Govt should consider reduction in other taxes also: Dish TV

Salil Kapoor, COO, Dish TV, said the government should look more into the multiple taxation issue because the taxation issue is huge. We have about four types of taxes including the service tax, the VAT, entertainment tax and so on and if some ease is given on this front as well, this will help the industry grow.
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Dec 12, 2008, 10.50 AM | Source: CNBC-TV18

Govt should consider reduction in other taxes also: Dish TV

Salil Kapoor, COO, Dish TV, said the government should look more into the multiple taxation issue because the taxation issue is huge. "We have about four types of taxes including the service tax, the VAT, entertainment tax and so on and if some ease is given on this front as well, this will help the industry grow."

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Govt should consider reduction in other taxes also: Dish TV

Salil Kapoor, COO, Dish TV, said the government should look more into the multiple taxation issue because the taxation issue is huge. "We have about four types of taxes including the service tax, the VAT, entertainment tax and so on and if some ease is given on this front as well, this will help the industry grow."

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Salil Kapoor, COO, Dish TV

Salil Kapoor, COO, Dish TV said there would be some relief to the consumers which will be because of the reduction in CENVAT. He said the government should look more into the multiple taxation issue because the taxation issue is huge. "We have about four types of taxes including the service tax, the VAT, entertainment tax and so on and if some ease is given on this front as well, this will help the industry grow."

 

Here is a verbatim transcript of the exclusive interview with Salil Kapoor on CNBC-TV18. Also watch the accompanying video.

 

Q: What do you think about the CENVAT relief being passed on to consumers? Do you think there would be some ease in pressure in availability of set-top boxes and DTH services?

 

A: There is no problem in availability of set-top boxes as of now. The only thing is that there would be some relief which will be because of the CENVAT issue. However, this industry is based on a huge subsidy platform, therefore, we cannot see much of benefit being passed on to the subscribers. However, this will help the industry to grow. This industry is one of the infrastructure industries in the information space where we are the only way how we can provide the last mile connectivity even in the remote places in this country. So, there is a lot of support which this industry requires from the government side and the government should look more into the multiple taxation issue because the taxation issue is huge. We have about four types of taxes including the service tax, the VAT, entertainment tax and so on and if some ease is given on this front as well, this will help the industry grow.

 

Q: That point is taken but the immediate issue will be the kind of competition one is facing from biggies––there is Big TV, Tata Sky and the Airtel connection as well. Given all this, how does it push your own breakeven deadline? Does it push it back significantly?

 

A: No, it doesn’t push our breakeven simply because our numbers are ramping up in a much better pace in the last few months. In October, we did close to 4.5 lakh which was about 44–45% of the entire industry. So, more competition is welcomed because the overall visibility of the platform has gone multi-fold in the last few months with the launch of two big players. However, it doesn’t affect our leadership status as the learning’s that we have in this space of about four-years and the penetration we have in the market in terms of a distribution and the learning’s we have in terms of the content.

 

Q: Clearly, as the market leader you would have a lot of learnings, but you would also have a lot of cash burn. Is it something like a minimum of Rs 500 cash burn on every set-top box you add? Where is the money coming from? Will not that, per se because of your leadership status, push it back? Just give us a ballpark figure on what is the cash burn, how is the money coming and therefore where is the breakeven now coming?

A: The overall cash burn per box is higher than what you have just said, about Rs 500. It is much more than that. So, the overall money that is required in the overall acquisition of the new subscribers comes from two areas. One is the internal funding, and the other is the renewals that we get of all the customers that we already have.

We have a huge base of installed customers. Right now our subscriber base is close to 4.66 million subscribers. So, we get a monthly renewal from all of them that goes into the funding of the new acquisition as well. We also have our rights issue now, and we will be garnering around Rs 1140 crore from this, which would also be ploughed back into the acquisition of the new subscribers.

 

Q: What about the foreign investment cap being increased for DTH players? Have you heard anything from the government on that front?

 

A: We haven’t heard anything on that front. However, we are an India-based company so I don’t think that affects us in any significant manner.  

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