Description
Statements in this Management Discussion and Analysis of the Company describing the Company’s objectives,expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations.
48
MANAGEMENT DISCUSSION AND ANALYSIS
Forward Looking Statements
Statements in this Management Discussion and Analysis
of the Company describing the Company’s objectives,
expectations or predictions may be forward looking
within the meaning of applicable securities laws and
regulations. Forward looking statements are based on
certain assumptions and expectations of future events.
The Company cannot guarantee that these assumptions
and expectations are accurate or will be realised. The
Company assumes no responsibility to publicly amend,
modify or revise forward-looking statements, on the
basis of any subsequent developments, information or
events. Thus the Company’s actual performance/results
could differ from the projected estimates in the forward-
looking statements.
The following discussions on our financial condition and
result of operations should be read together with our
audited consolidated financial statements and the notes
to these statements included in the Annual Report.
Overview
The year gone by has been the most opportunistic and
challenging for the Digital Broadcast Industry. The
mandate of digitization set open a gigantic market of
analog users waiting to get digitized across Top 42 cities.
Aggressive play by digital cable systems was witnessed
wherein DTH clearly went on establishing itself as the
most preferred choice for digital viewing of pay television
content. Out of the approximately 60 Million installed
base of digital connections, substantial number of
connections have become part of the DTH category.
Dish TV’s strategy was encompassed keeping in mind these
challenges as well as maximizing the opportunity for DTH
presented by the DAS mandate of the Government of India.
Your Company continued to be in the forefront of digitization
achieving a substantial part of the DTH subscribers in the
Phase I digitization markets of Delhi, Kolkata, Chennai and
Mumbai. Our strategy has been to deliver sensible growth
with long term profitability as the ultimate objective. We
have been able to achieve our objective of sustainable
growth through sustained consumer delight based on
better offerings - product as well as services. It has been
our endeavor to maximize consumer value proposition
thereby leading to better acquisitions as well as earnings.
Your Company continued to lead the way in innovation by
launching India’s first Standard Definition Recorder at an
affordable price to the consumer. This Standard Definition
Recorder is a unique product which brings the benefit of
recording to the mass consumers for the first time and
was enthusiastically lapped up by the consumers.
During the year under review your Company also took the
initiative to roll out its service network Pan India from a
presence in around 200 cities earlier. This move represents
significant steps by the Company in putting the customer
first and will dramatically improve our service quality
across all pop strata and across income groups.
Your Company continues to expand its distribution
footprint and now reaches over a 1,00,000 outlets for
Set Top Boxes and the customers can recharge from
over 25,000 outlets nationally. In keeping pace with the
changing technological trends, your Company has made
available payment solution for recharge through the
Interbank Mobile Payment Service (IMPS). This will allow
customers to easily recharge their subscription using
a simple mobile phone. We continue to work to expand
the availability of recharge facilities for our customers
both directly and through third parties so that our
customers have recharge facilities available anytime and
anywhere. We continue to believe that continuous process
improvement, better technology, focus on end-to-end
customer experience management and evolving exclusive
techniques to combat intense competition will continue to
drive the Company towards new heights and glory.
SWOT ANALYSIS
Strengths
The legacy of the brand coupled with the heritage, lead
in technology and innovation through Dish+, India’s first
SD Box with recorder has helped brand proliferation and
adoption of recording in many Indian households. Wide
– spread availability of product across the length and
breadth of the country, maximum number of channels
and services offering in Standard Definition, cutting
edge satellite technology with dedicated satellite for
HD services has paved the way for addition of new HD
channels .The increase in bandwidth by the Company has
fueled addition of new channels thereby strengthening
channel offerings. Dish TV today is the undisputed leader
in content offering and satellite technology with state of
the art broadcast facility which is future ready.
With enhanced call centre support, our Company is
a benchmark in query resolution and providing great
consumer experience. With multi lingual support to cater
to linguistic masses it has improved customer relations
and brought delight.
