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/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/11/STB.jpg?itok=WsiaUBr8
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
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/09/PFT.jpg?itok=VJugic3c
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
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/09/JosephSiino.jpg?itok=doyka7Tg
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
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/06/Brian_Morris-Colin_Smith.jpg?itok=xVBB0KbV
Tata Comm to deliver Motorsport videos on global devices

MUMBAI: Tata Communications will now deliver video content for Motorsport.tv 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
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/06/ChyronHego_0.jpg?itok=qWRkJ4jh
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
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/03/Arvin%20patel%20tivo.jpg?itok=Ieo7eXfw
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
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/09/30/cable-wire.jpg?itok=vJM4lI00
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
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/09/29/Aruna_Sundararajan.jpg?itok=sLiHZik7
Cable variant with 50x capacity launched, good for BharatNet, says telecom panel secy

MUMBAI: Sterlite Tech, an end-to-end global technology leader in smarter digital networks, has bolstered its all-new FlashFWD 5G Solution with the launch of 1152F variant cables at India Mobile Congress (#IMC2017).

Technology Hardware Set-top Boxes
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/09/18/Bengt%20Jonsson%20and%20Pallavi%20Puri.jpg?itok=pTULRoal
Tata Sky and Irdeto tie up, OTT service launched on Android devices

MUMBAI: India’s pay TV market is highly competitive, yet there is tremendous growth potential for OTT services as disposable incomes rise. According to Tetra Pax Index 2017, 82 per cent of the Indian population spends its time on mobile phones, and 2017 saw a 23 per cent rise in internet users who...

Technology Software Applications

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories