The pay TV business of Sri Lanka’s Dialog Telekom group will take time to become profitable, with break even estimated at around 250,000 customers. As per Hans Wijayasuriya, chief executive of Dialog Telekom PLC, they have 150,000 customers and can achieve that target or the Breakeven within another 12-15 months.
But when comparing with the market fact & figures and their financial statements, this is not the reality
According to SEC filings of DIAL, DTV had 118,000 subscribers at the end of Sep ‘08 and 122,000 end of Dec 2008. That means DTV had added on 4,000 during the 4th Q last year. It is highly unlikely that they had added 25,000 during 1st Q this year to make the subscriber base 150,000? At the rate of 4,000 a quarter, DTV would take 25 X 4= 100 months to get extra 100,000 subscribers, not 12-15 months.
As per their interim financial statements (2nd quarter of 2009), DTV has 136,384 Pay TV Subscribers. This is the official subscriber base as per the financials. It’s an improvement of 5% when comparing to the previous quarter. That means still they are not in the 150,000 mark.
When comparing to the previous quarter DTV loss their revenue by 47% (775mn in 1st Q and 409Mn in 2nd Q). Not only had that, Dialog Telekom PLC as group lost 7.6 billion rupees in the June 2009 quarter.
Meanwhile STL IPTV (competitor of DTV) providing their services to their customers and targeted customers in a reasonable price. Not like DTV, STL IPTV provides customers a single product that can deliver never before enjoyed features such as video-on-demand, Time Shift TV, Trick Play plus a host of other interactive features as well as allowing access to e-mail, internet directory services, telephony and all other business communications through one converged IP broadband network, delivered through a single converged line offering triple services – data, voice and multimedia.
Due to upcoming competition of SLT IPTV (please not SLT group making profits when Dialog making a huge loss) and financial crisis of the Dialog Group, it’s very difficult to achieve the break even target as they aimed. Not only that, they have to reduce their initial connection fee and package charges to service in market. DTV subscribers are experiencing so many problems in rainy or cloudy weather conditions and technical problems in the decoder too.
How can we assume a profitable future for DTV. “The Future.Today” motto is no longer using by dialog after the rebranding but The Future is questionable when comparing with the Today’s performances.
Original article: Reality of DTV, a loss entity of Dialog group http://bit.ly/14Imqn