As a path breaking measure, the launch of Dish+ made
the competition sit up and take notice of this significant
product and technology. For the first time ever this
Standard Definition Set Top Box with recording facility
was provided without any additional cost. The viewers
immediately adopted the recording feature and the
unlimited recording feature served as a boon for the
Company. This was a significant competitive advantage
which the Company enjoyed.
49
The sustained efforts of the Company to increase the
dealer and distributor count resulted in an increase in
their total numbers. The increased count has lead to
more accessibility and provided a momentum amongst
trade community. The trade partner network comprising
of dealers, distributors, installers, Service Franchisees,
Dish Shoppe’s, Dish Care Centers, modern trade, chain
stores and e-stores are spread all across the country to
cater to the increasing consumer demands.
Weakness
The growth in the category has been impacted by
increasing number of de-active consumers. This has led
to a marginal increase in the net additions of consumers
which is below the Industry expectations. Due to the
impact of digitization the cable operators have been able
to seed in the boxes with ease leading to easy conversion
of cable connections to digital cable connections.
With the pack pricing across the category normalizing
itself, there is not much scope to create packaging
differentiation. This was a big impediment which made it
difficult to provide any value for money hook on the basis
of which the brand can positively leverage itself.
Opportunities
After the successful completion of digitization in Phase
1, it has led to a myriad of possibilities. The biggest
one would be the exposure of imperfections in the
cable Industry. The Industry due to its nature of not
being organized is slowly going to deliver bad customer
experiences be it the billing system, service deliveries
or call centre experiences. Since it is going to take time
for cable fraternity to put their act together there lies an
opportunity to inform consumers about the impeccable
experience which a DTH can deliver.
The ongoing digitization also represents a shift in
consumer attitude and focus. Since they have become
more discerning, the likelihood of adopting modern and
convenient technology like DTH is highly probable.
Opportunity also lied in acquiring quality consumers
who made a difference to the bottom line. Not only
their contribution to ARPU was significant but they also
increased brand loyalty.
The positive disposition of the government towards the
Industry was a positive sign and it helped in fast access
devoid of any drastic decisions.
The emergence of Recorder as a category across major
cities was a big event of the year. It also saw the initiation
of consumers to the recording phenomena. All the
major sporting events and movies were archived by the
consumers and watched over and over again.
Threats
Intense competition from other DTH players as well
as digital cable and compulsory digitization leading to
diminishing market potential poses a likely threat to the
Industry as a whole. Easy access of cable into homes as
a measure to seed in the digital cable boxes easily vis-
à-vis an intense logistically driven exercise for DTH is
also a potential threat. High incidence of taxation and
regulatory intervention will continue restricting the
growth and profitability of the DTH sector.
Strategy
The year gone by has been the most opportunistic and
challenging for the Digital Broadcast Industry. The mandate
of digitization set open a gigantic market of analog users
waiting to get digitized across top 42 cities. Aggressive
play by digital cable systems was witnessed wherein DTH
clearly went on establishing itself as the most preferred
choice for digital viewing of pay television content.
Dish TV strategy was encompassed keeping in mind
these challenges as well as maximizing the opportunity
for DTH presented by the Digital Addressable System
(DAS) mandate of the Government of India. To spear head
the DTH advantage, Dish TV with a well crafted insight,
re-positioned the brand in the space of passion for
entertainment, tapping into consumers who are passionate
about their dose of entertainment and establish Dish TV as
an endpoint for all TV entertainment needs.
With consumers seeking maximum value for their money,
the Company brought forth unparalleled offerings in form
of lucrative entry offers, schemes like 70+ channels free
for Lifetime, cash back offers to ensure best competitive
advantage. Carrying forward the spirit of innovation and
leadership, Dish TV unveiled its Standard Definition Box
with Recorder, thus redefining the recorder category.
The Company with focused enhancements in the
pillars of Content, Service and Technology continued to
gain significant edge from the competition. To ensure
maximum coverage and visibility around the digitization
wave, incremental investments were made on ground
and in – shops. Dish TV carried expansion in service
infrastructure across India to cater to the massive
demand and providing quick service support to the
customers. The Company upgraded to new CRM system
to establish seamless service delivery.
