BENGALURU: Telecom Regulatory Authority of India (TRAI) numbers for the quarter ended 31 December 2016 (current quarter, Q3-17) reveal that active DTH subscriber growth in India was lowest since the quarter ended June 2015 (Q2-16) at just 1.2 percent or just 7.5 lakh (0.75 million). In the previous quarter the platform had added 14 lakh (1.4 million) active DTH subscribers and 25.5 lakh active DTH subscribers in Q1-17.

TRAI reports revealed that the active subscriber base in the country grew to 626.5 lakh (62.65 million) in Q3-17 from 619 lakh (61.9 million) in the immediate trailing quarter (Q2-17). Further, the industry has witnessed a higher growth of registered subscribers at 3 percent as compared to active subscribers in Q2-17 which was at 2.9 percent. In Q2-17 TRAI had reported 941.6 lakh or 94.16 million registered subscribers, which grew to 970.05 crore or 97.005 million in the current quarter.It may be noted that TRAI has been reporting the net active subscriber base including temporarily suspended subscribers that have been inactive for not more than 120 days since Q3-16 (quarter ended 31 December 2015).

Of the six private players in the Indian DTH ecosystem, three are publically listed and their numbers are available in the public domain – They are in alphabetical order: Airtel Digital TV Services or Airtel DTH which is a small segment/division of Indian telecom major Bharti Airtel Limited; Dish TV, the largest DTH player in the country in terms of number of subscribers; and Videocon d2h.

Airtel DTH, Dish TV and Videocon d2h have about two thirds (65 percent) of market share of the DTH universe by private players in India. Of the other three players, according to a TRAI report TataSky has a market share of 23 percent, while Sun Direct and Reliance have a market share or 10 percent and 2 percent respectively. It may be noted that at present probably the largest DTH player in India could be the government’s FreeDish, but since it is a free service, no subscriber data is available even with PrasarBharati. Please refer to the chart below:

For Q3-17, the subscriber growth of the three major players – Airtel DTH, Dish TV and Videocon d2h was more than the industry growth– their combined subscriber base grew 1.6 percent quarter-over-quarter (q-o-q) by 6.33 lakh (0.633 million) to 406.58 lakh (40.658 million) from 400.25 lakh (40.025 million) in the immediate trailing quarter. This means that the major contribution to growth of overall active subscribers – 84.4 percent was by these three players.

Among the three, Videocon d2h had the highest growth at 2 percent – its subscriber base grew 2.5 lakh (0.25 million) from 125.2 lakh (12.52 million) in Q2-17 to 127.7 lakh (12.77 million) in Q3-17. Airtel DTH subscriber base grew by 1.83 lakh (0.183 million) or 1.5 percent quarter-on-quarter (q-o-q) in Q3-17 to 125.88 lakh (12.588 million) from 124.05 lakh (12.405 million) in Q2-17. Dish TV, the largest private DTH player subscriber base grew by 2 lakh (0.2 million) or 1.3 percent q-o-q to 153 lakh (15.3 million) from 151 lakh (15.1 million).

Let us see how these three players performed in Q3-17

Airtel DTH

Airtel’s Digital TV Services segment (DTH segment) reported 17.7 percent year-on-year (y-o-y) increase in operating revenues for the quarter ended 31 December 2016 (Q3-17, current quarter). Also, Operating Profit (Earnings Before interest and Tax – EBIT) of the DTH segment in the current quarter increased 27.1 percent year-over-year (y-o-y).
Airtel DTH reported revenues of Rs 873.5 crore in Q3-17 and Rs 742.2 crore in Q3-16. EBIT for the corresponding periods was Rs 68.4 crore (7.8 percent margin of the segment’s operating revenue) and Rs 53.8 crore (7.2 percent margin of the segment’s operating revenue) respectively.
EBIDTA in Q3-17 also increased y-o-y – by 22.3 percent to Rs 302.6 crore (34.6 percent margin of the segment’s operating revenue) in the current quarter from Rs 247.4 crore (33.3 percent margin of the segment’s operating revenue).
Airtel’s DTH segment added 14.82 lakh subscribers between Q3-16 and Q3-17, or a 17.3 percent y-o-y increase. It had 125.88 lakh subscribers as on 31 December 2016. Q-o-q, the segment witnessed a 1.5 percent growth (1.83 lakh adds) in subscribers from 124.05 lakh in Q2-17.
ARPU in Q3-17 increased to Rs 232 from Rs 229 in the corresponding year ago quarter, but remained flat q-o-q as compared to the immediate trailing quarter.

