Deep-pocketed companies such as Tata group, Bharti Airtel Ltd and Reliance Communications Ltd have followed Zee Entertainment Enterprises Ltd into the DTH space in India, where they are faced with a high cost of acquiring subscribers and tough competition from cable operators. According to data shared by Media Partners Asia, the acquisition cost for each subscriber is as high as Rs4,600 and the return on this investment still ranges between Rs85 and Rs200 in terms of monthly average revenue per user (Arpu). The set-top box (STB), or device that connects the television set to the external signal source, is the biggest cost for a DTH company at about Rs2,800, followed by Rs1,000 for the satellite dish. Other costs include installation charges, marketing expenditure and licence fees at Rs500, Rs250 and Rs50, respectively, per subscriber. Tata Sky remains the top Arpu grosser with an average Rs200 a month while Sun Direct, which launched in the northern part of the country a few months ago, has an Arpu level of Rs85, according to Media Partners Asia.
With aggressive marketing by DTH operators and the government trying to promote digitization of the Indian cable industry, the research firm predicts that in the next four years, DTH will garner a market share of about 28%.
At present, the country has around 15 million DTH subscribers and the industry has a turnover of nearly Rs2,800 crore. The Delhi Commonwealth Games, scheduled for October 2010, is expected to be a major catalyst for the growth of the DTH market in India, according to Media Partners Asia.
"The requirement to broadcast Commonwealth Games in high-definition format would provide an impetus to go digital and DTH services are likely to benefit, provided there is subsidization of STB and related equipment," the study says.Published by HT Syndication with permission from MINT. For more information on news feed please contact Sarabjit Jagirdar at htsyndication@hindustantimes.com
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