Asia's top 40 pay-TV operators will see annual subscription growth at close to 20% for the whole of 2009, buoyed by gains in India and China, and by the growth of digital TV, according to new research from Media Partners Asia.

More than 70% of the 40 operators' user base had been upgraded to digital TV by the the end of June, driven by momentum in China, Australia, Japan and Korea and a recent cable digital TV relaunch in Taiwan. Total digital TV installed base for the 40 surveyed operators will reach over 54 million by end-2009, more than 75% of total pay-TV subs and close to 50% market share in digital pay-TV across Asia.

In spite of a recessionary macro environment, the demand for pay-TV remains robust in Asia Pacific and in certain instances, ARPUs along with profits are also growing healthily," said MPA executive director Vivek Couto. "Pay-TV, especially when anchored to digital upgrade, competition and next-generation broadband digital services, is proving itself as a sustainable proxy for consumption and investment."

Subscriptions for the top 40 operators stand at 65.3 million, around a third of the region's installed pay-TV base. MPA forecasts indicate that these operators will end the year with 70.7 million customers, annual net additions of 11.3 million and close to 20% annual growth.

But taking out the key markets of China and India, the region does not look quite so stellar, albeit still positive, with leading operators elsewhere expected to grow at 8% this year. Subscriber and ARPU growth has softened in Singapore and Hong Kong while churn has risen in Indonesia. Customer additions remain solid in Thailand, Malaysia and Australia, however, with the growth of fibre-based IPTV services providing a boost to the saturated Japan market.

Cash generation remains strong in Australia, Japan and Korea, where HD and DVR deployments are at their highest.

But there are a number of key issues for the operators to grapple with over the next few months. Among others, MPA identifies competition for the English Premier League soccer, with bids in Hong Kong anf key south-east Asian markets due in the second half of the year; better monetization for DTH operators in India; profit visibility for IPTV operators in Hong Kong, Singapore and Korea; digital cable upgrade financing in India; and realizing stronger digital cable ARPU growth in China.