Hathway Plans to Seed 2.5 Lakh HD Set Top Boxes

HD Set Top Boxes

Broadband and cable TV service provider Hathway Cable and Datacom are planning a Capex of Rs 310 crore in FY19. The company had deployed a similar Capex in FY18. The company is also getting aggressive on high definition (HD) set-top box (STB) deployment. It plans to seed 2.5 lakh HD STBs in FY19.

In FY18, the company had spent Rs 225 crore on broadband business and Rs 85 crore on the cable TV business. The intention is to spend a similar amount on the two businesses in FY19.

“In FY18, we spent around Rs. 225 crores in broadband capex and around Rs. 85 crores in video business capex. We intend to spend similar capex in FY2019 as well. In terms of addition of consumers, we have seen good momentum so we are confident that this momentum will continue in FY2019 as well,” Hathway Cable and Datacom MD Rajan Gupta told analysts during an earnings call.

The company had 7.2 million cable TV subscribers at the end of March 2018 including 2.16 lakh HD subscribers. The broadband subscriber base was 0.8 million.

He also said that the company’s cable TV expansion is focussed on four key markets Maharastra/Mumbai, Karnataka/Bengaluru, Hyderabad, and West Bengal.

“Hathway is a leader in these markets, therefore, we will expand in these areas whenever we do that. Hathway has always been a metro player or player in key markets,” he noted.

The company is looking to acquire customers of MSOs who are likely to collapse due to their inability to implement the Telecom Regulatory Authority of India’s (TRAI) tariff order and regulations.

“Essentially, a lot of the MSOs are collapsing and we end up acquiring their consumers. That process has started in a very, very small way. I think these are very early days. Obviously, new guidelines have not been implemented. But whenever the new guideline is implemented, there will be a scope for bigger MSOs to increase their market share,” Gupta stated.

Gupta also said that the subscription revenue growth in FY19 will depend on three things – the increase in average revenue per user (ARPU), HD STB seeding, and gain in market share.

Hathway’s STB deployment includes replacement of old STBs, seeding new STBs to gain market share from smaller MSOs, and seeding HD STBs. Currently, Hathway gets an additional Rs. 60 per month per subscriber on HD subscriptions.

Gupta revealed that the company has closed content deals with broadcasters for FY19. The net increase in content cost for FY19 will be Rs. 40 crore, however, there will be no increase in content cost for two to three large broadcasters, he added.

In terms of ARPU growth, Gupta said that the Phase I and Phase II ARPU is expected to increase by 5% to 8% while Phase III and Phase IV ARPU increase will be in the range of 15%-20%.

He further stated that the company has increased its channel offering in some of these Phase III-IV markets to 400 from the 200 earlier. “Now we have increased the link capacity and we are giving up to 400 channels in these markets. With the increase in channels and improvement in picture quality, the LCOs are able to demand more from consumers and in turn share more with us,” he added.

Related posts