Cable TV
Siti relooks at broadband as cable subscription drove revenues in FY18
BENGALURU: In FY 2017 (fiscal or year ended 31 March 2017, previous year), the Essel Group’s Siti Networks Ltd (Siti) was all gung-ho about broadband. In its annual report for fiscal 2017, the company said that it had become the largest multi-system operator (MSO) and a leading wired broadband services provider. The tone of the company’s 2017 annual report showed that Siti was fired up by the doubling of broadband revenue in FY 2017 as compared to FY 2016 to Rs 97 crore (about 8 per cent of total revenue for fiscal 2017) from Rs 48.6 crore (about 4 per cent of total revenue for fiscal 2016). The company’s broadband operations added 7.2 lakh home passes during the year taking the total footprint to 16.1 lakh homes. Broadband customer base grew to 2.28 lakh by Q4 2017 exit, up 73 per cent year-on-year (y-o-y). Further, Siti said in its FY 2017 annual report that it planned to channelise more capital to its broadband division, which it then felt was a highly scalable opportunity.
Cut to FY 2018 and the story has changed. Siti’s broadband operations with a total footprint of 16.8 lakh homes had a base of 2.5 lakh customers. Siti added just about 22,000 broadband subscribers in fiscal 2018, and y-o-y broadband revenues grew by only 4 per cent to Rs 101 crore in FY 2018.The company said that it was working on building a growth strategy in the sector.
Quoting from its fiscal 2018 Annual report:
“We are also looking closely at better and centralised inventory controls, besides identifying unsustainable locations running on IP bandwidth with the objective of phasing them out. We also aim to focus more aggressively on high definition (HD) penetration, broadband expansion, and improving monetisation in digital addressable system (DAS) phase III and IV areas.”
At another place in the 2018 annual report Siti states:
“In broadband, your company is looking to deepen its penetration levels in its existing markets to better utilise existing capital expenditure incurred. Going forward, we are also looking to arrive at an ideal business model that will allow us to grow profitably and sustainably in this segment, especially considering the disruptive pricing environment prevalent in mobile internet currently and the entry on new entities in wired broadband.”
It must be noted that broadband contributed to just about 8 percent and 7 percent to Siti’s revenues in FY 2017 and FY 2018 respectively. Cable business is and has been the major revenue earner for Siti.
While its broadband business has not met with Siti’s expectations, its cable business and more so subscription revenue has been the revenue growth driver. Cable subscription (Video) revenue in FY 2017 grew 39 per cent to Rs 569 crore as compared to Rs 410.2 crore in FY 2016. Siti’s cable subscription revenue grew 41 per cent in fiscal 2018 to Rs 799.7 crore as compared to the previous year. Carriage revenue, which had grown by 17 per cent in FY 2017 to Rs 300.1 crore from Rs 256.8 crore was almost stagnant in terms of growth in FY 2018. It grew by about 1.3 per cent to about Rs 303.8 crore in fiscal 2018. Siti’s activation revenue has also been almost constant and will taper off once its entire subscriber base has been digitised, since this is generally a one-time revenue. Activation revenue in FY-2016 was Rs 170.6 crore, it was Rs 170.1 crore in FY 2017 and was Rs 175 crore in FY 2018. Advertisement revenue had declined in FY 2017 to Rs 13.5 crore from Rs 32 crore in FY 2016 has increased in FY 2018 to Rs 18.5 crore.
Siti has yet to report profit after tax and reward its shareholders with dividends. But, the good thing is that Siti’s operating profits (EBITDA) without activation revenue have grown 2.6 times in FY 2018 to Rs 150.7 crore from Rs 58.6 crore. Overall EBITDA including activation has grown 41.9 per cent in FY 2018 to Rs 324.5 crore from Rs 241.2 crore in the previous year.
All numbers in this report are consolidated unless stated otherwise.
Siti’s position with regards to broadband is more of a norm rather than an exception. Many other MSOs’ and LCOs’ that have also been providing broadband internet services have had muted numbers from this business stream in FY 2018 as compared to the previous year. This implies either a slow growth or even de-growth of subscriber numbers, reduced ARPUs’ or even both.
Mukesh Dhirubhai Ambani’s Reliance Jio Infocomm Ltd (Jio) has been the biggest disrupter that has got both wireless and wireline internet service providers struggling to match up. With its plans to start FTTH wired internet services, with strategies that many in the industry term as ‘predatory’, it is likely to make the ground difficult to sustain and grow for incumbents.
MUMBAI: When margins wobble, liquidity talks and in Q3 FY25-26, cash did most of the talking. Den Networks Limited closed the December quarter with consolidated revenue of Rs.251 crore, marginally higher than the previous quarter but down 4 per cent year-on-year, even as profitability stayed resilient on the back of strong cash reserves and disciplined cost control.
Subscription income softened to Rs.98 crore, slipping 3 per cent sequentially and 14 per cent from last year, while placement and marketing income offered some cheer, rising 15 per cent quarter-on-quarter to Rs.148 crore. Total costs climbed faster than revenue, up 7 per cent QoQ to Rs.238 crore, driven largely by higher content costs and operating expenses. As a result, EBITDA dropped sharply to Rs.13 crore from Rs.19 crore in Q2 and Rs.28 crore a year ago, pulling margins down to 5 per cent.
Yet, the bottom line refused to blink. Profit after tax stood at Rs.40 crore, up 15 per cent sequentially and only marginally lower than last year’s Rs.42 crore. A healthy Rs.57 crore in other income helped cushion operating pressure, keeping profit before tax at Rs.48 crore, broadly stable quarter-on-quarter despite the tougher cost environment.
The real headline-grabber, however, sits on the balance sheet. The company remains debt-free, with cash and cash equivalents swelling to Rs.3,279 crore as of December 31, 2025. Net worth rose to Rs.3,748 crore, while online collections accounted for 97 per cent of total receipts, underscoring strong cash discipline across operations, including subsidiaries.
In short, while Q3 showed signs of operating strain, the financial backbone remains solid. With zero gross debt, steady profits and a formidable cash war chest, the company enters the next quarter with flexibility firmly on its side proving that in uncertain markets, balance sheet strength can be the best growth strategy.
