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India's direct-to-home mart to soon be world's largest

Last updated on: October 4, 2010 09:55 IST

India's direct-to-home mart to soon be world's largest

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Sharmistha Mukherjee & Surajeet Das Gupta in New Delhi

India will replace the US as the world's largest direct-to-home market in the next six months, hitting over 32 million subscribers within the first quarter of the next calendar year. 

In 2009, there were 130 million DTH subscribers across the globe and the number grew by 14 per cent, according to international studies.

Also, the high-definition DTH revolution will explode in India much earlier than what most pundits had predicted.

Operators say by 2014, more than 10 per cent of the 50 million subscribers of DTH in India will be on high-definition DTH.

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Photographs: Reuters
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Jahawar Goel, managing director of Dish TV, the country's largest DTH service provider, says:  "As a category, DTH services is adding around 1 million subscribers every month. India will overtake the US in terms of sheer volume by early next year."

Goel says that half-a-dozen DTH operators in the country currently command over 28 million subscribers and expect to touch around 30 million by the end of this year.

Looking at the pace of growth, they will overtake the US within the first three months of next calendar year, adds Goel. Moreover, he points out, the market in the US is not growing at all.

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Photographs: Reuters
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A similar view is endorsed by Tata Sky, which says the DTH industry has already grown by over 25 per cent in the first six months of the year.

"Tata Sky itself has added on about a million subscribers," said Vikram Mehra, chief marketing officer of the company. And, he predicts that in the next six months, the industry will have over 33 million subscribers.

However, just like in telecommunications, it might take at least another two to three years before operators, who are at present reeling under losses of over Rs 6,000 crore (Rs 60 billion), will be able to haul themselves back into the black.

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That is because most operators have invested large sums of money to build infrastructure and on the cost of acquiring subscribers (which still includes subsidising the set-top box), even while tariffs are falling.  Global average revenue per user for DTH is $45. 

For the moment, high-definition services cater to a niche segment and are constrained by the lack of content.

Only around half-a-dozen channels offer programming in high definition.

They include Sun TV, Discovery HD, National Geographic HD, Colors, Zee TV HD, Zee Cinema HD and two regional movie channels in Tamil and Telugu.

For high-definition services to pick up substantially, channels will have to offer a much larger bouquet of programming in this format.

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Once that happens, operators could see a significant rise in average revenue per user.

Media Partners Asia, a Hong Kong-based research agency on media, entertainment and communications industries, in a study entitled 'Asia-Pacific Pay TV & Broadband Markets 2010' conducted in April, has predicted that India might overtake US in terms of DTH subscriber base only in 2012.

Dish TV at present has a subscriber base of 8 million. Tata Sky and Sun Direct come in second with a subscriber base of around 6 million each.

While Airtel Digital TV has a reported subscriber base of 3.8 million and Reliance Big TV has garnered around 2.4 million consumers.


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