With a robust sales and distribution network, Dish TV
ensured strong foothold in retail outlets combined with
an All India Service Network. In a service driven Industry,
it is also pivotal for a Company to enhance the existing
50
subscriber experience by constantly designing offering
to match their dynamic needs. The strategy was to
position Dish TV as a service led brand with the objective
of meeting customer delight. Within this endeavor,
the Company introduced an exclusive Dish delight
programme to recognize our valuable subscriber base
and benefit them with unique privileges such as Free
relocation, Free upgrade, Express queue etc.
Your Company will look for growth in terms of value
per customer, innovative technology driven offerings,
harnessing the opportunity of convergence and create
value for all the stakeholders.
Key Performance Indicators
In view of intense competition in the DTH segment and a
competitive pricing environment - providing subsidy on
the DTH hardware, brand building, penetration in the rural
market and up-gradation of the existing subscribers to
the higher value packs drew the management attention
all throughout the year. EBITDA margin continued to
surge upwards during the year. Customer Care, service
quality, expansion of Service Franchisee and Dish
Care Centres also remained the focal for retaining and
servicing the customers.
During the year key highlights of operational performance
were as under:
• Gross subscriber base stood at 15.1 Million on
March 31, 2013;
• Operating Revenue for FY 13 stood at ` 2166.8 Cr;
• EBITDA for FY 13 stood at ` 579.5 Cr;
• Total Number of Channels & Services 325, being
the highest in the category;
• Total number of HD service stood at 42, once again
the Highest in the category;
• ARPU for FY 13 stood at ` 158
Risk Management and Internal Control
Your Company believes that risk management and internal
control are fundamental to effective Corporate Governance
and the development of a sustainable business. Dish TV
has a robust process to identify key risks and prioritize
relevant action plans that can mitigate these risks.
Dish TV’s philosophy towards control systems is mindful
of leveraging resources towards optimization while
ensuring the protection of its assets. The Company
maintains insurance for its assets which provides cover for
damage caused by fire, import, transport perils etc. Your
Company deploys a robust system of internal controls that
facilitates proper authorization of financial transactions,
accurate and timely compilation of financial statements
and management reports and ensures regulatory and
statutory compliance and safeguards investors’ interest
by ensuring highest level of governance.
Internal control systems are continuously monitored
by the Internal Auditors and are also periodically
reviewed by the management for not only checking
any deviation or departure from the policies laid down
across various business processes but also for further
upgradation and modifications suited to the prevalent
changes in the Industry. The Company also endeavors to
minimize the effect of fluctuation in forex rate, interest
rate, commodity purchases by entering into long term
contracts and adopting prudent commercial practices.
The Company has ventured in business continuity plans
and disaster recovery initiatives in order to ensure
continuity with normal operations and seamless service
to its customers under most circumstances.
Readers are cautioned that the risk related information
outlined here is not exhaustive and is for information
purpose only.
Talent Management
With the expansion of the Industry and the upsurge in
the DTH market as a whole, people have increasingly
emerged as a strategic driver of the Company’s
business. Over the last years, people policies and people
management framework have been aligned to serve the
larger business goals of the Company.
Long term development of human capital and strategic
employment of retention tools remained at the core of the
Company’s strategy. The Company has young and vibrant
team of highly qualified professionals at all levels
Significant emphasis is also laid on enhancing managerial
and leadership qualities at senior management level
to propel the Company towards stronger and more
sustainable growth. The Company has paid focused
attention on management of available resources by training,
re – training, incentivizing and a fair policy of promotion,
transfer and equal pay for equal work. The Company aims
to continue to nurture the talent management process of
the Company which is the quintessential to continue with
the exponential growth of the Company.
Cautionary Statement
Statements in the Management Discussion and Analysis
describing the Company’s objectives, projections,
estimate, expectations may constitute a “forward-
looking statement” within the meaning of applicable
securities laws and regulations. Actual results could
differ materially from those expressed or implied.
Important factors that could make a difference to the
Company’s operations include economic conditions
affecting demand/ supply and price conditions in the
domestic markets in which the Company operates,
changes in the Government Regulations, Tax Laws and
other Statutes and other incidental factors.
doc_324664506.pdf
Statements in this Management Discussion and Analysis of the Company describing the Company’s objectives,expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations.
