Hathway Cable Subscription Revenues Down

Hathway has aggressively started promoting prepaid billing structure for all its primary subscribers. The company expects this rollout to be completed over the next quarter so as to cover 100% of its primary subscriber base. The company plans to roll out prepaid billing for secondary customers post completion of primary subscriber rollout. It will improve collections in the coming quarters. The company has deployed over 10k HD boxes in Q1. Going ahead, the management expects steady uptick in ARPU on the back of increase in consumer ARPU as new TV packages are launched across its network, prepaid billing and higher HD subscribers. The management guides Phase I and Phase II ARPUs to increase to Rs110 and Rs100 by F16-end on the back of packaging. The content cost, net off placement, is likely to grow by ~15% YoY in F16e.

Broadband revenues grew 56.3% YoY to Rs650mn. The broadband subscriber base was 0.46 million at the end of Q1, including 0.17 million DOCSIS 3.0 subscribers. Broadband business continues its momentum of upgrading LAN/DOCSIS 2.0 consumers onto DOCSIS 3.0 platform. Incremental consumer ARPU has reached Rs850 levels. The roll-out of DOCSIS 3.0 has led to an increase in broadband ARPUs to Rs577 vs. Rs530 QoQ. The company has started providing for 8% license fees which accounted to Rs52mn in Q1 as per renewed Unified Service License conditions. 

Cable universe is stable at 11.8 million subscribers, b) the paying digital subscriber base grew to 6.6 million, c) standalone net debt grew to Rs10,414mn vs. Rs9,143mn QoQ, d) quarterly EBITDA inclusive of Hathway’s economic interest in subsidiaries/JVs/associate companies would aggregate to ~Rs410mn and e) broadband capex expected to be Rs1,700mn in F16 (including capex of Rs1,000mn for additional 600k home pass)