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Topic: DTH - An emerging theme. Posted: 01/Sep/2007 at 10:02am
Transponder shortage hits DTH subscription
At least 45 more transponders needed to accommodate the spate of new channels, say experts.
Direct-to-home service providers are falling short of growth targets. These services are dependent on Ku-band transponders hosted on satellites.
Depending upon the technology used, each transponder can host 12 to 15 channels. With the growing number of popular channels, DTH companies are unable to host them all, thereby losing subscribers.
For April and May, Tata Sky and Dish TV (the two leading DTH companies) had set a target of 180,000 additional subscribers.
They managed to rope in 150,000.
Tata Sky recently dropped about 15 channels for want of space. Dish TV is also not carrying a number of regional channels for the same reason, sources said.
"There is a marked drop in subscriber acquisition in Punjab and Haryana for Tata Sky in the absence of the popular Punjabi channel, ETC Punjabi," a DTH dealer from Ludhiana said.
Dish TV has been slow in acquiring subscribers in Orissa, West Bengal and Assam, sources added.
Shortage of transponders will hit both existing players as well as new entrants like Sun Direct from Sun TV , Anil Dhirubhai's Reliance Bluemagic, Bharti and Videocon.
"In order to attract new subscribers, DTH players will need at least 45 additional transponders for carrying 200-odd channels," an industry expert said.
Apart from the scheduled launch of Insat 4R that will carry transponders for Reliance Bluemagic, there are no proposed launch plans for enhancing transponder strength for DTH companies.
Currently, Tata Sky offers 108 channels to its 700,000 subscribers, while Dish TV offers 170 channels to its 2.1 million subscribers.
Both Tata Sky and Dish TV are finding it tough to carry all the channels, even as at least 70 new channels are waiting for a launch by the year-end.
Tata Sky did not comment on plans to expand its channel offerings or on the trend of fewer new subscribers.
However, Dish TV Chief Executive Officer Arun Kapoor said that the shortage in transponders does affect subscriber acquisitions.
"We will get five more transponders soon. These will help us offer about 225 channels to our consumers," Kapoor said.
Source : Rediff
Edited by muralimohan001 - 01/Sep/2007 at 10:10am
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With access to Thomson technology, the company has developed a patented hardware and CAS system that will cut set-top boxes prices by half, people close to the situation said.
The letter of intent (LoI) for Videocon’s DTH licence has already been signed and a formal announcement is expected on Saturday. Videocon is looking at a competitive pricing, entry market strategy to push volumes and garner market share.
Videocon CMD Venugopal Dhoot declined to comment on the stake sale. The company will offer set-top boxes at around Rs 1,500 against the average market price of Rs 3,000, sources said.
According to a company executive, if undertaken prudently, a DTH project can be put together at a cheaper cost than what has been touted till now by Tata Sky and the Subhash Chandra-controlled Dish TV, the two private sector DTH service providers in the country.
However, with now six players eyeing the DTH space, in a market where cable has a strong hold, the going may not be very smooth for these companies. In fact, internationally, most market have a single or a maximum of two DTH payers. Most markets witness either a collapse or a consolidation where there were more than two players, as it seems to be economically unviable.
Moreover, in India DTH players are more at a disadvantage due to the current I&B laws, which do not permit any exclusivity of content. Hence, the entire strategy is dependent on pricing and distribution. Sun Direct, the Bharti group and Reliance’s DTH venture Reliance Bluemagic are expected to hit markets by the end of the current year or in early 2008.
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Posted: 02/Sep/2007 at 1:02pm
'Common FDI norms for cable, DTH, HITS & radio'
NEW DELHI: Telecom regulator Trai has asked the government to bring the FDI sectoral cap for cable TV services, Direct-to-Home services, Head End in the Sky (HITS) and satellite radio to 74%, making it on par with the FDI sectoral cap for the telecom sector. If accepted, this will mean that the FDI cap for cable TV, DTH and HITS will rise while that of satellite radio will fall.
In a communication to both the department of industrial policy and promotion (DIPP) and also to the information and broadcasting (I&B) ministry, Trai has called for a complete and holistic review of the FDI policy for the various sub sectors in telecommunications and broadcasting. The logic: “This will lead to consistency in policy and a level-playing field between competing technologies.”
Trai has also pointed out to the government that “in the era of convergence where the distinction between voice, internet and video is vanishing, having different FDI limits for different carriage medium was anomalous”. The regulator also said that the FDI policy should be consistent across all sectors as this will ensure “that policies are not a stumbling block where there is a natural convergence of technologies”.
When contacted by ET over the issue, Trai chairman Nripendra Misra confirmed the development.
At present, there is a wide variation in the FDI caps — the current policy permits 49% foreign holding in cable TV, 100% in satellite radio, 49% in DTH, of which direct foreign investment can only be 20%, with the rest having to be through FII investment. (The I&B ministry wants the FDI cap in satellite radio to be lowered to 49%, from 100% currently).
