Den Networks Confident Of Growth Despite Tariff Pressures

Den Networks Ltd. is confident its broadband services can compete with peers, despite the tariff pressures introduced by Reliance Jio Infocomm Ltd., said the company's Chief Executive Officer SN Sharma.

Tariff pressures wouldn’t hurt Den Networks’ growth. The cable TV and broadband services provider will be operating in a competitive average-revenue-per-user range of Rs 550 for 50 mbps for unlimited data, he told BloombergQuint. He also expects the cable business to grow significantly over the next three years.

The cable set-top-box segment is also slated to grow as installations in the deep rural tier-IV areas continue. The ARPU in tier-III or the semi-rural areas are also expected to jump to Rs 144 from Rs 76 in less than three years, he said.

Watch the full conversation here:

Here are the key highlights from the conversation:

Set To Box Operations’ Expansion

• Phase-III of digitisation (in semi-rural areas) is over, certain portions of phase-IV are yet to be completed which may take another 6-8 months to finish.
• Ceded a total of 5 million standard definition boxes last year to high definition.

ARPU For Cable Business

• Average revenue per user in tier-I cities up to Rs 144; Rs 112 in tier-II cities.
• Fifty percent cable subscription revenue collected from tier-I cities; ARPU in tier-III cities at Rs 76. Aiming to take this to Rs 144 in the next two and a half years.
• Need to convert 10 percent of all subscribers to HD; still more headroom to increase subscription level. HD conversion to add revenue of Rs 60-70 per box.
• See growth range of 10-12 percent in content inflation.

On Broadband

• See huge growth potential for company in wireline broadband; have invested close to Rs 2,500 crore in cable and digital cables.
• Entire network of Den is fibrised; have association of 14,000 franchise cable operators.
• Will be covering 100 cities in 12-18 months for wired broadband. Wiring for broadband services will be completed in 3-4 years.
• Will be operating in an ARPU range of Rs 550 per month.
• Have a total of 2 lakh subscribers; plan to increase subscriber base by another 6 lakh and have a customer base of 8 lakhs in the next three years.