48
MANAGEMENT DISCUSSION AND ANALYSIS
Forward Looking Statements
Statements in this Management Discussion and Analysis
of the Company describing the Company’s objectives,
expectations or predictions may be forward looking
within the meaning of applicable securities laws and
regulations. Forward looking statements are based on
certain assumptions and expectations of future events.
The Company cannot guarantee that these assumptions
and expectations are accurate or will be realised. The
Company assumes no responsibility to publicly amend,
modify or revise forward-looking statements, on the
basis of any subsequent developments, information or
events. Thus the Company’s actual performance/results
could differ from the projected estimates in the forward-
looking statements.
The following discussions on our financial condition and
result of operations should be read together with our
audited consolidated financial statements and the notes
to these statements included in the Annual Report.
Overview
The year gone by has been the most opportunistic and
challenging for the Digital Broadcast Industry. The
mandate of digitization set open a gigantic market of
analog users waiting to get digitized across Top 42 cities.
Aggressive play by digital cable systems was witnessed
wherein DTH clearly went on establishing itself as the
most preferred choice for digital viewing of pay television
content. Out of the approximately 60 Million installed
base of digital connections, substantial number of
connections have become part of the DTH category.
Dish TV’s strategy was encompassed keeping in mind these
challenges as well as maximizing the opportunity for DTH
presented by the DAS mandate of the Government of India.
Your Company continued to be in the forefront of digitization
achieving a substantial part of the DTH subscribers in the
Phase I digitization markets of Delhi, Kolkata, Chennai and
Mumbai. Our strategy has been to deliver sensible growth
with long term profitability as the ultimate objective. We
have been able to achieve our objective of sustainable
growth through sustained consumer delight based on
better offerings - product as well as services. It has been
our endeavor to maximize consumer value proposition
thereby leading to better acquisitions as well as earnings.
Your Company continued to lead the way in innovation by
launching India’s first Standard Definition Recorder at an
affordable price to the consumer. This Standard Definition
Recorder is a unique product which brings the benefit of
recording to the mass consumers for the first time and
was enthusiastically lapped up by the consumers.
During the year under review your Company also took the
initiative to roll out its service network Pan India from a
presence in around 200 cities earlier. This move represents
significant steps by the Company in putting the customer
first and will dramatically improve our service quality
across all pop strata and across income groups.
Your Company continues to expand its distribution
footprint and now reaches over a 1,00,000 outlets for
Set Top Boxes and the customers can recharge from
over 25,000 outlets nationally. In keeping pace with the
changing technological trends, your Company has made
available payment solution for recharge through the
Interbank Mobile Payment Service (IMPS). This will allow
customers to easily recharge their subscription using
a simple mobile phone. We continue to work to expand
the availability of recharge facilities for our customers
both directly and through third parties so that our
customers have recharge facilities available anytime and
anywhere. We continue to believe that continuous process
improvement, better technology, focus on end-to-end
customer experience management and evolving exclusive
techniques to combat intense competition will continue to
drive the Company towards new heights and glory.
SWOT ANALYSIS
Strengths
The legacy of the brand coupled with the heritage, lead
in technology and innovation through Dish+, India’s first
SD Box with recorder has helped brand proliferation and
adoption of recording in many Indian households. Wide
– spread availability of product across the length and
breadth of the country, maximum number of channels
and services offering in Standard Definition, cutting
edge satellite technology with dedicated satellite for
HD services has paved the way for addition of new HD
channels .The increase in bandwidth by the Company has
fueled addition of new channels thereby strengthening
channel offerings. Dish TV today is the undisputed leader
in content offering and satellite technology with state of
the art broadcast facility which is future ready.
With enhanced call centre support, our Company is
a benchmark in query resolution and providing great
consumer experience. With multi lingual support to cater
to linguistic masses it has improved customer relations
and brought delight.
