Technology

Keep STB subsidies high: Kotak to DTH players















NEW DELHI: Kotak Institutional Equities, among India‘s top brokerage firms, has said that for the DTH sector, subsidy on STBs would be crucial and warned that late entrants may have to pay higher subsidy and also higher costs due to shortage of transponders on the Ku band.


On the ground of transponders, it predicts the launch of Sun Direct TV ahead of Reliance or Bharti, since Sun has booked transponders on the just launched Insat-4B satellite.


A report from the company‘s study on the DTH sector says that the subsidy on each STB ought to be around Rs 1,200 to allow faster penetration by DTH players.

 

"We expect the imminent entry of several new DTH players in the market and potentially impact the level of STB subsidies. However, we also expect that increased distribution and faster execution leading to a steep increase in the annual net additions, compared to the current pace," the report says.


Iterating that most costs on the DTH sector are fairly typical, it says that STB subsidies are the key variable in the financial model and valuation of a DTH company.


It explains that the STB subsidies would depend on the number of operators and the intent of the individual operators regarding market share and pricing, as well as some other factors.

 

"It is possible," the report looks ahead, "that the late entrants may resort to higher subsidies in order to accelerate their pace of net additions compared to incumbents and try to gain market share.


Incidentally, RN Choubey, Advisor, Telecom Regulatory Authority of India had told indiantelevision.com last week that if the DTH operators really have to penetrate the market deeper than they have, they would have to keep the entry point cost for the customers low.


At the present moment, they are charging steeply for the STBs and offering some opening bonanza, which is in fact keeping the ARPU very low, as the Kotak analysis (reported earlier on indiantelevision.com) notes.


Essentially, therefore, both Kotak and the sector regulator have the same advice for the DTH players: make it less costly to buy a box and enjoy greater and faster penetration.


"For our preliminary modelling we assume a subsidy of Rs 1,200 for a new subscriber and keep this constant for the entire period of our forecast. We amortise this over 48 months," it advices the DTH players. The period of forecast is 10 years, till 2017.


Kotak does not see other costs as a major variable in their valuation for the DTH industry, saying, "Much of the costs are fairly typical and well known."


It also does not see costs as an area of difference across operators. The only cost difference would be in broadcasting unique content, whenever the government allows that, the study suggests.


A DTH operator, provided the government allows this, could add unique content to garner more market share.


Kotak has modelled longer term content costs to be 45 to 50 per cent of revenue before taxes, but including license and spectrum fees, which last could be higher for new entrants.


The study has modelled transponder charge at $ 1 billion to 1.1 billion per transponder, with14 channels on each transponder.


It reiterates that theoretically a transponder could carry larger number of channels but the quality suffers, and in the age of heightened competition, this would affect an individual DTH player, if he tries this.


"We do not see this as a differentiating factor between financially strong players," the report holds.

 

Latest Reads

http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/05/16/divesh.jpg?itok=zBE4YL3k
Livestreaming App SWOO sees momentum in India; Launches Trivia Format in India

SWOO, a leading global livestreaming platform established in Middle East, today announced the launch of its SWOO TRIVIA SHOW ? a celebrity hosted live video streaming game show for Indians. SWOO is a user friendly, engaging and feature-rich live broadcasting app available across Android/ iOS/ Web...

Technology Software Applications
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/05/14/TiVo-800.jpg?itok=YeoN1Hcd
TiVo exits STB business

MUMBAI: TiVo is exiting the manufacturing, sales and distribution of set-top boxes to a yet-undisclosed third party, the company has said.

Technology Hardware Set-top Boxes
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/05/09/iot.jpg?itok=8nXgmc_U
IET India IoT Panel joins hands with exhibitions india group for the 3rd edition of IoT india congress

IoT India Congress is India?s Platform of Platforms for the Internet of Things conceptualized by IET India IoT Panel, a think tank constituted by the Institution of Engineering and Technology (IET) India. The 3rd edition of IoT India Congress will be hosted in collaboration with India?s leading...

Technology Software Firmware
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/05/08/lexi.jpg?itok=uPD543QG
Tata Elxsi's Automation suite adopted by pan-European Media and Telecommunications Company

Tata Elxsi, a global design and technology services company, announced the licensing of its integrated test automation and monitoring suite ?FalconEye? to a pan-European media and telecommunications company for OTT automation and improving streaming performance.

Technology Software Firmware
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/04/13/nabshow.jpg?itok=S9rP2yss
Verimatrix recognized for contributions to latin american Pay-TV market with PRODU award win at NAB Show

LAS VEGAS: Verimatrix, a specialist in securing and enhancing revenue for network-connected devices and services, has received the PRODU Award for Best Pay-TV Technology Contribution on behalf of its MultiRights? OTT solution. MultiRights helps service providers effectively navigate the modern OTT...

Technology Software Firmware
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/04/09/magai.jpg?itok=233hZ8S7
Amagi debuts machine-learning powered content-preparation suite

Amagi, a cloud-based technology provider for media processing, has launched Tornado, a machine learning-based content preparation service that enables TV networks and content owners to scale their operations and accelerate broadcast workflows.

Technology Hardware Components
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/03/08/tivo.jpg?itok=1e68Zg0C
Sharp and TiVo extend interactive program guide deal to power content Discovery across entertainment devices

MUMBAI: TiVo Corporation (NASDAQ: TIVO), a global leader in entertainment technology and audience insights, today announced that Sharp Corporation will further utilize TiVo?s G-Guide HTML across Sharp 4K smart TVs and Ultra HD Blu-ray recorders in Japan, TiVo?s G-Guide xD app and remote schedule...

Technology Hardware Components
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/01/25/priyanka.jpg?itok=s2F-oxzy
HARMAN announces Priyanka Chopra as global brand ambassador

HARMAN International, a wholly-owned subsidiary of Samsung Electronics Co., Ltd. focused on connected technologies for automotive, consumer and enterprise markets, today announced that actress, singer, producer and philanthropist Priyanka Chopra has been named a global brand ambassador for the...

Technology Hardware Components
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/01/24/etere_0.jpg?itok=PCzLNCEq
Etere HSM expands interoperability with Grass Valley

Etere HSM features an integration with Grass Valley that improves interoperability, streamlines connectivity, enables faster content processing and includes deep archive capabilities. Etere introduces a new integration layer between Etere Hierarchical Storage Management (HSM) and Grass Valley...

Technology Hardware Components

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories