Broadcast: In The Pink Of Health

VoicenData Bureau
New Update

The financial year 2005-06 saw a significant transition in broadcast

business, though the major gainers in the supply chain were the last mile

operators (LMOs). As the number of channel offerings by the service providers

swelled, the revenue model of the cable TV business blurred due to the fact that

this industry has failed to keep track of its legitimate subscribers. With the

conditional access system already in doldrums,

broadcast services in India are seeking different routes to reach the

masses. Among the other options that could bring broadcast services to the

commonplace, DTH leads the race as some big players with definite service plans

have already jumped into the arena. The potential of this market brought in

hitherto unknown names such as BPCL, into the field of broadcast service.


Indian Landscape

The picture in India is no different. Reports suggest that India would be

the biggest market in South Asia by 2010 if it comes to providing alternative

broadcast services. People have started showing interest in switching over to

DTH. With freedom of choice and pay-per-view facility in mind, the current

subscriber base of DTH has gone up to 2.5 mn within a period of three years.

With noise  regarding implementation

of CAS subsiding to some extent, other feasible challenges to CAS such as IPTV,

triple play, and DTH are now slowly becoming visible.

The DTH Connection

DTH is the buzzword now for TV viewers in the metros as it offers immense

opportunities to both broadcasters and viewers. In general, the DTH service is

the one in which a large number of channels are digitally compressed, encrypted,

and beamed from very high power satellites. And it is no more an inaccessible

option for the viewers.

The Players

Out of the current 2.5 mn DTH subscribers in India, DishTV has more than 1.2

mn subscribers with new subscribers being added everyday. The Zee group's DTH

service offers access to several pay channels, but still faces problems relating

to content, as several popular channels such as Star and Sony group products are

not available with this platform. Also, popular ones such as Discovery, AXN, and

MTV are missing. As of now, subscribers are not very enthusiastic about the

price plan or content. But there is no dearth of business plans for Zee

Telefilms (ZTL). Wire and Wireless India (WWIL), the cable outfit of ZTL, is

planning to invest Rs 500 crore to layout a digital platform, gear up for triple

play, and expand value-added services. The net expense incurred by DishTV for

DTH operations so far is Rs 380 crore. It expects gross revenue of Rs 320 crore

in FY 2006-07 riding on a subscriber base of 2.4 mn and an ARPU of Rs 250,

thanks to the launch of various value-added services. And in FY 2007-08, it

hopes to reach a revenue mark of Rs 800 crore with a subscriber count of 3.15 mn

and ARPU of Rs 310.


Public broadcaster, Doordarshan seems to be a better choice for TV viewers,

as it provides service free of cost. With a subscriber base of more than 1 mn,

Doordarshan's DTH offers 33 free-to-air channels including 14 private

channels, and 12 radio channels. It is expected to add 15 more private channels

to its kitty as Prasar Bharti is conducting a co-branded joint marketing with

the help of IGO TV of Onida group.

To give stiff competition to the two old players (DishTV and Doordarshan),

Tata Sky, a 80:20 joint venture between the Tatas and Rupert Murdoch-owned Star,

is tightening its belt and gearing up to unleash its DTH service in the second

half of 2006. Tata Sky plans to offer some new tastes to viewers and would focus

on niche content, quality of service, and aggressive marketing.


(till March 2006)

TV Owning Homes:

117 mn

Cable&Satellite Homes: 71 mn

DTH Homes: 2.26 mn

Number of Television Sets: 200 mn

Number of STB Homes: 0.8 mn


Anil Dhirubhai Ambani Enterprise (ADAE) would be the next to launch its DTH

venture, Bluemagic. It plans to launch its DTH service by the end of this year

and it hopes to be allotted six transponders on INSAT 4B, which is yet to be


State-owned Bharat Petroleum  (BPCL) is also all set to venture into a completely different

domain, which is DTH TV, where it will soon be jostling for space with the likes

of Zee, Tata-Star, and Reliance Bluemagic. Plans have been finalized for foray

into DTH broadcasting services through a 100% subsidiary with an initial paid-up

capital of Rs 95 crore. After a survey by KPMG, BPCL now wants to float a

completely separate company, as its Articles of Association does not allow it to

venture into the entertainment business. A financial feasibility study predicts

the payback period as 8.5 years, and an 11.6% return after 10.5 years, which

could go up to 23.5% in 14.5 years. The firm is willing to invest Rs 990 crore

over the next five years.

