DTH player has asked vendors to produce STBs
locally. Tweet 2 Dish TV, India’s top direct-to-home (DTH)
operator, is considering domestic sourcing of
digital set-top-boxes (STBs) to offset rising costs
due to rupee depreciation. A flagging rupee has been an industry-wide
concern for a while now, calling for efforts to
control the related impact on business, the
company’s top official said. Jawahar Goel, managing director, Dish TV India,
said on a recent analyst call, “Given the
depreciating rupee, we are evaluating
possibilities for improvement in hardware
economics of consumer premises equipment
(CPE) sourced from India. We have also been considering options with our overseas
suppliers to commence production at a base in
India.” Last month, Dish TV had taken a price hike of
`250 per STB to bridge the widening gap
between cost of CPE and the amount realised
from the customer. Other DTH players such as Tata Sky, Airtel Digital
and Reliance Digital followed suit by increasing
prices broadly in the same range. Also, in this year’s Budget, Union finance
minister P Chidambaram had hiked customs
duty on imported STBs from 5% to 10%.
Considering there aren’t many domestic
manufacturers of STBs for the digital cable and
DTH sectors, the government’s decision to make imported STBs expensive was seen as a move
to incentivise domestic manufacturing and
bringing more players in the market. Among the few local STB manufacturers are
Noida-based Dixon Technologies, Kortek
Electronics and Videocon Industries.
International players including Hampshire-
based Exset are understood to be exploring tie-
ups with Indian manufacturers to produce STBs here. Industry experts said Dish TV’s move to source
STBs locally may be followed by other players,
experts said. “We have a hunch that in the near future there
can be a higher duty on import, because of the
balance of payment issues. In fact, we have
already alerted our vendors to set up shop, to
convert and produce the STBs locally. We are
not buying new STBs for next 3-4 months as we have enough stock. And by that time the
vendors are likely set up shop in India,” said
Goel. Dish TV currently has an inventory of 1.4
million STBs and another 0.6 million with the
channel partners. At `60 a dollar, the total cost
of the CPE, company officials said, is close to
`2,700 for a standard definition set. DTH players
have been offering STBs at a subsidised cost to attract subscribers but are gradually expected
to move towards a zero-subsidy model by
increasing prices. Commenting on the
possibilities, R C Venkateish, CEO, Dish TV India,
said, “We are moving towards elimination of
subsidies in the next one to two years. So
certainly a combination of efforts to reduce
costs as well as increase prices will be used.
Local manufacturing will play a crucial role
towards this. While it is not a very big chunk, even a couple of hundred rupees of savings
will go further towards reduction of subsidies.” He said the company is focused on increasing
value delivery to the customer and is coming
up with innovations. “New products will be
introduced in the second half, which will
further position us separate from cable,” he
said. source Dish TV plans domestic sourcing of set-top boxes to offset rupee drop - Money - DNA
locally. Tweet 2 Dish TV, India’s top direct-to-home (DTH)
operator, is considering domestic sourcing of
digital set-top-boxes (STBs) to offset rising costs
due to rupee depreciation. A flagging rupee has been an industry-wide
concern for a while now, calling for efforts to
control the related impact on business, the
company’s top official said. Jawahar Goel, managing director, Dish TV India,
said on a recent analyst call, “Given the
depreciating rupee, we are evaluating
possibilities for improvement in hardware
economics of consumer premises equipment
(CPE) sourced from India. We have also been considering options with our overseas
suppliers to commence production at a base in
India.” Last month, Dish TV had taken a price hike of
`250 per STB to bridge the widening gap
between cost of CPE and the amount realised
from the customer. Other DTH players such as Tata Sky, Airtel Digital
and Reliance Digital followed suit by increasing
prices broadly in the same range. Also, in this year’s Budget, Union finance
minister P Chidambaram had hiked customs
duty on imported STBs from 5% to 10%.
Considering there aren’t many domestic
manufacturers of STBs for the digital cable and
DTH sectors, the government’s decision to make imported STBs expensive was seen as a move
to incentivise domestic manufacturing and
bringing more players in the market. Among the few local STB manufacturers are
Noida-based Dixon Technologies, Kortek
Electronics and Videocon Industries.
International players including Hampshire-
based Exset are understood to be exploring tie-
ups with Indian manufacturers to produce STBs here. Industry experts said Dish TV’s move to source
STBs locally may be followed by other players,
experts said. “We have a hunch that in the near future there
can be a higher duty on import, because of the
balance of payment issues. In fact, we have
already alerted our vendors to set up shop, to
convert and produce the STBs locally. We are
not buying new STBs for next 3-4 months as we have enough stock. And by that time the
vendors are likely set up shop in India,” said
Goel. Dish TV currently has an inventory of 1.4
million STBs and another 0.6 million with the
channel partners. At `60 a dollar, the total cost
of the CPE, company officials said, is close to
`2,700 for a standard definition set. DTH players
have been offering STBs at a subsidised cost to attract subscribers but are gradually expected
to move towards a zero-subsidy model by
increasing prices. Commenting on the
possibilities, R C Venkateish, CEO, Dish TV India,
said, “We are moving towards elimination of
subsidies in the next one to two years. So
certainly a combination of efforts to reduce
costs as well as increase prices will be used.
Local manufacturing will play a crucial role
towards this. While it is not a very big chunk, even a couple of hundred rupees of savings
will go further towards reduction of subsidies.” He said the company is focused on increasing
value delivery to the customer and is coming
up with innovations. “New products will be
introduced in the second half, which will
further position us separate from cable,” he
said. source Dish TV plans domestic sourcing of set-top boxes to offset rupee drop - Money - DNA
