DEN aims to convert 10% of its SD subs base to HD in 12 months

DEN Networks CEO SN Sharma has set an ambitious target of converting 10% of its cable TV universe to high definition (HD) from standard definition (SD) in the next 12 months.

As on 31 March, DEN had 7.4 million paid digital subscribers apart from 1 million paid subscribers of its associates. It has 1 lakh+ HD subscribers.

“Over the next 12 months, we aim to convert 10% of our SD base to HD,” Sharma told analysts during a conference call.

He further noted that the price of HD set top boxes (STBs) have seen a decline from Rs 4,000-5,000 to Rs 1,500-1,600 which should help in increasing HD penetration.

Sharma said that the growth in HD subscribers will bring in the moolah for the company.

DEN Networks CFO Himanshu Jindal said that the company’s FY18 Capex was Rs.138 crore of which Rs.12 to 14 crore was spent on broadband. On HD STB seeding, Jindal said that the company will recover the investment immediately from the customer.

DEN has locked in content deals with most broadcasters with the increase being less than 15%. The MSO’s content deals are valid till April 2019 barring Star which will come up for renewal in nine months by January. It has also resolved its dispute with ZEEL.

“All these deals have been signed up and are firmly in the place. The content cost increase is in the range of less than 15%,” Sharma said.

He also said that all the deals will come up for renewal next year as Sony and IndiaCast deals which were for two years will also expire in March 2019. Star and Zee are now signing only one-year deals.

“So as of now our content deals are all frozen till March and April next year. By then all of them become due for renewal,” he noted.

The deals with broadcasters are consolidated and include both standard definition (SD) and HD channels.

DEN is replenishing its old set top boxes (STBs) that go out of warranty. These are then being used in some nominal expansion in Phase 4 areas where the ARPUs levels are pretty low. DEN has an inventory of 100,000 STBs.

Sharma said that the tie-up with BARC India for return path data (RPD) will be leveraged for better consumer experience.

DEN will be rolling out broadband covering 10 states and 100 cities. In Q1, the company plans to enable 15 towns. Sharma said that the local cable operators (LCOs) are approaching the company to launch the broadband service. The company has a broadband subscriber base of 1,07,000.