(14 February 2008 6:30 pm)

NEW DELHI: Reliance Communications' Big TV has started test run in homes of Anil Dhirubhai Ambani group employees even as it has drawn up an aggressive plan plan to build a sizeable direct-to-home (DTH) subscriber base.

Big TV is now showing 60 channels from all major broadcasters, and has offered the boxes to its employees through internal mailers at the highly subsidised rate of Rs 1,000 per subscriber.

Industry sources said that the price of Reliance DTH would remain unchanged when it is commercially launched a few weeks from now.

Big TV plans to show close to 300 channels when fully functional, a possibility because of the MPEG 4 format it will be using.

The company, which has reportedly ordered two million set-top boxes (STBs), has developed a technological solution which can upgrade an existing MPEG 2 STB to MPEG 4 level.

A source said that Reliance would deploy this solution as a marketing tool to capture the existing subscribers of Tata Sky and Dish TV.

The latest regulation for the DTH sector recommended by the Telecom Authority of India (Trai) says that all new connections would have to be on the MPEG 4 format and the boxes would have to be interoperable.

This means that a subscriber can change a service provider without having to buy new equipment. Both Tata Sky and Dish TV have written to the government to remove this clause, as it would not be possible for them to upgrade the total number of five million boxes they share between themselves.

While Trai has clarified that the regulation would not affect old connections, it means that even the old DTH players would have to give new connections in MPEG 4 format.

For the rest, the existing five million would stay on the MPEG 2 format. Even in is this segment, Reliance's new solution of upgrading to MPEG 4 format would be a big lure.

A price war is imminent. While TataSky has already lowered its charges by half of what it started with a year ago, just to stay in competition, it is still above the price Reliance is offering.

Dish TV officials were not ready to let their plans be public, saying "something will be done."

But the real impact of Big TV's launch could be felt on the cable sector with the entry cost falling to as low as Rs 1,000.

Reliance Entertainment president Rajesh Sawhney was in a meeting when contacted and could not give his comments.