one DTH service provider to another. No such CAM modules have ever been distributed, by any DTH platform.
These practices that directly contravene the law, need to be addressed by the government, to provide consumers their rightful dues.
86K NEW SUBS IN MARCH
A company statement said that DishTV India Ltd added 86,000 new subscribers in March 2008.
These new subscribers helped it cross the 3 million mark in terms of gross registered subscribers but after making adjustments for subscribers that had left the platform since the launch of the company 3 years ago, the net subscriber base of the company stood at 2.5 million, at the end of March 2008.
Dish TV CEO Arun Kumar Kapoor said, "Today, we have subscribers in over 4,400 towns, which are covered through 575 Distributors and over 38,000 retail outlets. December also saw the entry of another DTH player, Sun Direct, in the 4 southern states. However, we continue to show robust growth in this territory, due to a combination of our superior regional languages offering and some aggressive marketing initiatives."
Dish TV offers a total of 180 channels in its bouquet, broadcast from the NSS-6 satellite.
An interesting fact is that DishTV today provides the largest number of Free-To-Channels to its subscribers, compared to any other Indian DTH platform.
Q-3 PERFORMANCE
Financials for the full financial year are not yet available, but details of Dish TV's third quarter performance have been declared.
DishTV has posted a net loss of Rs 1.16 billion for the quarter ended 31 December 2007.
DishTV added 297,000 new subscribers during Q3, up from 278,000 additions in Q2, an increase of 7% quarter-on-quarter. Its gross subscriber base stood at 2.7 million as on 31 December 2007.
During the period, Dish TV's operating revenue was up 48% at Rs 112 Crores compared to Rs 75.5 Crores in the previous quarter. Subscription revenues were up 26%.
The company's operating loss stood at Rs 64.16 Crores, up from Rs 47.232 Crores in the corresponding quarter of the previous fiscal.
Expenditure in the third quarter touched Rs 176 Crores, 43% higher than in the corresponding quarter of the previous quarter. Rs 105 Crores was spent on costs of goods and services, which is 46% of the total expenditure; 14% expenditure went on advertisement (Rs 30.62 Crores) and 11% on distribution (Rs 25.32 Crores).
Rs 700 CRORE NEW EQUITY PLANNED
Dish TV plans to raise Rs 7 billion in form of equity during the next 6 months. It has scaled up its fund requirement to Rs 16 billion due to a rise in subsidy cost. Earlier the Zee Group's direct-to-home (DTH) service provider had said that it had an investment plan of Rs 11 billion. Dish TV's current customer acquisition cost is Rs 2000, up from the third quarter cost of Rs 1880.
"We aim to raise around Rs 7 billion as equity over the next 6 months. We are looking at various options and have not finalised on the instrument. Our total fund requirement will be Rs 16 billion. We will have 60% equity and 40% debt," says a source.
Readers will recall that as reported in this magazine, a few months ago, Indivision Capital, the private equity arm of Kishore Biyani's Future Capital, withdrew its plans to invest Rs 2.5 billion for a 4.9% stake.
TOUGH GOING
The Indian DTH market is probably the toughest in the world. A relatively small subscriber base, with small ARPUs, and a 20% market churn, all point to a not-so-rosy future, atleast for the next 3 years.
To add to the turmoil, there are already 3 DTH players in the field : Dish TV (2.5 Million Subs), TataSky (1.5 Million Subs) & SUN TV (probably less than 0.1 million subs).
Doordarshan has over 5 million 'Free' DTH consumers, with DTH subscribers shifting to the Pubcaster's free service every time additional FTA channels are added on DD Direct+.
ADAG Reliance's BIG TV DTH has already commenced test transmissions and will probably launch in May this year. Based on Reliance's past launch strategies, the industry is expecting radical pricing, though its not clear how a sustained low price can yield a viable business model.
Incidentally, on the eve of Reliance DTH's launch, the government has started pressuring broadcasters to drop their channel prices offered to DTH platforms.
Bharti Telecom - another player with the requisite deep pockets has applied for a DTH licence and is awaiting availability of Ku band transponders.
Clearly more excitement and further churn is expected in the immediate future. DishTV has an uphill task before it can bag 3 Million subscribers - a mere fraction of the 72 million Cable TV households in India. n
