Tata Sky re-negotiates contracts to reduce costs by 30%

Tata Sky re-negotiates contracts to reduce costs by 30%

New Delhi: Direct-to-home service provider Tata Sky is renegotiating contracts with vendors and distributors as part of its cost-cutting drive that could bring down operational costs by 30%.

“We have introduced an internal programme called ‘slim fit´ to improve productivity and bring down our operational cost by a minimum of 30%. This will improve and increase productivity and we will therefore reduce our costs drastically through every means," Tata Sky chief executive officer Vikram Kaushik said.

The programme includes renegotiation of all contracts and aggressive outsourcing of services, including installation, he said.

He, however, did not specify the amount to be saved.

“Project ‘slim fit´ has been running for the past 4-5 months and the availability of free cash and funding from banks will help us in building our infrastructure and projects," Kaushik said.

He said that though the company had introduced low-cost packages, it is currently selling at a premium (compared to others) and its average revenue per user (ARPU) is higher than the industry’s.

Tata Sky has crossed the 40-lakh-subscriber mark and plans to add another 10-15 lakh users this year.