Astro sees higher revenue per user with added content

KUALA LUMPUR: Astro Malaysia Holdings Bhd expects an increase in its average revenue per user (arpu) for the current financial year ending Jan 31, 2014, driven by added monetisation from new pay-TV content and Internet-protocol television (IPTV) services via its Maxis Bhd tie-up.

“If you look at our new services, we’ve added Astro-On-The-Go (innovative service) and we’ve started commercialisation efforts on that beginning May,” said Astro chief executive officer Datuk Rohana Rozhan after the company’s AGM and EGM.

“Additionally, in April, we started rolling out our collaboration with Maxis, widening our footprint for broadband coverage from 100,000 homes to 1.4 million homes – and monetisation for that is going to be for the three quarters of this year. All these weren’t in existence last year,” she said.

Astro reported an arpu of RM94.20 for the first quarter of this year and RM93 for the full financial year 2013.

Rohana said Astro intended to boost its high-definition (HD) offering via extra transponders that it would be able to utilise from the Measat-3c satellite.

In May, Astro entered into an agreement with Measat Global Bhd for the utilisation of the transponder capacity on Measat-3c satellite for a fee of RM497.5mil.

“We’re currently operating on 18 transponders and that gives us the capability of packaging 170 channels for our customers. (Through the agreement with Measat) we’re contracting another 18 transponders to be delivered to us in three phases.”

Astro received approval from shareholders yesterday to utilise the M3c transponders. Rohana said the 18 new transponders would boost Astro’s total channel offering to 275 by 2019 from 179 currently, adding that it cost the company US$2mil (RM6.4mil) per transponder per annum.

“We consider it a finance lease, so we capitalise and put it on our balance sheet and amortise it over the life of the transponder, which is 15 years.

“With the existing transponders, we now have 37 HD channels and we plan to double that within the next couple of years to underpin the value proposition to our customers to take up our HD services,” she said.

Rohana added that the move to convert all of its customers’ legacy set-top boxes to the B.yond HD platform would help boost its revenue growth.

“For every swap out or a new customer coming to the Astro pay-platform, it costs us RM650, of which RM350 is capital expenditure. We capitalise it and amortise it over three years and the balance RM300 is operating expenditure (opex) as we set up the set-up boxes.”

She said Astro swapped 770,000 boxes in 2012, adding that the company plans to swap out the remaining 1.3 million boxes this year.

“That’s why this year is the highest opex year. But it is on this premise, the swap out of the boxes, that we are driving our double-digit topline growth.

“Last year, our revenue grew 10%, but in the first quarter of this year, it was up 14%. It’s a one-off reinvestment but the returns are double-digit for the next couple of years.”