DTH ind to benefit from digitisation development: Dish TV

Ravi budhwar

21 Apr 2011
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The cabinet approved an ordinance on digitisation of cable network on Thursday. Talking to CNBC-TV18 in an interview, RC Venkatesh, chief executive officer of Dish TV feels that the development on cable network digitisation will be positive for the direct to home (DTH) industry. "The DTH industry has well funded players, very good business model in place and a solid distribution network to reach the customer and strong brand names," he pointed out.

According to Venkatesh, Dish TV stands to benefit the most as the market leader. He expects additional growth pace of 8-10% post the cable digitisation.

Here is the edited transcript of his interview. Also watch the accompanying video.

Q: How would dynamics play out for the DTH industry now that the digitisation has been approved for the cable space?

A: With this ordinance, mandating digitisation from 2012 to 2014, the customer will have to move from the analogue mode to the digital mode. The customers would have two choices, either to move towards digital cable or to move towards DTH connection.

This entire move will be significantly beneficial for the DTH industry because the industry has well funded players. The industry also has a very good business model in place and a solid distribution network to reach the customer and strong brand names. When the question of choice comes for the customer, there would be a fairly substantial gain accruing to all the DTH players in the industry.

Q: Would it be right to assume that price sensitive players or lower rung subscribers would still go the cable way? Won’t only the upper rung customers, in search of value added services, continue to migrate to DTH?

A: The issue of digitising a customer has a link chain associated with it. In the past three or four years, the cable companies haven’t had anything much to write about. First of all, we need to have the digital set top boxes in place and then get it installed.

The cable companies have been grappling for many years with the local cable operator (LCO), who is another factor in between. This whole development is very positive for the DTH industry.

Q: Would you get more aggressive for the March 2012 deadline or would you maintain your status quo in terms of subscriber acquisition?

A: We need to plan for that date. With the entire digitisation rolling out over the next two to three years, there will be a substantial uptake in the overall DTH numbers if they will the primary beneficiary of this whole digitisation rollout.

Therefore, we will have to prepare ourselves to cater to the incumbent demand in the next couple of years. We have a four or five months’ window for that.

We are already prepared because we have established a footprint across the entire country. We already have the requisite infrastructure to service those subscribers.

Q: Will there be any impact on your margins or bottomline due to this?

A: Unfortunately, I will not be able to give you any details of our company’s performance.

Q: For FY12-FY13, should we start factoring in higher numbers because of this move?

A: For the overall uptake of subscribers, this is a very positive development in terms of the market for DTH or digital connections. Therefore, it needs to be built into the modelling in terms of the subscribe uptake into DTH. As the market leader, we gain to benefit the most.

Q: Your last revenue rise was around 32% year-on-year (YoY). Should we factor in around 50%?

A: The digitisation is moving in phases, not the whole country is getting digitised. The first phase is four metros. The next phase would move into FY13-FY14. We will have additional growth momentum of at least 8-10% a year because of this.
source:money control
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