DTH firms need 10 mn subs to cash break even

MUMBAI: Indian direct-to-home (DTH) operators have a long road to travel before they can start counting their profits.

Dish TV and Tata Sky, the two leading companies, expect to achieve a full cash flow break even once they achieve 10 million subscribers.

Dish TV hopes to reach that milestone by 2012 as it targets to add 2.5 million subscribers this fiscal, capitalising from a sports-heavy year that has the soccer and cricket World Cups.
In FY’10, Dish TV mopped up 1.8 million subscribers amid price war and stiff competition from players like Sun Direct, Airtel Digital TV and Tata Sky.

Tata Sky, which acquired 1.4 million new subscribers in FY’10, hopes to post a speedier growth this year. The entire DTH sector, in fact, expects 10-11 million subscriber addition on the back of sports events in the year.

“The break even will come only after a DTH operator crosses a subscriber base of 10 million despite low ARPUs (average revenue per user). At least, that looks like the case with Dish TV and Tata Sky,” says a media analyst who closely tracks the sector.

Airtel Digital TV believes the economic viability and profitability of the DTH industry rests on three pillars. “The speed of acquisition is important. The content cost, at 50 per cent of cable TV pricing, is also on the higher side. DTH companies also have a tax liability of over 35 per. If these things get corrected, we will have a profitable industry,” says Bharti Airtel director & CEO - DTH Ajai Puri.  
Airtel Digital TV has the fastest growth among all the DTH operators, pocketing 27 per cent of the incremental subscribers. “If you take out the southern region, we will be having an incremental share of 33 per cent,” says Puri.

The DTH sector is stung by low ARPUs, higher content cost (despite moving to a fixed rate model with broadcasters) and an advertising spend that is estimated at Rs 6 billion a year.

Videocon, however, believes it can be ebitda positive sooner than the older players. “We expect to be ebitda positive after reaching 4-5 million subscribers. The industry has got a lot more regularised and this is apparent even on the content side. The prices of set-top boxes (STBs) have fallen and customer acquisition is happening a lot more faster. As for us, we have the advantage of a backward integration model,” says Videocon d2h chief executive officer Anil Khera.

DTH companies are waiting for the Telecom Regulatory Authority of India (Trai) to come out with its recommendations on tariff by the month-end. They expect the sector regulator to fix a policy that will have similar pricing for DTH and cable for addressable digitisation. 

Latest Reads
HAL Robotics ropes in Navanit Samaiyar as board member and advisor

MUMBAI: HAL Robotics has roped in Navanit Samaiyar as its board member and advisor. Samaiyar has a record of setting up, scaling and transforming businesses across a very wide cross section of industries spanning from IT/ ITeS to steel, telecom, engineering goods, earthmoving machinery, logistics...

Technology Hardware Components
Republic TV launches Android app

MUMBAI: Republic TV is on a roll. From rocking the ratings chart in launch week itself to going international, the channel has added one more accomplishment to its kitty. The Republic TV Android app is now live.

Technology Software Applications
STB cos in India, China enhancing features, providing customised solutions, Technavio enlists top vendors

MUMBAI: The global STB market is characterised by intense competition as the market is saturated in developed countries. The market share of these players is declining because of the entry of new players. The STB companies are enhancing the features of STBs and providing customised solutions to...

Technology Hardware Set-top Boxes
India's PFT Clear Media ERP suite to help US' PBS content delivery

MUMBAI: Prime Focus Technologies (PFT), the technology arm of Prime Focus, announced that its CLEAR™ Media ERP Suite has been selected by Public Broadcasting Service (PBS) to enhance their Network Operations Center (NOC) ecosystem efficiencies and sustainability, with the objective of reducing...

Technology Software Applications
Broadcasters, OTTs to gain as Via adds xHE-AAC at special rate

MUMBAI: Via Licensing Corporation, a intellectual property solutions provider, has announced the upcoming availability of Extended High Efficiency AAC (xHE-AAC) as part of the Advanced Audio Coding (AAC) patent pool. The expanded patent pool licence will be available at no additional cost to...

Technology Software Applications
Tata Comm to deliver Motorsport videos on global devices

MUMBAI: Tata Communications will now deliver video content for viewers' all devices over its global network. The two have partnered to power the growth of the network’s internet television platforms.

Technology Software Applications
How to create live video content sans pros, convert radio broadcast into visual show

MUMBAI: ChyronHego will be showcasing its live production, automation solutions at Broadcast India show in Mumbai in mid-October.

Technology Software Applications
Sony renews IP licence deal with TiVo

MUMBAI: TiVo Corporation, a leader in entertainment technology and audience insights, has announced that Sony Corporation, a leader in consumer electronics, has renewed its multi-year intellectual property (IP) licence agreement. The license to TiVo’s patent portfolios covers all of Sony’s...

Technology Software Applications
Digital TV, growing telecom major drivers of coaxial cable growth in A-Pac: Study

MUMBAI: The global coaxial cables market is mature owing to the use of coaxial cables in industries for a long time and the slow or stagnant product innovation.

Technology Hardware Components

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories