DTH

DTH growing, but cable TV to hold sway in India: MPA

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NEW DELHI: Cable TV is to remain the core advertising and distribution platform for TV channels for some more time to come in India though DTH is expected to generate advertising for various niche channels, including new channels programmed for DTH by Zee and Star, according to an international broadcast industry report.

According to a new survey released by the Hong Kong-based Media Partners Asia (MPA), Indian cable TV advertising is poised to generate $2.3 billion per annum by 2015, DTH $120 million (about 9 per cent of total DTH industry revenue by 2015) and IPTV $21 million.

As digital DTH satellite pay TV services --- yet to compete directly with cable due to various content and distribution issues --- evolve in India, the scenario is likely to change from this year onward.

MPA expects C&S channels’ subscription to climb from $353 million in 2005 to $1.2 billion by 2010, driven by rate deregulation after 2008, significant DTH growth and investment in content, cable digitisation and IPTV deployment.

The C&S channels are expected to increase their share of the cable TV distribution pie from 14 per cent in 2005 to 16 per cent by 2010 and 19 per cent by 2015, while their share of the total multichannel video subscription pie could grow to more than 21 per cent by 2010 and 25 per cent by 2015.

India’s market for multichannel video (cable, DTH, IPTV) could grow from approximately 65 million in 2005 to 104 million by 2010 and 125 million by 2015.

This implies that multichannel video penetration of TVHH (TV households) could grow from 57 per cent in 2005 to 67 per cent by 2010 and 71 per cent by 2015.

“Driven by DTH pay TV competition and potential deregulation, we expect cable to gradually consolidate last mile ownership, ramp-up deployment of bundled digital video and broadband Internet, and corporatise industry practices,” MPA states in its industry survey 2006.

DTH growth is likely to accelerate after 2006, driven principally by Subhash Chandra promoted Dish TV and Tata Sky, followed by Reliance and Sun TV.

The competition is likely to intensify between 2006 – 2010, led by aggressive retail pricing, promotions, packaging, STB subsidies and increased investment in programming.

Most of Dish TV’s 750,000 pay TV subscribers have come from “cable dark” areas. Once it obtains access to content from Star and Sony, Dish TV subscriber base likely further accelerate and compete directly with cable.

While cable’s low monthly price is a competitive deterrent to DTH, aggressive deployers such as Tata Sky will likely match cable’s low monthly fees and subsidize upfront charges, the survey says.

Digital DTH pay TV subscribers, according to MPA, could grow from 750,000 in 2005 to 9.8 million by 2010 and 15.7 million by 2015, implying a 13 per cent share of the multichannel video market by 2015, 69 per cent of the digital pay-TV market, and 9 per cent of total TV homes.

“India remains the most significant and accessible cable & satellite (C&S) opportunity in the Asia Pacific region. However, the regulatory framework, especially with respect to retail and wholesale cable TV rates, foreign investment, broadband competition, and programme distribution has become increasingly uneven,” MPA observes.

According to estimates, India’s C&S industry turnover grew 18.5 per cent in 2005 to reach $3.6 billion. Out of this, $2.54 billion came from subscription and $1.02 billion from advertising.

MPA estimates indicate a total of 855,000 broadband subscribers as of year ending December 2005, representing 0.4 per cent household penetration. ADSL had a 73 per cent share of the market with cable at 27 per cent.

According to the Telecom Regulatory Authority of India (Trai), broadband subscribers passed one million in January 2006, but this is significantly below the “Broadband Policy” target of three million.

Driven by long-term last mile cable consolidation and increased investment in broadband and digital, India’s broadband cable TV industry is projected to generate $5.1 billion in subscription by 2010 and $7.1 billion by 2015.

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