DTH industry revenue to grow 6 pc to Rs 22k cr in FY21 as people stay indoors: Crisil

By: |
September 11, 2020 10:17 PM

This is, however, lower than the 14 per cent growth in revenue witnessed in FY20, of which 9 per cent came from an increase in subscriber base and 5 per cent was due to a jump in average revenues per user (ARPU), its senior director Sachin Gupta said.

This fiscal (FY21), the subscriber base is seen increasing another 600-700 bps to 68 million, which will lift revenue growth up 400-600 bps.

People staying indoors due to the COVID-19 pandemic has proved to be a bonanza for direct-to-home (DTH) broadcasters as the industry is all set to post a growth of up to 6 per cent in its topline to Rs 22,000 crore in FY21, rating agency Crisil said on Friday.

“Direct-to-home (DTH) broadcasting, which accounts for 37 per cent of total television (TV) subscribers in India, is set to buck the economic downturn and log a revenue growth of 400-600 basis points (bps) to Rs 22,000 crore this fiscal,” Crisil said in a report.

This is, however, lower than the 14 per cent growth in revenue witnessed in FY20, of which 9 per cent came from an increase in subscriber base and 5 per cent was due to a jump in average revenues per user (ARPU), its senior director Sachin Gupta said.

“This fiscal (FY21), the subscriber base is seen increasing another 600-700 bps to 68 million, which will lift revenue growth up 400-600 bps.

“But ARPU is seen contracting 100-200 bps to Rs 310-315 on downtrading by viewers and reduction in charges for multi-TV subscribers as per the New Tariff Order (NTO) 2.0,” he added.

Last fiscal, the DTH subscriber base increased as cable TV subscribers shifted after implementation of the NTO 1.0, the agency said, adding DTH players transitioned smoothly as they already had better systems as compared to cable TV operators, who were grappling with integration and roll-out challenges.

Additionally, pricing parity required as per new regulations meant a 30-35 per cent increase in cable TV tariffs, which eroded the price advantage cable TV enjoyed over DTH, it said.

“Social distancing norms and work from home (WFH) are likely to keep people indoors for most of this fiscal. Besides, gradual resumption of the airing of new TV serial episodes and major sporting events such as Indian Premier League being streamed during the festive season should keep viewers hooked,” the agency said.

Over the past decade, TV penetration (as a percentage of total household) in India improved 1,000 bps, but was still at 69 per cent in fiscal 2020, indicating potential for further increase, it said.

Over the top platforms like Amazon Prime or Netflix do not pose much of a challenge to TV and both platforms will co-exist because of the low costs of the latter in India and also the challenges on high speed connectivity, Crisil said.
Conducive demographics, low penetration, and, most importantly, low cost will help the TV segment, its director Nitesh Jain said.

Despite a 18 per cent increase in capex at Rs 4,500 crore last fiscal, DTH companies were able to deleverage balance sheets because of healthy growth in cash accrual, the rating agency said, adding it expects the industry’s credit profile to continue improving this fiscal as well.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Tatas reply to Mistry group’s notice
2DHFL: Union Bank issues demand notice to Wadhawans
3Huawei starts ad campaign showing commitment for India