Project Cost Estimates- Broad business assumptions here are that, a DTH platform would carry about 70 odd channels with additional services like PPV, NVOD and Internet. The principal costs would involve programming costs, satellite transponder costs, Conditional Access systems, Customer Premise Equipment costs and Marketing costs associated with DTH. It is found that the cost of financing the Customer Premises Equipment is massive and therefore it is viable to finance the set top box (STB) and dish antennae, the cost of which can be recovered from the customers on a monthly basis. However, it is assumed that the customer will pay for the installation charges. It is also interesting to note that financing the STB and dish antennae accounts for more than 75% of the project cost and is extremely price sensitive. Therefore a slight change in these equipment costs would significantly change the project cost. Drawing a parallel with cable costs here, it is seen that initially cable connections were costly. In fact one had to pay deposits too. However with the popularity of cable the costs reduced drastically. The same is expected to happen with DTH equipment whose costs are assumed to decrease by 10% on an annual basis.

Project Revenue Estimates- The major business assumptions here are that, since a large chunk of the project cost deals with financing the equipment for DTH, so too will the earnings from recovering this cost from the subscribers form the major component of revenues earned. Therefore a decrease in the cost of equipment would actually help in faster recovery of the expenses incurred. The other broad channels of revenues are base subscription, bouquet subscription, and NVOD, PPV and Internet usage.

Opportunities for DTH in India look great. There exists a tremendous potential for direct to home broadcast in this market and it is projected that by 2005 there would be around 2.5 million DTH subscribers in India. This figure is likely to increase due to the increase in TV and Cable households and also the growing multiple TV households, which would form a large percentage of the total subscriber base. Since India's population crossed the one billion mark, it is no surprise that satellite operators and programmers world-wide have set their sights on the world's largest open market for DTH satellite TV services. The growing popularity of TV as a communication medium has resulted in the TV media sectors undergoing a rapid transformation. Also when DTH transmissions start in India the market will open for the following types of equipment -Ku-band dish antennae and Integrated Receiver Decoders (IRD). In a couple of years with Multipoint Microwave Distribution System and Net Television the whole digital domain is going to open up very fast. DTH can help in narrower targeting of satellite delivered services, rather than a single regional service, allowing programming to be more directly geared to the interests, language and culture of the particular audience, as well as providing a vehicle that integrates and offers locally produced and local language material.

Drawing a parallel with the American DTH market, certain conclusions are drawn. Cable has been an early mover in India like in the U.S and with DTH operations starting as early as ' 92 the American DTH market is 10 million homes big as of today compared to 160 million cable homes. Similarly, with cable penetrating 35 million homes in India, given the time and resources, the DTH market size would stand at approximately 5 million homes by 2007 assuming operations start by 2002. The American TV household is roughly about 90% of the total U.S population with a figure of 2.24 TV's per household. This number has grown tremendously over the last 15 years and fast approaching saturation. This is boom time however, for the Indian TV market with numbers expected to touch 100 million six years hence from the present figure of 70 million odd. This combined with the growing multiple TV households shall triple the DTH subscriber base in 2004 from the 0.5 million expected in 2002(starting year of operation). Finally, the two main operators for DTH in the U.S, DirecTV and Echostar account for 95% of the total DTH subscriber base there and have proved to been extremely profitable. This has thrown a similar picture for the Indian scenario where not more than two DTH service providers could coexist profitably.

In conclusion, it has now been over a decade since DTH satellite broadcasting began to show promise as a new technology capable of widespread distribution of programs and services. In those early days, the prime concern of many governments was that the spread of DTH satellite would result in mass Americanization and a decline in the cultural values and ideas of their people. The solution that has to be found is to maintain some form of national control, ranging from outright ban on ownership of satellite signal receiving equipment, to introducing licensing regimes, prescribing guidelines for program content and placing limits on foreign ownership of broadcasting licenses or ventures. The present DTH policy drawn addresses some of these issues which effectively strikes a balance between the economic benefits of introducing new services, the consumer demand for change and the government's overriding interest in maintaining control over broadcasting. It remains to be seen how India will strike a final balance in the structuring of its laws and regulatory scheme to maximize the benefits of the new technologies, whilst ensuring that the national and public interests in the control and content of those services are protected.


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