Dish TV eyes 5 lakh subscribers this qtr

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Dish TV eyes 5 lakh subscribers this qtr

Jawahar Goel, MD, Dish TV, said the company is likely to add 5 lakh subscribers in this quarter. He said post the Big TV launch, all players together are likely to add 5-6 lakh new users per month. The company is contemplating raising money through rights issue.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about Dish TV India See previous management interviews See what other Experts & Brokerages are saying about Dish TV India Dish TV India BSE | NSE 25/05/12 Are Mutual Funds betting on Dish TV India?

With the launch of ADAG's Big TV, competition is only going to get tougher in the DTH space, which would pressure on ARPU s or Average Revenue Per User, as most players go in to subsidise their services. Videocon and Bharti are also expected to launch DTH services this fiscal.

Jawahar Goel , MD, Dish TV , said the company is likely to add 5 lakh subscribers in this quarter. He said post the Big TV launch, all players together are likely to add 5-6 lakh new users per month. The company is contemplating raising money through rights issue.

Dish TV currently has about 59% of the market share, which is followed by Tata Sky . The company has close to 3.5 million customers. It reported a gross addition of 1.67 lakh subscribers in July.

Excerpts from CNBC-TV18's exclusive interview with Jawahar Goel:

Q: It has been going good so far for you in terms of the run rate you have. But given that one competition that was on the anvil have already announced their plans to rollout there is another one sponsored by Bharti Enterprises which is likely to come on board. How much of a hit would it mean for an already existing player such as yourself?

A: We were the only player till a few years ago. Some time in 2006, we saw Tata Sky coming in. When we were alone, we were converting around 30,000-35,000 subscribers on a month-on-month basis. When Tata Sky came, the market grew to roughly about 200,000 conversions every month.

When we saw Sun coming in as a third player, the market grew to 350,000 conversions on a monthly basis. With Big TV's launch, the market will grow to 500,000 to 600,000 every month. So, we have seen that the market has grown with competition because there are 120 million TV households. DTH at this moment is still at a nascent stage.

Q: Your Q1 numbers did see a lot of pressure. It was probably a net loss of Rs 125 crore versus a loss of Rs 89 crore in the year ago. Given that kind of pressure on your balance sheet already would you say that this competition only adds to that pressure? Do you push back your breakeven date now?

A: We are not pushing back. We are preponing our spend. In the last quarter, we added 400,000 subscribers. In the current quarter, we should be adding half a million subscribers. We are going pretty strong. But we are subsidising the losses, and we will add more subscribers. This will amount to additional cash losses in the initial period and this would prepone our breakeven point.

Q: How much of an advancement of the breakeven time have you worked out at this juncture because it seems a little unlikely. The fact is that subscriber addition costs are likely to go up as new player comes into the market. Also, funding would be a big issue because a lot of these companies do have a lot of funds in their balance sheet to roll out services. So that is going to be another aspect that you would be watching out for which would put in pressure on your balance sheet as well particularly on the interest cost front. How are you going to be working all these equations out and then still a meet a deadline for breakeven?

A: The economics of this business is very well known in our investor community. We are going as per our business plan. We are soon going to raise the money through the rights issue, which is going on as per plan. So, I do not know what kind of concerns you have on fund raising position on Dish TV.

Q: Is 1,200 crore all that you need right now, you would not be looking at any more fund in the near-term?

A: We require cash of around Rs 1,600 crore. The Rs 400 crore long-term institutional loan is already tied up, or part of that has been disbursed. There is no concern on that front.

Q: Could you forecast your bottomline figure for the year-end FY09 and for FY10?

A: I would not like to discuss the forecast for the financial year at this moment.