Digitisation drives players to step up their DTH play

Of the six major DTH players in the fray, Dishtv commands a comfortable lead over the others. But with Tata Sky shedding its
premium tag and Airtel and Videocon offering more interactive services, the contest is getting keener. By Sanjay Kumar
SANJAY KUMAR | Issue Dated: June 2, 2013, New Delhi
Tags : DTH | cable TV | Digitisation | Tata Sky | Sun Direct | Big TV | Airtel | Videocon | MPA |

The mandatory cable TV
digitisation is helping the Direct-to-Home (DTH), or satellite TV players, to expand their subscriber base, which stood over 48 million
last year. While phase 1 of digitisation saw around 10 million TV homes in the four metros convert to digital, over 90 million
analogue cable TV homes are estimated to go digital by the end of the fourth phase in December 2014. For the uninitiated,
digitisation is being carried out in four phases. In the first phase, which ended on December 31, 2012, the four metros switched to
set-top boxes (STBs). In the second phase, 38 cities in 15 states moved to STBs by March 31, 2013. In the third phase the
deadline for which is September 30, 2014 all urban areas of India have to switch to STBs. By December 31, 2014, the entire
country will have to switch to STBs.

As a result of this digitisation drive, the DTH sector, which has clocked phenomenal growth ever since the category was first
introduced in India, is set to grow at an even more furious pace. In 2003, when the first mover and the countrys largest DTH player,
Delhi-based Dishtv, launched Indias first DTH service, not many people knew about the technology and its advantages. The entry
of other players such as Tata Sky, Sun Direct, Big TV, Airtel and Videocon in the following years has added traction to the market.
From one service provider and a little over half-a-million subscribers at the end of FY2006, to six players and 48 million plus
subscribers now, the DTH industry has come a long way in an analogue cable-dominated market.

The industry is expected to add 11-12 million subscribers annually for the next couple of years and is estimated to take it subscriber
count to 55 million by the end of the current fiscal. According to Media Partners Asia (MPA), Dishtv continues to lead with a market
share of 28% while Tata Sky falls a distant second with 18% market share. Airtel Digital TV and Sun Direct both come next with
16% share. Yet, the biggest surprise, according to MPA, seems to be Videocon. Despite being the weakest player in the DTH
market a year ago, it showed strong growth and has overtaken Reliances Big TV with over 11.4% share and about 6 million
subscribers.

In fact, as part of the mandatory digitisation, companies in the DTH and digital cable segments are now engaged in an interesting
tussle, vying to maintain their existing subscriber base as well as increase market penetration. The reason is simple. India is the
second-largest pay-TV market in the world, with almost 120 million subscribers and a reach of 48% of Indian households. As it is,
STAR Indias statistics show that DTH is emerging as the key growth driver for the overall pay-TV industry, growing at an impressive
74% as compared to 15% for digital cable and 11% for analog cable. According to industry veterans, value-added services are
proving to be a game-clincher for DTH, and the popularity of value-adds such as interactive education for students, farming advisory
content and religious content are helping DTH operators to woo more consumers into their fold. Integrating interactive capabilities
into basic DTH packages is an increasingly important initiative for operators, says R.C. Venkateish, CEO, Dishtv.

Moreover, Dishtv and Tata Sky are not the only DTH brands reaping the dividends from the shift in customers preference to digital.
According to Shashi Arora, CEO, Airtel DTH, The number of customers shifting to digital TV from analog has been witnessing a
growing momentum due to the digitisation drive across the country. As a leading DTH player in the industry, Airtel DTH has been
bagging 25% of all new customers that join the DTH bandwagon every month. Like Airtel, Videocon was a late entrant in the DTH
field but it has an impressive record in adding subscribers. It crossed 4 million subscribers in 2011 and added another 2.1 million
until June last year.

According to a recent Rediffusion-Y&Rs Brand Asset Valuator survey, though Dishtv comes through as the clear leader brand in the
DTH space, the other brands that lead the category are Tata Sky, Tata Sky+, and Videocon d2h. Airtel Digital TV also finds a place,
lagging slightly behind the rest. The survey notes that the two players to have successfully built 'Differentiation' into their brands as a
compelling proposition that stands out in the mind of the customer are the market leader Dishtv and the late entrant Videocon d2h.
On the other hand, early mover Tata Sky enjoys the highest awareness and regard among consumers. Newer players like Airtel
Digital TV and Videocon d2h are seen as Customer Caring and Innovative, respectively. When it comes to Total Consideration
scores, Dishtv again leads the pack, followed by Airtel Digital. In fact, 45 percent of households clearly see Dish TV in their
consideration set.

With all the six major DTH providers competing for consumers attention and business, the ones with more aggressive marketing
strategy and flexible plans that offer consumers value for money without compromising on quality and number of available channels
will stand to gain the most. Dishtv, as the first major DTH provider has benefited from the early mover advantage and will likely
continue to be the lead contender. But challenger Tata Skys ploy to look more affordable and its reputation of providing best-in-
class customer service may give it an edge in the long term. Meanwhile newer players such as Airtel, Reliance, and Videocon have
matured of late, and have also begun offering better technology and more channels. By offering more channels and innovative
technology, these new players stand a good chance of stealing a march over their more established competitors and reset the
playing field of the DTH business in the country.


Pt points
VRY IMP
MPA (Media Partners Asia) No 2. 18%
Around 10 million subscribers
India Second largest pay TV market in the world
Tata Sky 18%
Market share