Dish TV to raise Rs 1,000 crore from foreign markets

Vipin Bajaj - Televisionpoint.com | New Delhi
Dish TV, the direct-to-home (DTH) arm of Essel group, will raise Rs 1,000 crore from foreign markets, issuing foreign currency convertible bonds (FCCBs) by the end of this quarter.

The proceeds of the FCCBs will be used for enhancing the subscriber base to about 8 million within this financial year from 5.5 as of August 31, 2009, says Rajeev K Dalmia, chief financial officer, Dish TV to Televisionpoint.com.

Dish TV got shareholders' approval for overseas fund-raising as well as the Foreign Investment Promotion Board's (FIPB's) approval for raising Rs 750 crore earlier this year. The company has appointed Deutsche Bank for the transaction and it also plans to approach FIPB for raising another Rs 250 crore soon.

In the financial year 2010-2011, the company aims to increase its subscriber base further to 12 million. With the increase in subscriber numbers, the company expects the revenue to increase to Rs 1,250 crore this financial year from Rs 740 crore last year, Dalmia added.

"We have a market share of 40 per cent currently. Our churn rate, which includes customer default, lower package selection and delayed payments of subscribers, has fallen to 0.6 per cent from 0.7 per cent last year." Dalmia says.

"We have enough space for growth in the next couple of years as cable to DTH conversion is increasing in the country. Of the 80 million households connected with digital cable and DTH, only 13 million have a DTH connection." said Dalmia.

Dish TV has reported first quarter fiscal 2010 revenues of Rs 252.1 crore, representing a 53 per cent growth over the corresponding quarter in the previous fiscal. Net loss of the company was at Rs 69.2 crore, which is significantly lower than a loss of Rs 125 crore in the prior-year quarter.

Total expenses for the quarter stood at Rs 301 crore, as against Rs 276 crore a year ago. The company currently has Rs 1,100 crore worth of debt on its balance sheet, of which Rs 850 crore is term loan from banks and Rs 300 crore is inter-corporate loans from other group companies.

The DTH industry is witnessing an increased competition with the entry of players like Tata Sky, Reliance Big TV, Airtel digital TV, Sun Direct and new entrants like Videocon's DTH service.

Back in 2005, when Dish TV was the sole private DTH service provider, the total number of paid DTH subscriber was 600,000. After the entry of Tata Sky, the number had more than tripled to 2.6 million by 2006. Last year, amid a five-operator scenario, the total number of subscribers crossed 10 million

During the first quarter, Dish TV had revamped its programme packaging by classifying it into three packages - Silver, Gold and Platinum. Recently, the company has tied-up with shaadi.com, monster.com and yatra.com for interactive value-added services like matrimonial's, job searches and traveling, respectively.

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