MUMBAI: Airtel Digital TV, Bharti Airtel‘s direct-to-home (DTH) arm, continued to post operating profit for the second straight quarter amid healthy net subscription additions and a rise in ARPUs while churn rate has improved.

The operating profit was at Rs 147 million in the fiscal third-quarter ended 31 December, up from Rs 33 million in the trailing three-month period.

Airtel Digital TV added net 439,000 subscribers compared to a weak earlier quarter in which it grew just 55,000 new customers.

"Digitisation and the festive season helped us grow our subscriber base in the third quarter. We expect this quarter (beginning January) to be good. Some of the gains from digitisation (38 cities by 31 March as mandated by government), though, will be captured in April," Airtel Digital TV chief executive officer Shashi Arora told Indiantelevision.com.

Airtel Digital TV‘s subscriber base grew 6 per cent to total 7.9 million.

The company narrowed its fiscal third quarter loss before tax and interest to Rs 1.83 billion from Rs 2.23 billion in the earlier quarter. Revenue grew 29 per cent to Rs 4.28 billion from Rs 3.94 billion.

A striking feature this quarter has been how Airtel Digital TV has lifted its average revenue per user (ARPU) while at the same time improving its churn rate. ARPU increased 5 per cent to Rs 186 from Rs 177 in the previous quarter. The monthly churn decreased to 1.3 per cent in the third quarter from 1.9 per cent.

The improvement in ARPU has been achieved through product innovations, pricing corrections and upselling.

"Our HD (high definition) contribution is relatively higher than the other DTH companies. This has led to a rise in ARPUs for us," said Arora.

Dish TV, India‘s largest DTH operator by subscribers, marginally increased its ARPU to Rs 160 from Rs 159 in the trailing quarter.

During the quarter ended 31 December, Airtel Digital TV incurred a capital expenditure of Rs 1.35 billion in digital TV services.