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Direct-to-Home (DTH) companies are expected to record higher revenues growth than cable companies in the remaining two phases of pan-India digitisation drive.
There are a few critical factors which work in favour of DTH companies. First, it is the recent data released by the Ministry of Information & Broadcasting about seeding of set top boxes (STBs). According to the Ministry of Information and Broadcasting (MIB), in phase-III of pan-India digitisation, out of 35.21 million STBs deployed in phase-III areas, DTH companies deployed close to 69%, while cable companies deployed 31.2%. "DTH is clear winner for phase III and phase IV because of huge service set up and retail outlet penetration. Inventory of set-top-boxes (STBs) has never been issue with us. We have already experienced significant jump in numbers in last 3 months," said Anil Khera, CEO of Nasdaq-listed Videocon D2h Ltd.
Financials of DTH companies are better than cable companies. According to an analysis of Ambit Capital, the cumulative operating cash flow generated by top four DTH players by subscribers, Dish TV, TataSky, Airtel DTH and VideoconD2H has trebled during FY12-FY15 while cumulative operating cash flow of large cable companies such as Hathway, Den Networks, IndusInd Media & Communications has been constant. In the past few quarters,Dish TV has turned free cashflow positive. DTH companies have far superior operating profit margins than cable companies. Vivekanand Subbaraman, media and entertainment analyst with Ambit Capital said, "Even after three years of digitisation, cable companies continue to exhibit poor operational performance. In FY15, on a recurring EBIDTA margin front, which is arrived by excluding activation income, top four cable companies have 4% recurring EBIDTA margin, while DTH top four DTH companies have recurring EBIDTA margin of 23%."
DTH companies expected to record higher revenues than cable companies - The Economic Times
There are a few critical factors which work in favour of DTH companies. First, it is the recent data released by the Ministry of Information & Broadcasting about seeding of set top boxes (STBs). According to the Ministry of Information and Broadcasting (MIB), in phase-III of pan-India digitisation, out of 35.21 million STBs deployed in phase-III areas, DTH companies deployed close to 69%, while cable companies deployed 31.2%. "DTH is clear winner for phase III and phase IV because of huge service set up and retail outlet penetration. Inventory of set-top-boxes (STBs) has never been issue with us. We have already experienced significant jump in numbers in last 3 months," said Anil Khera, CEO of Nasdaq-listed Videocon D2h Ltd.
Financials of DTH companies are better than cable companies. According to an analysis of Ambit Capital, the cumulative operating cash flow generated by top four DTH players by subscribers, Dish TV, TataSky, Airtel DTH and VideoconD2H has trebled during FY12-FY15 while cumulative operating cash flow of large cable companies such as Hathway, Den Networks, IndusInd Media & Communications has been constant. In the past few quarters,Dish TV has turned free cashflow positive. DTH companies have far superior operating profit margins than cable companies. Vivekanand Subbaraman, media and entertainment analyst with Ambit Capital said, "Even after three years of digitisation, cable companies continue to exhibit poor operational performance. In FY15, on a recurring EBIDTA margin front, which is arrived by excluding activation income, top four cable companies have 4% recurring EBIDTA margin, while DTH top four DTH companies have recurring EBIDTA margin of 23%."
DTH companies expected to record higher revenues than cable companies - The Economic Times