As a path breaking measure, the launch of Dish+ made
the competition sit up and take notice of this significant
product and technology. For the first time ever this
Standard Definition Set Top Box with recording facility
was provided without any additional cost. The viewers
immediately adopted the recording feature and the
unlimited recording feature served as a boon for the
Company. This was a significant competitive advantage
which the Company enjoyed.
49
The sustained efforts of the Company to increase the
dealer and distributor count resulted in an increase in
their total numbers. The increased count has lead to
more accessibility and provided a momentum amongst
trade community. The trade partner network comprising
of dealers, distributors, installers, Service Franchisees,
Dish Shoppe’s, Dish Care Centers, modern trade, chain
stores and e-stores are spread all across the country to
cater to the increasing consumer demands.
Weakness
The growth in the category has been impacted by
increasing number of de-active consumers. This has led
to a marginal increase in the net additions of consumers
which is below the Industry expectations. Due to the
impact of digitization the cable operators have been able
to seed in the boxes with ease leading to easy conversion
of cable connections to digital cable connections.
With the pack pricing across the category normalizing
itself, there is not much scope to create packaging
differentiation. This was a big impediment which made it
difficult to provide any value for money hook on the basis
of which the brand can positively leverage itself.
Opportunities
After the successful completion of digitization in Phase
1, it has led to a myriad of possibilities. The biggest
one would be the exposure of imperfections in the
cable Industry. The Industry due to its nature of not
being organized is slowly going to deliver bad customer
experiences be it the billing system, service deliveries
or call centre experiences. Since it is going to take time
for cable fraternity to put their act together there lies an
opportunity to inform consumers about the impeccable
experience which a DTH can deliver.
The ongoing digitization also represents a shift in
consumer attitude and focus. Since they have become
more discerning, the likelihood of adopting modern and
convenient technology like DTH is highly probable.
Opportunity also lied in acquiring quality consumers
who made a difference to the bottom line. Not only
their contribution to ARPU was significant but they also
increased brand loyalty.
The positive disposition of the government towards the
Industry was a positive sign and it helped in fast access
devoid of any drastic decisions.
The emergence of Recorder as a category across major
cities was a big event of the year. It also saw the initiation
of consumers to the recording phenomena. All the
major sporting events and movies were archived by the
consumers and watched over and over again.
Threats
Intense competition from other DTH players as well
as digital cable and compulsory digitization leading to
diminishing market potential poses a likely threat to the
Industry as a whole. Easy access of cable into homes as
a measure to seed in the digital cable boxes easily vis-
à-vis an intense logistically driven exercise for DTH is
also a potential threat. High incidence of taxation and
regulatory intervention will continue restricting the
growth and profitability of the DTH sector.
Strategy
The year gone by has been the most opportunistic and
challenging for the Digital Broadcast Industry. The mandate
of digitization set open a gigantic market of analog users
waiting to get digitized across top 42 cities. Aggressive
play by digital cable systems was witnessed wherein DTH
clearly went on establishing itself as the most preferred
choice for digital viewing of pay television content.
Dish TV strategy was encompassed keeping in mind
these challenges as well as maximizing the opportunity
for DTH presented by the Digital Addressable System
(DAS) mandate of the Government of India. To spear head
the DTH advantage, Dish TV with a well crafted insight,
re-positioned the brand in the space of passion for
entertainment, tapping into consumers who are passionate
about their dose of entertainment and establish Dish TV as
an endpoint for all TV entertainment needs.
With consumers seeking maximum value for their money,
the Company brought forth unparalleled offerings in form
of lucrative entry offers, schemes like 70+ channels free
for Lifetime, cash back offers to ensure best competitive
advantage. Carrying forward the spirit of innovation and
leadership, Dish TV unveiled its Standard Definition Box
with Recorder, thus redefining the recorder category.
The Company with focused enhancements in the
pillars of Content, Service and Technology continued to
gain significant edge from the competition. To ensure
maximum coverage and visibility around the digitization
wave, incremental investments were made on ground
and in – shops. Dish TV carried expansion in service
infrastructure across India to cater to the massive
demand and providing quick service support to the
customers. The Company upgraded to new CRM system
to establish seamless service delivery.
