CQ: Of late Videocon has had many new initiatives in the broadcasting sector including your listing on NASDAQ and launch of first 4K service in India. Can you please elaborate on these initiatives and is it aimed for expanding in the global market?
Anil Khera: We successfully listed American Depositary Shares on NASDAQ in April under the ticker VDTH, becoming the most valued Indian company to be listed on the NASDAQ. We issued ADS valuing $325m and proceeds are to be used for debt repayments and business expansion.
We have been in the forefront of technology and product innovations, aiming to provide the high quality service to our customers. Customer delight has always been our prime objective.
Our recently launched 4K Ultra HD multi-genre channel has taken the viewing experience to the next level. It carries multi-genre feed such as movies, video-on-demand, travel, infotainment and sports. We believe that 4K Ultra HD experience on Videocon d2h will greatly enhance the brand image of Videocon.
CQ: Videocon was the last DTH operator among the six private ones, but your growth has been the fastest, content being the same, what factors contributed to this extraordinary
Anil Khera: We believe we have been able to maintain our competitive advantage for several reasons, including:
1. Latest technology enjoyed by all subscribers (MPEG4 DVB S2), more compression and bandwidth advantage, and thus more channels and HD offerings;
2. Largest distribution network with over 200,000 retail outlets across India serving new customers and convenient recharges;
3. Strong focus on customer service; being the only operator in India with a exclusive service network, approximately 97% of the Company’s new subscribers get set top boxes installed on the same day; and
4. Unique control of box supply chain and R&D with development of local manufacturing capabilities.
CQ: At the beginning of digitization in early 2012, all DTH operators were very hopeful of acquiring the major share of the broadcasting sector, however after a year the progress was not so impressive. Even for the Phase –III and IV. DTH expected a much faster growth, but in spite of Cable going very slow, DTH is not gaining to that extent. What are your comments on this?
Anil Khera: According to us, DTH has garnered around 40% market share in Phase I and II markets, while it currently enjoys 70% go Digital market share in Phase III and IV markets. We are excited about the digitization opportunity as we believe that the Pay TV segment in India is positioned for extraordinary growth over the next few years with millions of new TV homes being created. We believe that 90-100 million homes will switch to DTH or digital cable platform in the next few years. We are well positioned to benefit from this and we believe we will take the largest share of this opportunity, as we have in the past.
CQ: HD services are expected to greatly enhance the kitty of DTH networks. What is the present percentage of share of HD service in DTH compared to the total subscriber base?
Anil Khera: Our HD subscribers base now represents almost 10% of the total net subscriber base, up from 5% in Fiscal 2014. In Fiscal 2015, around 30% of incremental net subscribers opted for HD service. We expect HD penetration to increase in the coming fiscal year, with an attendant impact on ARPU.
CQ: What according to you are the most popular value added services on DTH platforms that help to increase the ARPU? Is 4K getting you new customers and at what cost?
Anil Khera: At this point Movies on Demand, Games, Music and Education are popular drivers of Value Added Services on DTH. Bollywood movies of course play a driving role and we in particular have a unique and very strong proposition on that "d2h Cinema". We are also exploring other genres like kids and comedy.
CQ: Videocon is also a manufacturer of STBs and LED TVs. Does it give you an advantage in increasing your subscriber base?
Anil Khera: We believe this has certainly helped us create and maintain our competitive advantage. It has provided us with control over set top box supply chain and R&D with development of local manufacturing capabilities. For example, we are one of the first companies in India to offer radio frequency DTH remote and wireless DTH headphones.
CQ: Recently you are offering advertising services on your home channels. Can you please explain what are these offerings?
Anil Khera: We have launched several of our own channels in multiple genres some of which are driven by advertising revenues. We have set up a separate team in the company to drive this revenue stream. We had some success in the advertising space last year, as we reported advertising revenues of Rs100 million. Going forward, this is one of our focus areas and we expect an exponential growth in advertising revenues.
CQ: Can you explain how the ‘ Make in India’ programme of the present government has helped Indian manufacturers?