Broadband, OTT boost seen helping Tata Play

Tata Play‘s revenue from the core direct-to-home (DTH) business is predicted to decrease in the medium term due to moderation in its subscriber base. Still, this decline is anticipated to be offset by growth in broadband and over-the-top (OTT) businesses.

According to a report by Crisil, the company’s operating margins may face pressure in FY24 and FY25 due to moderation in the DTH subscriber base, partially offset by OTT aggregator Tata Play Binge’s improved metrics and Tata Play Broadband‘s expected breakeven.

The company’s DTH subscriber base decreased in September 2023 compared to September 2022 due to competition from DD Free Dish and OTT platforms.

The company is backed by Tata Sons, Walt Disney, and Temasek.

Tata Play’s subscriber market share decreased from 33% in September 2022 to 32.43%, while the industry subscriber base decreased from 65.58 million to 64.18 million, according to Trai data.

The company’s consolidated revenue declined 5% to ₹4,499 crore in FY23 due to a fall in DTH revenues. However, the de-growth in DTH was partially offset by higher revenues from Tata Play Broadband and Tata Play Binge.

Ebitda decreased 30% to ₹1,361 crore due to revenue decline and higher deferred equipment cost recognition.

In FY21, the company changed its accounting treatment about expenditure on customer premises equipment costs from the entrustment model (capital expenditure) to the sale model (operating expenditure), which impacted its Ebitda.

The rating agency has reaffirmed the DTH company’s bank facilities worth ₹8,000 crore due to its healthy business risk profile driven by its market leadership in the DTH segment.

Roy Walsh

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