Key highlights:-

On Q-o-Q basis, for the quarter ended December 2013, operating revenues grew 7% at Rs 234.78 crore. OPM declined by 179 bps at 15.6%. The loss at net profit level decreased by 17% to Rs 36.86 crore due to forex gain.

On Y-o-Y basis, for the quarter ended December 2013, operating revenues grew 52% at Rs 234.78 crore. Subscription revenues grew 287% to Rs 119 crore while placement revenues rose 53% to Rs 73.6 crore. The subscription revenues includes incentives from business partners and pass through content revenues (contracts are centralised now).Excluding these, recurring subscription revenues grew 154% to Rs 78 crore. Broadband revenues grew 11% to Rs 36.6 crore. Activation income was at Rs 2.5 crore. OPM declined by 732 bps at 15.6%. The loss at net profit level increased by 397% to Rs 36.86 crore due to fall in margin and rise in interest cost & deprecation cost.

The company has deployed 0.1 mn STBs during the quarter. Cumulatively, the company now has 7.7 mn active digital Subscribers. Total subscriber base (including analog) stands at 11 mn. It has deployed 2.5 mn STBs in Phase I and 4.3 mm in Phase II, at an estimated market share of ~25%.

Digital subscriber base was flattish at 7.7 mn , constitutes 67% of the total subscriber universe (~11m).

In Q3, the company has started collecting Net ARPU of Rs 85 per subscriber from LCO based on Mid package of Rs 220 per month, from the full 2.45 mn subscriber base of Phase I metro cities under the net billing system.

Currently Cable ARPU stands at Rs 170 -180 per month. With the implementation of packages for phase I & A-La-Carte rates of individual channels, digital ARPU are set to witness an average rate of Rs 200 - 220 per month. Going forward, the company is likely to leverage its digitized subs base by offering bundled combo packages of cable + Broadband with high speed frequency to its customers at attractive prices of Rs 600 per month to boost its revenues.

On the collections front, the mgmt said cash collections have increased 70% YoY and are expected to grow further with the implementation of gross billing during Q4 in various Phase I cities. It added that an acknowledgement from local cable operators regarding billing the customer would be undertaken and audits would be carried out to check if the customer has indeed received the bill. Billing would be done in a manner wherein gross revenue will be recognized as income while LCOs share would be shown as an expense.

The company has aggressively implemented the gross billing system (raising the bills with entertainment + service tax) on LCOs from Jan. 2014 in Delhi and intends to raise the same in Mumbai in Feb. 2014 followed by Kolkata in April. 2014.

The company completed customer acquisition form (CAF) collections in all markets but Hyderabad. In Bengaluru, a key market, mass switch-offs of STBs had to be carried out due to the non-submission of CAFs. The company received ~150,000 CAFs in the next couple of days. It is expected to offer over 150 pay channels in Bengaluru and is confident on winning back lost customers.

Broadband revenues grew 12%. Gross additions to the broadband subscriber base was 27000 for the quarter. Cumulative subscriber base stood at 4.36 lakh. The company added 10000 subscribers on its new DOCSIS 3.0 platform. Broadband average revenue per user came in at Rs 330. The mgmt stated that all DOCSIS 3.0 additions have come in at an ARPU of over Rs 500. On a blended basis, the mgmt sees broadband ARPU Rs 350 for FY14, Rs 400 for FY15, and Rs 500 for FY16.

The standalone gross debt stood at Rs 1085 crore and net debt at Rs 1015 crore, while consolidated gross debt stood at Rs 1475 crore and net debt at Rs 1385 crore.