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Digitization Sparks New DTH Battle in India
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Breaking News :  Digitization Sparks New DTH Battle in India
The Indian market is set to
explode over the next few
years as the country enters
a new digitization phase.
While many urban areas in India
have moved to digital, the next
wave of digitization will offer
Direct to Home (DTH) operators
plenty of opportunity to target
households in rural areas away
from the main cities. While it is
hard to put a number on this,
executives from Dish TV, Tata
Sky, and Videocon — three of
the leading players in the market
— expect there could be another
70 million homes their companies
could target.

India Digitization

The first two phases of India
digitization process saw the four
metropolitan areas of Delhi,
Mumbai, Kolkata, and Chennai go
digital in late 2012. By March 31,
2013, 38 cities with a population
of more than 1 million went
through the digitization process.
Phase 3 and Phase 4 are now
underway. Phase 3 sees the rest
of the urban areas go digital by
the end of 2015, and by the end
0f 2016, the whole country
should have gone digital.
RC Venkateish, CEO of Dish TV, is
bullish about the operator’s
prospects over the next few
years. “There is still strong
growth to be had with Phase 3
and Phase 4 digitalization, which
is going to open up 70 million
homes, which are currently
analog, into the digital realm.
That should give enough impetus
to the DTH industry for the next
three to four years at least. We
are still at a stage where large
chunks of households in India are
either analog or terrestrial.
Roughly, around 50 percent of
the market is still analog/
terrestrial now. So, over the
next three to four years we will
see this digital conversation.”
Himanshu Patil, COO of Videocon,
also agrees that the market has
reached a key inflection point
calling this a “big opportunity”
for DTH operators. “We have seen
this in the past that when analog
subscribers are forced to make a
decision and go digital, at that
point they have options such as
DTH or digital cable. There is a
good chance they will go to DTH,”
he says. “So, I am hopeful we will
be able to pick-up more
subscribers. The analog people
will be forced to make a choice,
particularly in Phase 3 markets,
where cable is not particularly
well organized.”

Ultra-HD in India

India is one of the first markets
to see 4K, with most of the
operators now launching 4K-
enabled Set-Top Boxes (STBs).
Patil says 4K could be a
competitive differentiator in
India. In February, Videocon
launched its first 4K channel in
India and it shows 4K content on
a 24/7 basis. It will soon add
content from Bollywood to the
mix to make 4K a much stronger
proposition. Patil says this now
gives the operator a 4K pipe,
which it plans to use when there
is a major event. The next T20
(Cricket) World Cup, for example,
will likely be broadcast in 4K.
“There are already over 400,000
Ultra-HD enabled TV sets already
sold in India. I think that number
is going to grow. The television
panel prices are going down. Once
4K sets become more popular, I
think they are going to follow
the same path as HD in India.
Once devices get sold, content
follows and then it will happen.
In terms of HD, you had sports
channels go to HD first, and then
the general entertainment
channels, movie channels and now
you have even the regional
channels in India going HD,” says
Patil believes next year the
Indian Premier League (cricket)
could be carried in 4K. And with
the Olympics also being in 4K,
2016 could prove to be a dynamic
year for such broadcasts.
Tata Sky showed the Cricket
World Cup in 4K this year
followed but the launch of its 4K
in partnership with Ericsson.
Harit Nagpal, CEO of Tata Sky,
says 4K adoption is dependent on
three things: televisions
available for that technology,
platforms adopting the
technology, and content.
“In this case, normally you need
to have content first. This is
what we saw with HD. As the
content became available, the
penetration went up,” he says.
Despite making a foray into 4K,
Nagpal is unsure as to when it
will have a strong impact.
“I don’t have any visibility as to
when that might happen,” he
says. “That is down to the
broadcasters. It will be the high-
end customers that will really
benefit. It will largely be
upgrades when it does come in.”
From a Dish TV perspective,
Ventateish admits it is still the
“early days” for 4K and that the
ecosystem is still maturing,
particularly because there
remains a way to go with HD.
“We are still really rolling out
HD, and that is still just now
becoming meaningful. That has
been in the market for five
years, so 4K will be a bit of a
long haul. The penetration of TV
sets is still miniscule — it is only
in the thousands right now. We
will have to see how the
different pieces of the puzzle
evolve. You need the content,
licenses to really start to
happen. All different parts of the
ecosystem need to come
together. Having a 4K set-top
box alone is not going to create
the market at the end of the
day, so even though we are
developing this, 4K is still a long
way away in India,” he says.

