The DTH industry might, at least in part, emulate the telecom sector over the next few years, what with the scorching rate of subscriber additions over the past few years.
Consider this: From just 4 million subscribers in 2007, there were an estimated 31 million DTH connections by 2010. That figure is currently 35 million. This period has also seen the industry move from a two-player market, shared by Dish TV and Tata Sky, to a six-player one with Bharti Airtel, Sun Direct, Reliance Communications and Videocon jumping into the fray in the last 2-3 years. The pace of addition is estimated to be about a million a month.
Among those that report numbers, Dish TV has a gross subscriber base of 10.4 million, while Bharti Airtel and RCom have 5.6 million and 3.5 million respectively. According to a recent report from Media Partners Asia (MPA), if consistently revenue generating subscribers alone are considered, Dish TV with a 26 per cent market share, Tata Sky (22 per cent) and Airtel Digital TV (20 per cent) dominate the landscape.
Scaling up
But scaling up would be the name of the game. Just to put things in perspective, the largest player in the DTH space – Dish TV has revenues of Rs 1,436.5 crore. But what is to be noted is that its top-line has been growing at 52 per cent annually over the last 3 years. Driving the average revenues per user (ARPU) has been a key issue as the Indian audience is not used to doling out heavy sums for television entertainment. The ARPUs tend to hover around Rs 150-160 per month levels, though for Tata Sky that figure stands at Rs 195, according to a report from FICCI-KPMG recently. That figure may well go up, what with most DTH players offering newly released movies to subscribers for a fee that is a fraction of cost incurred on movie tickets. Other value-added services such as movie on demand and gaming are expected to prop up ARPUs.
Subscriber acquisition cost (SAC) too is tapering off or declining, even though the cost of subsiding set- top boxes continues to be a drag. From Rs 6,000 levels, the industry standard for SAC is now more in the Rs 3,000-4,000 range. Dish TV with its scale has a SAC of just Rs 2,224.
Penetration
DTH has already penetrated close to about 30 per,cent of the total cable and satellite households. The telecom regulator's directive towards digitising all cable networks in the country over the next 3-4 years, the platform with its inherent wireless last mile may well steal a march over the traditional cable networks.
Another factor that may increase DTH penetration is that multiple connections with one dish antenna are being experimented in Tier2 and Tier3 cities according to the FICCI-KPMG report. Even from a subscriber universe point of view, an MPA report states that of the 141 million TV households in India, only 116 million enjoy cable and satellite connections. This gives an immediate addressable market of 25 million!