Tata sky total loss Rs.1100 cr Vs dishtv 300 cr

[saurabh_g]

Dish TV and Tata Sky, the country’s two direct-to-home (DTH) companies, are expected to post losses in excess of Rs 1,400 crore for 2007-08 in their quest to expand the market by offering set-top boxes at subsidised rates.

The companies have over five million subscriber homes across the country collectively.

With three players all set to enter the DTH sector this year (with new technology offerings), the companies expect losses to go up further this financial year. Big TV (Reliance ADAG), Bharti and Sun Direct will bring in MPEG 4 set-top boxes, which provide higher quality pictures.

“Dish TV, the largest DTH company, is expected to incur a loss of Rs 300-350 crore, while Tata Sky is set to post Rs 1,100 crore-plus loss,” industry sources said. Tata Sky, however, declined to comment on its financials and projections.
At present, DTH companies incur a loss of Rs 1,600-2,300 on each new subscriber they acquire, which includes the cost of the MPEG 2 set-top box and other hardware and installation costs.

However, with new players offering MPEG 4 boxes, the subsidy will go up even further and the loss for acquiring new customers will rise by at least 30 per cent.

The problem might get even more complicated as existing players might have to upgrade their old boxes to the new technology in order to guard against the churn of customers. This will obviously impact their bottom line.

For consumers, more DTH service providers will mean cheaper DTH connections with more value-added services.

“The financial burden of all the new DTH entrants will go up drastically as they will have to offer more value-added services at possibly lower price-points than at present,” Smita Jha, associate director, PricewaterhouseCoopers, told Business Standard.

The industry expects the DTH market to hit the 10 million subscriber base mark by the end of this financial year. According to experts, DTH players will take five to six years to break even.

However, aware of financial loss projections, both Big TV and Bharti are expected to bundle a number of value-added services such as movie-on-demand, games, internet and telephony.

“Our daily loss should be to the tune of Rs 80-90 lakh, much lower than the competitor and all the new DTH players that will enter this space. When a DTH company gets about 7-8 million subscribers, these losses will start to fade away as the average revenue per user will increase,” Jawahar Goel, managing director, Dish TV, told Business Standard.

Tata Sky will soon cross the 2-million DTH subscriber mark, while its rival Dish TV recently went past the 3 million user mark. For 2008-09, analysts project a DTH customer base in access of 8 million.

“Apart from the subsidy on MPEG 4 DTH boxes, there are other costs, including the cost of content, taxes, advertising and marketing expenses, which will further the losses for new DTH companies this year,” an industry analyst said.

 

[amish]

i dont really think they offer STBs at subsidized rates. Just other day Tata Sky reduced price to 1500Rs saying they are passing the benefit to customer.And 2nd my cable op is offering STBs at 1500Rs. Now he is not so rich that he can offer STBs at subsidised rates. Infact I feel he must be making few hundreds in that too.So if he can offer STB at 1500, how can TS be making loss when they purchase STBs in bulks and bulks. Much much higher quantity than my cable op.

 

[Sir_Ambatan]

i dont really think they offer STBs at subsidized rates. Just other day Tata Sky reduced price to 1500Rs saying they are passing the benefit to customer.

And 2nd my cable op is offering STBs at 1500Rs. Now he is not so rich that he can offer STBs at subsidised rates. Infact I feel he must be making few hundreds in that too.

So if he can offer STB at 1500, how can TS be making loss when they purchase STBs in bulks and bulks. Much much higher quantity than my cable op.

They aren't giving anything at subsidised rate. In outside market we can get stbs for Rs.400. Good quality stbs cost Rs.600. They just fool the govt to get tax benifits. Auditors are there for that. If they really make Rs 1,100 crore-plus loss even after getting nearly 2 million susbcribers then it means they don't have a bright future. Don't understand still how much more they expect

Now TS can say

We are No.1 Loss making dth service,Our company itself now jingalala :yahoo:

 

[amish]

Govt knows all these too. but we common man are REALLY slaves. we all work hard for living and then plus PAY TAX. these guys make ALL MONEY show loss and pocket 200-300cr tax

 

[gregory house]

Companies and businesses have OnePlus point which ordinary tax payers don't - depreciation. Companies that make huge investments in plant and machinery sometimes have book profits but income tax losses - because depreciation rates under Companies Act and Income Tax Act are different (higher in the second case). Reliance Industries is a major example. In fact the idea of MAT (Minimum Alternate Tax) - a form of tax on book profits - is rumored to have been brought in specifically to target Reliance which used to have huge book profits but losses as per income tax act.It is not a fraud per se, just an effect of the way different laws work. Have to see what losses the report refers to - book losses or losses as per income tax returns. There is a big difference there.

 

[sushil_sh]

Hey all people , pls read the full article correctly . The loss is not the real , but the expected , if the govt tell them to REPLACE the olde mpeg2 enabled STBS with the new technology mpeg4 compatible STBs . But it is not going to happen so this is IRRElevent to suppose that they are facing loss ... It is expected if Trai asks old DTH players to do so . But it is not proposed by TRAi , instead use of a digital transcoder , an add on device to old stb to make them compatible with mpeg4 stream , is under consideration by TRAI nd BIS. So dont think that they r in loss for older stb (mpeg2 enabled ) . This is only expected loss if they are made to replace older with the newer OK GUYS !

 

[tech_enthu]

I think TRAI has made it clear that only new connections after a period of six months have to comply and supply mpeg4 stbs. Existing ones need not be replaced.

Hey all people , pls read the full article correctly . The loss is not the real , but the expected , if the govt tell them to REPLACE the olde mpeg2 enabled STBS with the new technology mpeg4 compatible STBs . But it is not going to happen so this is IRRElevent to suppose that they are facing loss ... It is expected if Trai asks old DTH players to do so . But it is not proposed by TRAi , instead use of a digital transcoder , an add on device to old stb to make them compatible with mpeg4 stream , is under consideration by TRAI nd BIS. So dont think that they r in loss for older stb (mpeg2 enabled ) . This is only expected loss if they are made to replace older with the newer OK GUYS !