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HomeArticlesBroadcast TechnologyDTH Faces an Uphill Task ahead
Thursday, 16 August 2018 11:49

DTH Faces an Uphill Task ahead

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DTH in India is slowly losing its sheen to the online services. This was evident from the TRAI’s quarterly performance report for the first quarter ending 30 June 2018. The total active DTH pay-TV subscribers dropped slightly to 67.53 million from 67.56 million. The loss has been experienced year after year after the completion of mandatory digitization in March 2017. 

On a year on year basis the subscriber base of DTH has increased by just 7.85 per cent  as opposed to the usual growth rate of around 15 per cent. The market shares of most of the DTH companies have remained stagnant. There are now 5 DTH pay-TV operators following the merger between Dish TV and Videocon d2h last year. This made the overall share of merged entity to 43 per cent of the DTH market, followed by Tata Sky (25 per cent), Airtel DTH (21 per cent), Sun Direct (10 per cent) and Reliance Digital TV (1 per cent).

 DTH operators always boasted of their quality of service as compared to cable TV but with the introduction of OTT services by broadcasters like HotStar, SonyLIV, Voot and international OTT services like Amazon Prime and Netflix which permit consumers to watch their choice programmes anytime and anyw here and on the device of their convenience, DTH is slowly losing its ground. With crashing broadband costs and availability of low cost smart phones these services delivered through Internet are cheap and give best of the quality, same if not better than the DTH. OTT services do not get affected by rains or snow storms as the DTH does. 

 

Shortage of transponders

The biggest challenge faced by DTH operators today is shortage of transponders as the regulations permit use of only Indian satellites. This restricts the number of channels they can broadcast whereas there is no such limit for the cable operators and OTT players. They need government’s approval to use a foreign satellites. India has a total registered demand of 175 satellite transponders for DTH services, but only 111 transponders are currently available.  MIB is now considering allowing the use of foreign  satellites by DTH operators till availability of Indian satellites improves.

 

Low ARPUs

DTH operators’ do not enjoy higher ARPUs than the cable operators. At present ARPUs are just around Rs 220 which same as cable networks in the cities. They face a big challenge to sell their packages in rural areas where they are trying to market now. They have tried many tricks to do that including a package of Rs 99/- and day to day basis refills. Some of the operators manage to get a subscription of Rs 1000 or more for premium packages including their value addition of platform services but majority of subscribers pay less than Rs 300 per month. 

Gone are the days when broadcasters tied up with DTH operators to reach the subscribers bypassing the cable operators? Now these broadcasters have their own OTT service to appease the consumer with whatever he/she wants. Most of the Indian DTH companies are framing an elaborate digital strategy wherein they partner with OTT companies to beat the competition. 

 

RPD Technology for DTH

The Broadcast Audience Research Council (BARC) India has started the exercise of collaborating with direct-to-home (DTH) and cable operators to measure viewership patterns of their set-top boxes. The television audience measurement agency has rolled out its pilot projects with its current partners, including DEN Networks, Airtel Digital TV (DTH) and Siti Cable. Operators have to make set-top boxes return path  data (RPD) ready for this purpose. This means that the set-top boxes will have to be two-way—they need a return path.

 

TRAI’s recommendations on DTH Licencing Policy

In its response to MIB’s back reference on its Recommendations on Licensing Guidelines for the DTH industry dated 23rd July 2014, the Regulator has emphasized on ease of doing business for the DTH operators sticking to its favourable recommendations given earlier inspite of different proposals from the MIB. These recommendations are summarized below. 

a) Under the new licensing regime for DTH, licenses should be issued for a period of 20 years. Upon request of the Licensee, the period of License may be renewed by 10 years at a time, on the terms and conditions specified by the Licensor in consultation with the Authority, in line with the telecom industry. 

b) A one-time entry fee of Rs. 10 crore should be charged in the new DTH licensing regime. The Authority also recommends that the renewal shall be on the terms and conditions, including renewal fee, specified by the Licensor, in consultation with the Authority.

c) The license fee in the new DTH licensing regime should be charged as 8% of Adjusted Gross Revenue (AGR). The Authority is of the view that AGR should be calculated by excluding, Goods and Service Tax (GST) actually paid to the Government, from the Gross Revenue (GR) of the licensee company. The license should include a provision that prescribes that the Licensor reserves the right to modify the License Fee as a percentage of AGR any time during the currency of the agreement. 

d) DTH licensees shall be required to furnish a Bank Guarantee(BG) foran amount equivalent to the estimated sum payable, equivalent to License fee for two quarters and other dues not otherwise securitized. The bank guarantee should be valid for a year which should be renewed year-on-year basis in such a manner that the BG remains valid during the entire license period. For new entrants, a BG for a fixed amount of Rs. 5 crore shall be taken for the first two quarters, and thereafter, for an amount equivalent to the estimated sum payable, equivalent to License fee for two quarters and other dues not otherwise securitized.

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