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India's Leading Source for Broadcasting & Broadband Information - CableQuest Magazine
Friday, 21 March 2008 00:00


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Last monthTata Sky, the much hyped DTH venture of Tatas and Star TV redueced their hardware price to half i.e Rs 1499 from the earlier Rs3000/- . People in the industry feel that it was a reaction to Dish TV’s restructured prices to a level of Rs 3150 to Rs 4990 for its various packages a little while ago.

Even the services are being enhanced with value additions. Dish TV has announced mobile antennas and VGA set-top-boxes for PC, whereas TataSky has announced the launch of Digital Video Recorders(DVR). In fact, battle clouds are gathering on the DTH front before just the launch of Big TV, DTH venture of Reliance. Big TV has already announced having ordered 2 million set-top-boxes and plans to provide 1000 STBs to Reliance employees all over the country for the initial seeding. In the DTH market, considering the situation on the ground where already three players are in action, this is not a mean task.,br>

A similar situation had existed when the much hyped Tata Sky was launched 18 months back. A few months before the launch Dish TV had announced six month's free subscription and reduced their equipment cost. Although it did capture a good market in the initial blitz but their market faded soon giving way to Tata Sky. With their brand name and initial ad blitz Tata Sky did set a world record of 1 million subscribers in the first year in July 2007 but soon selling became tough.

Although by lowering their price to half now they still hope to garner 1 million mark this year too but it seems difficult under the present circumstances.


Figures Don't lie Projections Do.

Vikram Kaushik, the MD & CEO of Tata Sky is very optimistic about their performance. He expects to reach a 8 million target by 2012. The whole DTH industry is very optimistic. All market surveys project them as the winner in the battle of television delivery. An SSKI report predicts the subscriber base to touch 16.1 million by 2010 and exam research report on the industry feels it will touch 30.6 million by 2011. Kotak research places the figure at 25 million by 2012. All this appears very rosy but our experience says that the way the battle is becoming tougher day and day, it will be a great thing if DTH penetration reaches more than 20 million by 2012. That may still be only 15% of the cable TV penetration.

It appears the research companies are presuming that the Cable TV market will keep dwindling rapidly giving way to the DTH service. Experience of last four years however, give a different picture. Cable TV is maintaining a growth of 15-18% every year. Also the market grabbed by the DTH platforms(Exclude the FTA DD Direct Plus) numbering 3.5 million subscribers in four years of its existence is too low make a sizable dent in the 75 million market of Cable TV. All it has done is to attract people in remote areas where cable does not reach or a few affluent subscribers who can afford both cable and DTH in their quest to try out new technologies.

The masses in the rural areas amounting to 40 million TV households rely mostly on terrestrial television, DD Direct Plus or the Cable. We should not forget that it is not the the technology but cost that will make the choice for the people. Who in these 40 million households would require stereo sound, interactivity and digital picture, is the question to be answered by these research companies.

Lets take the example of a much richer market like the U.S. where DTH started operating in 1985. Even after 22 years it does not have more than 25% of the market. In India we have a worse scenario ahead. Two players have 3.5 million MPEG-2 set-top-boxes in the market.

Newcomers are coming up with MPEG-4 technology with better services and more channels.

It is not possible for the Dish TV and Tata Sky to upgrade their system to MPEG-4 now as it will require installing new uplink equipment and replace all set-top-boxes free of cost.

ISRO has already raised their hands to supply more Ku-Band transponders. DTH Operators will be looking around for other international satellites or to have their own satellites placed in the orbit, the way Dish TV and Reliance are planning. That will take another two to three years.

Cable Networks have already started digitizing their networks as the cost of digital headends and set-top-boxes have fallen considerably. They will not let their fallen considerably. They will not let their 75 million market go away easily. They can offer many more channels than the DTH at a lesser cost. IPTV has commenced operating. Although it is not easy for them to penetrate the last mile, within five years they will have a considerable penetration to make their presence felt. If cable operators also migrate to IPTV, They will make their head-ends two way automatically providing triple play services voice video and data not so easy on DTH.

Mobile TV and WiMax are the other wireless technologies that may prevent people shifting to DTH in the remote and semi-urban areas. By 2012 surely, these technologies are expected to become very popular because of their mobility factor like the cellular phones.

Delaying implementation of CAS will prove a boon for the Cable TV operators who can now take advantage of the new technologies and start with MPEG-4 set top-boxes or go straight for IPTV networks. With the rates of fiber optic cables going down every day, cable operators can install fiber to the premises increasing their bandwidth capacity manifolds. With their lower over-heads, they can penetrate faster than the telcos with the FTTH. It is expected that even telcos may start with their FTTH projects taking help of these operators who are the masters of Last Mile.

HITS, headend-in-the sky technology recommended by the government will again boost up the digitalisation process in the Cable TV market and since frequency neutrality recommended by the TRAI has not been accepted by the government, HITS will also give a good competition to DTH.

DTH cannot offer internet or VOIP services. So providing triple play services of the future is easier on land lines than satellite links.

The existing regulations do not allow exclusivity of content on DTH platforms. Also we have not yet permitted adult programming on the Television . All over the world, it is the adult programming that drives a DTH platform. DD Direct Plus FTA services became popular more than the pay TV DTH, mainly because people had the option to watch some Russian Channels with adult content on the same satellite earlier. They can also tune in to other FTA Channels on nearby satellites having footprints in India. Remenber that cable operators an not down link an unregistered channels in India but an individual with a Ku-Band/C-Band dish has the option of dozens of adults channels available on FTA platforms.

Talking of consumer choice, DTH still provides bundled packages and not a-la-carte like in CAS areas. Even the call centre based services are much short of expectations. Just log on to a number of blog sites like www.broadbandforum.com and you will find what consumers feel about the DTH Service. Consumers have already become weary of the much hyped services of DTH which was projected as the saviour of consumers against the monopoly of cable TV operators.

So, in conclusion, the war clouds are just beginning to appear . It is difficult to predict the future so accurately due to the above mentioned uncertainties/ road blocks. How the markets cop up with all these technologies in India will be a great thing to watch. A lot also depends on the type of regulations churned out by TRAI as well as how the masses react to them. Changing the mind set of people is much slower than the introduction of new technologies. Ultimately it will be the masses who will decide what to adopt and what not to, considering their budgets and requirements. Lets keep our fingers crossed and let the figures go burst. 

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