BPCL has already commissioned a Ku band transponder-based VSAT hub.

Facilities on the existing radio frequency system of the VSAT hub can be used

effectively, while operating DTH platform. BPCL wants to take advantage of its

extensive network and is confident that its huge customer base would bring in



Kalanithi Maran's Sun Direct of Sun TV fame is also planning to push itself

into the DTH market, though plans are yet to be finalized.

The Market

A report from Hong Kong-based media research firm, Media Partners Asia (MPA)

says that India would emerge as Asia's leading revenue generating pay-TV

market. With multi-channel video industry (cable, DTH, and IPTV), India's

turnover would grow to $7.2 bn by 2010 from $3.6 bn in 2005, and to $10.5 bn by

2015, it predicts. But a lot depends on whether it can clear up the regulatory

hurdles. For example, MPA feels the Indian DTH market could grow to Rs 45 bn ($1

bn) by 2015 if the subscriber base reaches 11 mn users.

On the MSO front, the broadcast industry did not witness any buyouts in 2005

except Siticable's acquisition of a leading multi-system operator (MSO) in

Kolkata, Indian Cable Net. This was a strategic deal to block out entry of

Kalanithi Maran's Sun Group, which was planning to launch a Bengali channel,

Surjo, into a cable business in the state. After acquiring Indian Cable Net,

Siticable now, became the leading MSO in the city with a 70% share in the




Major Broadcast Service

Star, Sony, Eenadu TV, Doordarshan, and Zee

Leading MSOs: Siticable, Hathway, and InCablenet

Satellite Players: Insat, Intelesat, NSS, PAS-7, Telstar, Thaicom, and Asiasat

CAS: NDS, Irdeto, and

STB: Homecast,
Scientific Atlanta, NEC, and Coship


list is indicative

The Space War

As Tata Sky and Sun Direct are preparing to launch their respective DTH

services, the war is on to hire transponders on Insat 4 series satellites. Tata

Sky has hired 11 Ku band transponders on Insat 4A. A back up transponder space

has also been booked on Insat 4C. Sun Direct, meanwhile, has booked about six

transponders in the initial phase on 4B or 4C. According to a

source in ISRO Insat 4B is likely to launch in the second or third

quarter of 2006. DTH providers can supply around 12 channels per transponder,

depending on their compression technology. The availability of transponder space

is the deciding factor for the DTH service providers in providing channel

broadcasting. Insat 4A and Insat 4B have a capacity of 12 Ku band and 12 C-band

transponders each. Insat 4C, on the other hand, has just 12 Ku band

transponders. Dish TV and Doordarshan's DD Direct use the NSS 6 satellite for

their DTH services.

Ku band is so far the most appropriate and widely used mode for transmission.

As all encoded transmission signals are digital, it facilitates in providing

higher resolution picture quality and better audio than traditional analog


Future Perfect

At present, cable networks have a big presence in the Indian market with

around 80 mn C&S homes. So it is clearly evident that in its first few years

of operations, DTH services will be focused on a new market. This would

primarily constitute the rich segment from urban and semi-urban areas, but rural

areas would not be far away as DTH would give them a chance to get their desired

services independent of any network. Technologically the fastest moving country,

India would eye for Live TV, Mobile TV, and IPTV for sure. Though these

technologies are still evolving and face several issues such as an appropriate

business model, availability of spectrum, and infrastructure; we are not very

far from enjoying these services, if India is able to keep up the momentum it

has gained.

By our Reporter