Commercial Satellite Space

With a population of more than
1.25 billion, and an emerging
middle class, India is a huge pay-
TV market. Operators such as
Tata Sky, Dish TV, and Videocon
have managed to exploit the
market to each have more than
10 million subscribers. Dish TV,
which was the first operator in
the market, now has more than
13 million subscribers. Tata Sky
has more than 10 million
subscribers, and Videocon has
close to 14 million subscribers.
Videocon could have more than 35
HD channels over the next year,
and is looking to gain satellite
capacity to cater for this demand
for extra HD channels. The
operator is looking at another
two transponders at 36 MHz and
will likely partner with SingTel
for this capacity. Dish TV
operates on two satellites:
AsiaSat 5 and SES 8. Videocon is
using 540 Mhz of capacity on the
SingTel ST 2 satellite. Tata Sky
is using a total of 12

OTT and Changing Dynamics

Like in other video markets, the
increasing prominence of mobile
devices is changing the way
viewers consume their content.
Patil says Over-the-Top (OTT)
distribution has been very slow,
but there is interest in it, and
ultimately it will come to the
market in a big way, once the
prices for data come down.
“Today, in India, the cost of
bandwidth on the mobile network
is very high,” he says. “Most of
the OTT content is consumed on
mobile phones in India. I would
say the market here is at least a
year away. However, OTT will
come in a big way, and network
charges will become more
affordable and then people will
start consuming more and more in
this space. Right now, people are
more snacking in this space,
rather than watching full series.
Average viewing times on OTT in
India are very low.”
Nagpal sees OTT as a complement
to DTH offerings currently on the
market. With a lack of high
quality wired broadband in India,
the progress for OTT has been
slow. However, operators such as
Tata Sky are trying to adapt to
the changing needs of customers.
Tata Sky launched a TV on
Demand and TV Everywhere
service three years ago. It is a
niche product limited by the
availability of reliable Internet
“Video needs good quality
broadband to move. It is scarce in
India. We launched it in the
knowledge that numbers would be
small in the country, but in the
hope that it would give us a good
experience about what the
customers like and what they
don’t like, so when a better
quality of broadband is available,
we know what to provide to
customers,” Nagpal says.
The market is on the cusp of
change and the dynamics could
shift fairly significantly once
good quality broadband comes into
the market.
“India is now moving toward
being an over-the-air market
and this will improve once there
is better availability of
broadband. There are also over
450 million smartphones in India.
The moment good quality
broadband is available, online
consumption will multiply,” adds
Venkateish, on the other hand,
does not see the market changing
any time soon.
“At the top end of the pyramid,
we are seeing some consumption
moving to media served over IP
and broadband, but that is still
very small as far as India is
concerned. I think over the next
five to seven years, it will all be
about the traditional modes of
distribution,” he adds.
However, Venkateish confirms
that Dish TV will start working on
other modes of consumption. It
already has its own OTT service
called “Dish Online” which it
launched last year. The operator
plans to further develop this
“If consumers move online, we
don’t want them to sacrifice
their satellite connection to do
so. We also want to upgrade our
technology so this can include 4K
and expanding our wireless
offerings. So, we are aiming to
sell consumers more products,”
says Venkateish.

Technology Investments

All of the operators are looking
to invest in new technology to
stay ahead of the game in India.
Venkateish says Dish TV spends
around $120 million a year in new
hardware; Videocon is investing
heavily in improving its customer
service network, which boasts
300 service centers and
engineers located in 1,200 towns
across India; and Tata Sky is
focusing its investments around
the STB, according to Nagpal.
“When new capacity comes in, it
means new investment in
infrastructure. In our case,
there is a large investment in
STBs because, in India, the STBs
have to be subsidized. This
investment is proportionate to
subscriber additions. Every
subscriber we add, we subsidize
the set-top box. That is my
investment. If the rate of
acquisition goes up, my
investment goes up,” he says.
While all the operators show
healthy subscriber numbers,
Average Revenues Per User
(ARPUs) tend to be pretty low —
around the $5 mark. Trying to
increase these ARPUs is one of
the challenges facing Indian DTH
operators. Even small increases
in ARPU have the potential to
make a huge difference.
“The ARPU right now is $4.25 at
the consumer level. We hope to
grow the ARPU 6 to 7 percent
annually over the next three to
four years. The major
opportunity for us is to capture
the low hanging fruit through
digitization, which is happening
over the next couple of years,”
says Venkateish.
There is little doubt that the
market for DTH services will
continue to grow thanks to this
new wave of digitalization. For
all the DTH operators, the next
few years will be about a landgrab
for new subscribers.
“The market right now is all
about new acquisitions. In terms
of TV penetration, India right
now has 65 percent. So, all of
this means is that there is
enough room for everybody to
grow in this market. Some
companies are definitely doing
better than others, but the
market is still strong,” admits
Patil pointing to some interesting
content trends taking place in
the market. “If you look at the
content side, a lot of regional
channels are coming up, and pay-
TV operators are looking at how
they can have a full suite of
channels, not only in the main
Hindi-speaking markets, but also
in some of the smaller regional
markets. English content is also
coming more into the market.
More American shows are coming
to India … these are the types of
experiments that are happening.”
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[-] The following 1 user says Thank You to anil g for this post:

Don't know why Tata Sky always thinks bad about India. Lot of negativity from Nagpal as if every thing is cheap in UK and USA.
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