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Dish TV India
Festival shopping - what's the best
deal?
Event
We visited a couple of retail outlets across Mumbai to get an idea of the
‘festive offerings’ from the different DTH operators. Since operators are
maintaining rational competition, the consumer in us was disappointed by the
lack of tempting offers. Amongst the six DTH operators, Dish and Airtel were
the most aggressive. We continue to like Dish and believe the festive season
will help the company meet its gross addition target of 3–3.5m subs in FY12.
Impact
Dish and Airtel lower their STB price by Rs250 for the festive season.
The standard set top box price at Dish TV and Airtel Digital TV is Rs1,290 (vs.
~Rs1,550 earlier). This is the most aggressive offer we have seen across the
six DTH operators. (Detailed offers are tabulated on page 2).
Free subscription offers limited to a maximum of two months. The DTH
operators have expanded their free content subscription to a maximum of two
months – the standard free content package is only for one month. This is a
significant difference from the peak competitive intensity seen during 2009-10
when operators were undercutting their ARPU by extending the free
subscription period.
Season push in HD offerings evident in our checks. Of our estimated 14m
colour HD TV sets to be sold in FY12E, we expect 6m to be flat panel TVs.
During our shopping trip, we found sales representatives to be aggressive in
offering HD DTH connections bundled with high end TV sets.
Festive season – a key contributor to annual sales. Festive quarter sales
historically make up ~30% of the DTH operators’ full year gross additions and
are crucial in setting the tone for their full year subs acquisition. We see some
downside risk to our current 0.8m subs addition forecast for 2Q but would wait
until after the festive quarter before re-assessing our full year target of 3.5m
subs addition.
Dish TV 2Q expectations. We expect Dish TV to report 2Q revenue of
Rs4.9bn, with margins of 28% and net loss of Rs30m. Our subs addition
forecast of 0.80m has some downside risks that are already well known to the
market, and we expect a modest 1% QoQ improvement in ARPU to Rs151.
Earnings and target price revision
No change.
Price catalyst
12-month price target: Rs95.00 based on a DCF methodology.
Catalyst: Festive season turnout.
Action and recommendation
Reiterate OP.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dish TV India
Festival shopping - what's the best
deal?
Event
We visited a couple of retail outlets across Mumbai to get an idea of the
‘festive offerings’ from the different DTH operators. Since operators are
maintaining rational competition, the consumer in us was disappointed by the
lack of tempting offers. Amongst the six DTH operators, Dish and Airtel were
the most aggressive. We continue to like Dish and believe the festive season
will help the company meet its gross addition target of 3–3.5m subs in FY12.
Impact
Dish and Airtel lower their STB price by Rs250 for the festive season.
The standard set top box price at Dish TV and Airtel Digital TV is Rs1,290 (vs.
~Rs1,550 earlier). This is the most aggressive offer we have seen across the
six DTH operators. (Detailed offers are tabulated on page 2).
Free subscription offers limited to a maximum of two months. The DTH
operators have expanded their free content subscription to a maximum of two
months – the standard free content package is only for one month. This is a
significant difference from the peak competitive intensity seen during 2009-10
when operators were undercutting their ARPU by extending the free
subscription period.
Season push in HD offerings evident in our checks. Of our estimated 14m
colour HD TV sets to be sold in FY12E, we expect 6m to be flat panel TVs.
During our shopping trip, we found sales representatives to be aggressive in
offering HD DTH connections bundled with high end TV sets.
Festive season – a key contributor to annual sales. Festive quarter sales
historically make up ~30% of the DTH operators’ full year gross additions and
are crucial in setting the tone for their full year subs acquisition. We see some
downside risk to our current 0.8m subs addition forecast for 2Q but would wait
until after the festive quarter before re-assessing our full year target of 3.5m
subs addition.
Dish TV 2Q expectations. We expect Dish TV to report 2Q revenue of
Rs4.9bn, with margins of 28% and net loss of Rs30m. Our subs addition
forecast of 0.80m has some downside risks that are already well known to the
market, and we expect a modest 1% QoQ improvement in ARPU to Rs151.
Earnings and target price revision
No change.
Price catalyst
12-month price target: Rs95.00 based on a DCF methodology.
Catalyst: Festive season turnout.
Action and recommendation
Reiterate OP.
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