Last week, the department of telecom (DoT), in its internet services licences policy reduced the FDI in this segment to 74% from 100% earlier to bring it in line with the telecom sector as recommended by Trai. Similarly, if cable operators are allowed to offer Internet Protocol TV (IPTV) services, they will have to compete with telcos and ISPs, where the FDI cap is 74%.
The consultation process for laying down the guidelines for HITS, including the FDI cap for this segment is currently on. Industry sources are of the view that Trai will fix the cap at 49% in line with the DTH sector as both these platforms use technologies that are similar. HITS, essentially, is a platform for delivery of TV channels in digital addressable form. Unlike DTH, HITS has to rely on the vast cable network structure at the last mile level for transmission of signals to the consumer homes. Digitalisation and addressability are the two essential ingredients for HITS to succeed.
Earlier, too, Trai in its consultation paper on convergence had said: “In view of convergence and future broadband and telephony business it is suggested that the cable industry should also be allowed parity with telecom. It may be noted that Cable TV network is only a carriage for delivering voice and data just like copper or fibre being used by telcos for providing these services.”
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Posted: 02/Sep/2007 at 1:04pm
Operators of direct-to-home (DTH) television services have been barred by the Telecom Regulatory Authority of India (TRAI) from increasing subscription charges for the first six months following complaints about arbitrary changes in schemes.
TRAI's new regulations will also ensure the technical and commercial inter-operability of DTH services.
Technical inter-operability, or the ability to use the same set-top box, remote and rooftop dish with all DTH service operators, is ensured by the provision which prohibits operators from disabling a set-top box if a subscriber chooses not to continue availing their service.
The operators have been disabling set-top boxes by downloading a software patch from the satellite that aborts the operating system of the box. In such circumstances, subscribers have had to pay again for new hardware.
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Posted: 02/Sep/2007 at 3:11pm
Trai directs DTH cos to offer refunds
BS Reporter / New Delhi September 1, 2007
Starting December 1, the country’s 3.2 million Direct-to-Home (DTH) subscribers will be able to ask for refunds on DTH equipment (the set-top box and antenna) if they choose to discontinue the service. This is one of several key directives issued by industry regulator Telecom Regulatory Authority of India (Trai) to ensure subscribers quality of service.
The move will provide customers with the flexibility to choose between competing DTH platforms, especially with more players entering the fray. Tata Sky has one million subscribers and Dish TV 2.2 million. Recently, licences for DTH services have also been given to Sun TV Ltd (Sun Direct), Reliance Blue Magic and Bharti Telemedia.
The new regulations will be called the “Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulation, 2007” and will cover regulatory provisions protecting DTH subscribers.
DTH companies will also have to mandatorily offer subscribers a choice between outright purchase of DTH equipment and a rental scheme on roughly the same line as TV homes that subscribe to conditional access system (CAS) services.
To ensure that subscriber viewing is not interrupted Trai has directed that no DTH operator can discontinue any of its channels without prior information to subscribers. DTH operators will also be de-barred from disabling the set top box if its subscriber has delayed payment or opted out of the service. “This will enable the DTH subscriber to use the box to receive other free-to-air channels,” says the Trai provision.
Also, the regulator has said DTH companies will not be allowed to change the pricing of the subscription package offered to a subscriber for six months. However, subscribers could opt out of a particular package for any other package at any time.
Under the new regulations, DTH operators will have to establish call centres with a sufficient number of telephone lines with toll-free numbers, so that benchmarks on response times are met.
Each request or complaint to a call centre has to be assigned a docket number and 90% of complaints on non-receipt of signals will have to be redressed within 24 hours. “No complaint can be pending beyond 5 days and all billing complaints will have to be redressed by the DTH companies within seven days,” the new regulations say.
The move to refund subscribers money is likely to increase the financial burden on DTH companies, which already provide a subsidy of Rs 700-1,500 per set-top box to its subscribers. Subscribers pay between Rs 3,000 and Rs 4,000 for the DTH hardware pack.
Executives of both Tata Sky and Dish TV have raised reservations on refunding money to subscribers who discontinue the service. A senior Dish TV executive on conditions of anonymity said: "This is a welcome move for the industry, and we have been following a number of these provisions. But we wanted Trai to also look at incentivising us financially by advocating the removal of value added tax, which it has ignored."
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Posted: 02/Sep/2007 at 3:34pm
I dont think it is a bad news. It is just streamlining the industry. The renting out of dish should be a win-win situation for the companies as the rental would be more.
For example, if you have a broadband connection and rent a modem, the charges are monthly Rs.100. But, the total cost of the modem itself is Rs.1200. Is it not a win-win situation for the companies??
This is really a bad news for DTH operators in the long run if you look at increasing competition amongst the players.
I had the same thought. Intense competition in a capital intensive business can translate into below average margins. Could observors comment if this impacts the long term thesis?
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