Digitization to drive ARPU and profitability

Dish TV observes that while the government is supportive of the digitization of TV industry, the pace of execution is slow. There has been a strong push toward digitization with advertisements from the government, broadcasters, DTH operators and MSOs. However, local cable operators who risk losing revenue have not been aggressive deploying set top boxes. Dish TV continues to gain subscribers of voluntary basis and believes the benefit of digitization is yet to kick in. The company believes the government will not black out cable-TV from 1 November as it may lead to viewer backlash but that it will keep pushing for digitization.

According to Dish TV, more than 70% of its subscriber base is in rural markets, where there is little or no analog cable infrastructure. The quality of cable in these markets is poor and it will require significant investment for digital cable operators to compete in these markets. The company said it is tough to operate in rural markets and sees little risk of an increase in competition and churn to cable.

Dish TV operates on a prepaid model. So, if the customer does not have the required balance, service is deactivated temporarily and the company loses revenue for the period. Dish TV believes that while the customer is willing to pay, there are delays in recharging the balance. The company expects these delays to reduce if mobile payments become popular, which could also help to improve ARPU.