Dish TV

Subscription revenue in the current quarter increased 3.3 percent y-o-y to Rs 692.10 crore from Rs 669.90 crore. TIO declined 3 percent to Rs 747.98 crore from Rs 771.48 crore.

Profit after tax (PAT) declined to almost a third (declined 61.0 Percent) y-o-y to Rs 26.68 crore (3.6 percent margin – of TIO) in Q3-17 from Rs 68.49 crore (8.9 percent margin) in Q3-16. EBIDTA in the current quarter declined 6 percent y-o-y to Rs 249.51 crore (33.4 percent margin) from Rs 265.45 crore (34.4 percent margin).

Videocon d2h

Videocon d2h computed subscription and activation revenue in the current quarter wasRs711.2 crore as compared to Rs 710.7 crore in the immediate trailing quarter.

Continuing the trend is has set in the previous two quarters, Videocon d2h reported a profit after tax (PAT) for Q3-17. The DTH major reported PAT of Rs 21.77 crore (2.8 percent margin) for the current quarter. It had reported PAT of Rs 6.32 crore (0.8 percent margin) for Q2-17, and Rs 2.66 crore (0.3 percent margin) for Q1-16. For the corresponding year ago quarter (Q3-17), the company had reported a loss of Rs 22.05 crore.Adjusted EBIDTA grew 33.2 percent y-o-y to Rs267 crore (35.4 percent margin) in Q3-17.

The DTH major also reported 13.3 percent y-o-y growth in net subscriber numbers at 127.7 lakh for Q3-17 as compared to 112.70 lakh and a 2 percent quarter-over-quarter (q-o-q) growth from125.2 lakh. Monthly Average revenue per user (ARPU) in the current quarter came in lower at Rs 205as compared to Rs 209 in the immediate trailing quarter.

Demonetisation impacts DTH industry

The Media and Entertainment industry has been hit by the recent demonetisation initiatives, and more so the carriage industry. The largest DTH player in terms on subscribers – Dish TV said in its earnings release Q3-17 that it’s could collect subscription revenue from just 30 percent of its subscribers post the demonetisation date of 8 November 2016. Demonetisation was also mentioned by Videocon d2h in its earnings papers. However, the players stepped forward to do their bit for the government’s demonetisation initiatives.

Dish TV CMDJawaharGoel said,“Subscribers as well as trade partners were extended temporary credit facilities basis their pasttransactions pattern. Subscriber awareness drives to promote alternate methods of paymentwere run both on the ground and on screen in addition to various other initiatives. Looking at the brighter side of it, demonetisation does promise an eventual less-cash dependentpopulation that should use online payment interfaces over cash for DTH recharges. That’s goingto be a boon for the DTH business.”

Goel is optimistic about the future. He said, “Though demonetisation has led to an initial distress, it also will result in certain structuralchanges that are going to benefit the economy in the long run. As far as our business isconcerned, the effect has already started coming in. As online payment transactions, creditcards and a less-cash society become buzz words today, we are happy to note an increase in ouronline transacting subscriber base from 30 percent to around 38 percent with around 22 digital wallets and thelike being integrated with the company. Every online recharge transaction vis-à-vis EPRS basedtransaction implies savings on recharge commissions paid by us.”