This story first appeared in DNA Money edition on Thursday, July 5, 2012.
Dish TV India, the country’s top direct-to-home (DTH) player, has taken price hikes in channel packs and new subscriptions, effective July 2, as part of its annual pricing review.
RC Venkateish, CEO, Dish TV, said this was the first price increase in the calendar year 2012.
“We have taken an increase of Rs20 across rest of India (North India) packs, though no increase has been effected in the South India packs. Also, the set-top box prices have been increased to Rs1,790 from Rs1,590 charged earlier. This will go towards dealing with the impact of rupee depreciation.”
According to an earlier guidance by the management, the company was expecting an increase of 12-15% in the content costs for the current fiscal. Venkateish, however, said, “There’s no connection between content costs and the hike in the pack prices.”
He said, “Irrespective of whether they are bought in advance or not, the set-top boxes are bought on buyer’s credit of 24-36 months and therefore currency depreciation has an impact. In case the rupee recovers in the coming quarters, we stand to gain.”
Other DTH operators -- Tata Sky, Airtel Digital TV and Reliance Digital TV -- did not offer a comment on whether they will hike prices.
Rahul Kundnani, research analyst - institutional equities - media and retail, SBICAP Securities Ltd, however, said that price hike by leading DTH player will prompt other DTH operators to follow suit.
He said, “The price hike will not only improve Dish TV’s Arpu (average revenue per user), but also mitigate the impact of higher content and other costs. Dish TV’s exit Arpu was Rs151 in fiscal 2012 was flat as compared to fiscal 2011. The impact of this price hike will be seen in the current quarter and exit Arpu for this fiscal is seen at Rs155-160. Its operating profit margin, which was 24% last fiscal, is seen at 27% in fiscal 2013 and it is also expected to turn net profit positive during the year.”
Dish TV India, the country’s top direct-to-home (DTH) player, has taken price hikes in channel packs and new subscriptions, effective July 2, as part of its annual pricing review.
RC Venkateish, CEO, Dish TV, said this was the first price increase in the calendar year 2012.
“We have taken an increase of Rs20 across rest of India (North India) packs, though no increase has been effected in the South India packs. Also, the set-top box prices have been increased to Rs1,790 from Rs1,590 charged earlier. This will go towards dealing with the impact of rupee depreciation.”
According to an earlier guidance by the management, the company was expecting an increase of 12-15% in the content costs for the current fiscal. Venkateish, however, said, “There’s no connection between content costs and the hike in the pack prices.”
He said, “Irrespective of whether they are bought in advance or not, the set-top boxes are bought on buyer’s credit of 24-36 months and therefore currency depreciation has an impact. In case the rupee recovers in the coming quarters, we stand to gain.”
Other DTH operators -- Tata Sky, Airtel Digital TV and Reliance Digital TV -- did not offer a comment on whether they will hike prices.
Rahul Kundnani, research analyst - institutional equities - media and retail, SBICAP Securities Ltd, however, said that price hike by leading DTH player will prompt other DTH operators to follow suit.
He said, “The price hike will not only improve Dish TV’s Arpu (average revenue per user), but also mitigate the impact of higher content and other costs. Dish TV’s exit Arpu was Rs151 in fiscal 2012 was flat as compared to fiscal 2011. The impact of this price hike will be seen in the current quarter and exit Arpu for this fiscal is seen at Rs155-160. Its operating profit margin, which was 24% last fiscal, is seen at 27% in fiscal 2013 and it is also expected to turn net profit positive during the year.”
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