As transponders lie vacant, DTH industry pitches for price cuts....

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Updated: April 24, 2016 22:13 IST | Meenakshi Verma Ambwani



A number of foreign operators launching satellites with an India beam has led to a situation of a large capacity lying vacant in Ku-band transponders, meant for Direct-to-Home (DTH) companies.

But, industry players lament they are not able to cash in on discounts on transponder lease and renewal fees, as contracts are signed through Antrix, the marketing arm of Indian Space Research Organisation (ISRO), and not directly by the players.

As per current norms, Indian DTH players apply to Antrix when they require satellite transponder capacities, which combine all these requests and float the aggregate requirements to foreign satellite operators.

Based on these negotiations, the transponder capacities are contracted for Indian players.

Jawahar Goel, Managing Director of Dish TV, said, “A lot of satellite transponder capacity is lying vacant over India, which includes both foreign and Indian satellites. We believe over 150 Ku-band transponders are idle. DTH companies should get the advantage of prices because of this over-built transponder capacity.”

Currency fluctuation

He said that since transponder lease agreements are signed in dollars, it has also become expensive due to the currency fluctuations. “These agreements should be signed in rupee terms to protect Indian players from currency fluctuations,” he added.

In an email on the pricing dynamics, Blaine Curcio, Senior Analyst at Northern Sky Research, said: “There are enough players in the market, and enough of a “land grab” mentality, as it relates to general satcom industry growth. If there was some degree of free market to the pricing structure in India, I would suspect some downward pressure on pricing, particularly in Ku-band.”

As per industry estimates, nearly 75 per cent of satellite transponder capacity of DTH players is currently being met by foreign companies and, depending on currency valuations, the industry pays in the range of ₹700-900 crore in lease fees annually. DS Govindarajan, co-founder of Aniara Space, said: “There is definitely some free capacity of transponders on foreign satellites available on the Indian beam, currently meant for DTH players.

“It all depends on whether this capacity meets the requirements of DTH players, considering they need satellites to be in a particular orbital location.”

A report last month by the Cable and Satellite Broadcasting Association of Asia and PwC recommended that DTH operators should be allowed to have direct contracts to expand their capacity with existing satellite providers, which are already authorised to provide their services. It also pointed out that the three-year contract that is currently offered by Antrix and ISRO are “severely limiting”.

“Foreign transponder contracts need to be of longer durations (10–15 years) to allow Indian companies to leverage on cost economics and provide cost protection to DTH operators,” the report added.

Jehil Thakkar, Partner and Head (Media and Entertainment), KPMG India, added: “This is a longstanding challenge DTH companies are facing. Not being able to directly do contracts with satellite operators makes these contracts less beneficial commercially.”

http://m.thehindubusinessline.com/info-tech/as-transponders-lie-vacant-dth-industry-pitches-for-price-cuts/article8516644.ece
 
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