With a robust sales and distribution network, Dish TV
ensured strong foothold in retail outlets combined with
an All India Service Network. In a service driven Industry,
it is also pivotal for a Company to enhance the existing
50
subscriber experience by constantly designing offering
to match their dynamic needs. The strategy was to
position Dish TV as a service led brand with the objective
of meeting customer delight. Within this endeavor,
the Company introduced an exclusive Dish delight
programme to recognize our valuable subscriber base
and benefit them with unique privileges such as Free
relocation, Free upgrade, Express queue etc.
Your Company will look for growth in terms of value
per customer, innovative technology driven offerings,
harnessing the opportunity of convergence and create
value for all the stakeholders.
Key Performance Indicators
In view of intense competition in the DTH segment and a
competitive pricing environment - providing subsidy on
the DTH hardware, brand building, penetration in the rural
market and up-gradation of the existing subscribers to
the higher value packs drew the management attention
all throughout the year. EBITDA margin continued to
surge upwards during the year. Customer Care, service
quality, expansion of Service Franchisee and Dish
Care Centres also remained the focal for retaining and
servicing the customers.
During the year key highlights of operational performance
were as under:
• Gross subscriber base stood at 15.1 Million on
March 31, 2013;
• Operating Revenue for FY 13 stood at ` 2166.8 Cr;
• EBITDA for FY 13 stood at ` 579.5 Cr;
• Total Number of Channels & Services 325, being
the highest in the category;
• Total number of HD service stood at 42, once again
the Highest in the category;
• ARPU for FY 13 stood at ` 158
Risk Management and Internal Control
Your Company believes that risk management and internal
control are fundamental to effective Corporate Governance
and the development of a sustainable business. Dish TV
has a robust process to identify key risks and prioritize
relevant action plans that can mitigate these risks.
Dish TV’s philosophy towards control systems is mindful
of leveraging resources towards optimization while
ensuring the protection of its assets. The Company
maintains insurance for its assets which provides cover for
damage caused by fire, import, transport perils etc. Your
Company deploys a robust system of internal controls that
facilitates proper authorization of financial transactions,
accurate and timely compilation of financial statements
and management reports and ensures regulatory and
statutory compliance and safeguards investors’ interest
by ensuring highest level of governance.
Internal control systems are continuously monitored
by the Internal Auditors and are also periodically
reviewed by the management for not only checking
any deviation or departure from the policies laid down
across various business processes but also for further
upgradation and modifications suited to the prevalent
changes in the Industry. The Company also endeavors to
minimize the effect of fluctuation in forex rate, interest
rate, commodity purchases by entering into long term
contracts and adopting prudent commercial practices.
The Company has ventured in business continuity plans
and disaster recovery initiatives in order to ensure
continuity with normal operations and seamless service
to its customers under most circumstances.
Readers are cautioned that the risk related information
outlined here is not exhaustive and is for information
purpose only.
Talent Management
With the expansion of the Industry and the upsurge in
the DTH market as a whole, people have increasingly
emerged as a strategic driver of the Company’s
business. Over the last years, people policies and people
management framework have been aligned to serve the
larger business goals of the Company.
Long term development of human capital and strategic
employment of retention tools remained at the core of the
Company’s strategy. The Company has young and vibrant
team of highly qualified professionals at all levels
Significant emphasis is also laid on enhancing managerial
and leadership qualities at senior management level
to propel the Company towards stronger and more
sustainable growth. The Company has paid focused
attention on management of available resources by training,
re – training, incentivizing and a fair policy of promotion,
transfer and equal pay for equal work. The Company aims
to continue to nurture the talent management process of
the Company which is the quintessential to continue with
the exponential growth of the Company.
Cautionary Statement
Statements in the Management Discussion and Analysis
describing the Company’s objectives, projections,
estimate, expectations may constitute a “forward-
looking statement” within the meaning of applicable
securities laws and regulations. Actual results could
differ materially from those expressed or implied.
Important factors that could make a difference to the
Company’s operations include economic conditions
affecting demand/ supply and price conditions in the
domestic markets in which the Company operates,
changes in the Government Regulations, Tax Laws and
other Statutes and other incidental factors.
doc_324664506.pdf