Expect subscription revenue growth in FY14: Hathway

G Subramaniam, CFO of Hathway Cable believes Phase II is likely to be less challenging for them. The company has seen substantial rollout of set top boxes in the recent past, informed Subramaniam. He is also hopeful of seeing considerable growth in set top box sales in the second phase of digitisation.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap Tech Control

Budget 2017

Presented By:

DAYS hours minutes

Co-Presenting Sponsor :

Associate Sponsors :

Co-Presenting Sponsor :

Associate Sponsors :

Home » News » Business

Nov 19, 2012, 04.02 PM | Source: CNBC-TV18

Expect subscription revenue growth in FY14: Hathway

G Subramaniam, CFO of Hathway Cable believes Phase II is likely to be less challenging for them. The company has seen substantial rollout of set top boxes in the recent past, informed Subramaniam. He is also hopeful of seeing considerable growth in set top box sales in the second phase of digitisation.

Like this story, share it with millions of investors on M3

Expect subscription revenue growth in FY14: Hathway

G Subramaniam, CFO of Hathway Cable believes Phase II is likely to be less challenging for them. The company has seen substantial rollout of set top boxes in the recent past, informed Subramaniam. He is also hopeful of seeing considerable growth in set top box sales in the second phase of digitisation.

Post Your Comments

Share Cancel

G Subramaniam (more)

CFO, Hathway |

We expect the set top box rollout in phase-II cities to commence very soon as the government has reiterated its position and has announced March 31 as the deadline

- G Subramaniam (CFO)

As the first phase of digitization was implemented from November 1, G Subramaniam, CFO of Hathway Cable believes Phase II is likely to be less challenging for them. The company has seen substantial rollout of set top boxes in the recent past, informed Subramaniam. He is also hopeful of seeing considerable growth in set top box sales in the second phase of digitisation.

In the past quarter, Hathway has added around 2 million subscribers and at present, have about Rs 60 crore cash on books. Subramaniam further added that they have a sufficient inventory to cater to the needs of Phase-II. He expects an increase in subscription and advertisement revenues in FY14.

Also read: Digitization phase II: Broadcasters, MSOs to outshine DTH

Here is the edited transcript of the interview on CNBC-TV18.

Q: Can you give us an idea of how much you could increase subscribers in the past six months, especially in the last quarter and how do you see the tally in the second half of the year?

A: We have always been saying that the number of subscribers whom we get paid for is about 15-20 percent, obviously there is an opportunity to grow the subscriber base substantially. While Phase-I was supposed to have kicked off on the October 1, we are still continuing to rollout set top boxes and we have been seeing a substantial rollout of boxes in the course of the last couple of weeks.

If you take out that rollout, the cumulative rollout since early this year has been to nearly 1.8-1.9 million subscribers. We expect this phase to rollout boxes to more than 2 million subscribers if you add all the three cities of Mumbai, Delhi and Kolkata through our JV partner. It could fall anywhere between 2-2.2 million subscribers in phase-I.

After that we hope that in phase-II there will be a further acceleration because Hathway along with its JV partner is present in almost 65 percent of the 39 cities where Phase-II is supposed to start. We expect the set top box rollout in phase-II cities to commence very soon as the government has reiterated its position and has announced March 31 as the deadline.

Assuming that the deadline is met, we should see a substantial acceleration in distribution of boxes in the course of the next few months, gathering pace as we reach March 31. The problem is subscribers wait till the last minute. But, once subscribers see that the government stuck to its schedule in Phase-I, we will find it less challenging in phase-II.

The number of boxes can be anywhere upwards of 3 million. Along with our joint venture partners, we probably have to rollout 1.5-2 million boxes in the course of the next few months. To this, if you add the territories that are owned by our JV partners that will be amounting to another 2 million boxes. That is the type of numbers we are looking at now. We are fairly well stocked with set top boxes and we don’t see that as a particular challenge. We have already orders in the pipeline for the incremental needs as we go along.

Q: I wanted to concentrate on how exactly would you be funding phase-II, is it going to be via debt? Can you give us some perspective on what the balance sheet of the company would look like at this point and post Phase-II?

A: If you see close of September, we had about Rs 400-404 crore of gross debt. We had around Rs 60 crore of cash on the balance sheet and therefore, the net debt was around Rs 340 crore or so. Our net worth at that point of time would be just under Rs 800 crore. Therefore, we are well within control at this point of time.

Obviously, a substantial part of the requirements of Phase II will be met first by vendor credit and then the takeout financing will be by some form of debt. We expect it to be anywhere between Rs 150-200 crore of incremental debt. We must remember that it is not that we are funding the full cost of the boxes, we recover up to Rs 500 per box as activation charges. What we have to fund is about two third of the cost of the set top boxes.

Over and above this, net worth rerated investments will also have to be made. Some of our head ends will have to be upgraded to carry additional channels. As you know the TRAI had originally mandated about 500 channels as the capacity of these networks. We expect that post the TDSAT (Telecom Disputes Settlement and Appellate Tribunal) review, on an average between 250-400 channels will be rolled out across the country. In order to provide for some network related investment, I would say it may be in the range of about Rs 200 crore.

I must admit that the plans are still being made and we will have a clearer picture on the actual balance sheet closer to December, by when our board would have approved the plans and then we will be accelerating on our rollout.

1 2 3
Buy, Hold, Sell ? Hear it first on M3
Expect subscription revenue growth in FY14: Hathway

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login