After Videocon d2h merger, Dish TV plans Rs 1,700-crore investment
Dish TV, which has completed its merger with Videocon d2h, plans to invest around Rs 1,700 crore as capex in the current fiscal and strengthen both the brands across India, top officials said. Dish TV would retain both the brands to leverage their strengths and is looking at benefits worth Rs 500 crore from synergies in the first year itself, Dish TV Group CEO Anil Dua told PTI. While Dish TV would look to enhance penetration in south India, where Videocon d2h has a strong presence, the latter would look to do the same in east India, he said. The merger has given the company "more financial strength to do many more things", he added.
Dua said Dish TV will step up investments and make both the brands stronger. According to Dish TV CFO Rajeev K Dalmia, before the merger Dish TV was investing around Rs 700 crore every year on set top boxes and incurring other costs as capex. "Together (with Videocon d2h) it would be Rs 1,600 crore to Rs 1,700 crore, which will include some one-time cost on account of alignment of servers, SAP and billing system," Dalmia added.
Besides increase in revenue, there would be reduced cost expenses post merger. "All these put together - revenue synergies and cost synergies - we will have more than Rs 500 crore (of benefit) in the first year of operation after the merger in FY 2018-19," he said. Moreover, Dua said the company is also looking at synergies between the two brands in other avenues like ad sales and value added services, as the combined entity would offer much larger reach. "We would also have significant saving on content purchase cost, debt-servicing and financing cost. We save on procurement cost of set top boxes and dish antennas and also on back-end costs such as as call centres, administration and marketing," he added.
After the merger, Dish TV-Videocon d2h (combined) would be the largest DTH operator in a country with nearly 45 per cent share of the DTH market with over 29 million subscribers, Dua said. Reiterating that the company planned to continue both Dish TV and Videocon d2h, he said,"Both are very strong brands and are in equal size in terms of number of subscribers, revenue and EBITDA...We would ride on each other's strength." On expansion strategy, he said,"Videocon d2h is very strong in south, where Dish not. On the other hand, Dish is very strong in east, where Videcon d2h is not. These brands will continue to strengthen wherever they are not strong, as we have to keep in mind competition form others as well."
The merger would also help to consolidate technical capacity helping the two brands to beam more channels from their platform as more transponders would be available, he said.