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It all began in October 2003 when the government gave out the licence to Dish TV, part of the Zee group, to operate direct-to-home (DTH) services after a long debate. That was nearly seven years after Star TV had made an aborted attempt to bring in the new technology taking advantage of the fact that the sector was totally unregulated. But the government, confronted with growing concerns that it could lead to a security breach (just like in telecom) and cultural invasion of the West, decided to do the easiest thing: ban DTH.
Understandably, when Dish TV launched its services, in a market dominated by cable operators, it decided to move cautiously. The strategy was to not concentrate on metros and large cities, where cable reigned supreme, and instead go to remote areas and rural markets where laying cable was not viable and consumers were starved for good content. It entered the market with limited programming: essentially the Zee bouquet and a few other channels.
The action shifted to the urban markets when Tata Sky, which stared service in 2006, chose to target the subscribers who were unhappy with analog cable. "In 2006, when we started, we were clear that our target will be the urban markets which were looking for good-quality viewing and customised choice of the programmes, and were ready to pay a bit of premium (analog cable did not provide them this) for it," says Harit Nagpal, CEO of Tata Sky.
Ten years after Dish TV's entry, DTH has become a force to reckon with. With over 40 million active subscribers (as of March 2013), it has grown tenfold from just 4 million customers six years ago. And it is no longer a rural phenomenon: 60 per cent of its subscribers are in the country's top 20 cities. Its share of the total satellite (cable and DTH) homes has gone up from 23 per cent in 2009-10 to 30 per cent now. Industry analysts say that by 2017-18, it will control over 36 per cent of the total subscriber base. That is why private equity funds like India Opportunities Fund (which has invested in Tata Sky) and a whole host of others like KKR and Bain Capital (it is in talks with Airtel DTH) are keen to invest in the sector.
The reasonwhy they are bullish is that DTH is adding over 8.5 million subscribers a year, while cable is growing at a fourth of that number. The phenomenal growth is backed by huge investments: the seven DTH operators have together put in over $4 billion to make it happen. So, what explains the magic of DTH? Obviously, the key is its high-quality signal, especially for those consumers who were used to analog TV. Also, it has provided customers the choice to see what they want rather than being at the mercy of the cable operator.
Read more: DTH readies for final assault on cable business | Business Standard
Understandably, when Dish TV launched its services, in a market dominated by cable operators, it decided to move cautiously. The strategy was to not concentrate on metros and large cities, where cable reigned supreme, and instead go to remote areas and rural markets where laying cable was not viable and consumers were starved for good content. It entered the market with limited programming: essentially the Zee bouquet and a few other channels.
The action shifted to the urban markets when Tata Sky, which stared service in 2006, chose to target the subscribers who were unhappy with analog cable. "In 2006, when we started, we were clear that our target will be the urban markets which were looking for good-quality viewing and customised choice of the programmes, and were ready to pay a bit of premium (analog cable did not provide them this) for it," says Harit Nagpal, CEO of Tata Sky.
Ten years after Dish TV's entry, DTH has become a force to reckon with. With over 40 million active subscribers (as of March 2013), it has grown tenfold from just 4 million customers six years ago. And it is no longer a rural phenomenon: 60 per cent of its subscribers are in the country's top 20 cities. Its share of the total satellite (cable and DTH) homes has gone up from 23 per cent in 2009-10 to 30 per cent now. Industry analysts say that by 2017-18, it will control over 36 per cent of the total subscriber base. That is why private equity funds like India Opportunities Fund (which has invested in Tata Sky) and a whole host of others like KKR and Bain Capital (it is in talks with Airtel DTH) are keen to invest in the sector.
The reasonwhy they are bullish is that DTH is adding over 8.5 million subscribers a year, while cable is growing at a fourth of that number. The phenomenal growth is backed by huge investments: the seven DTH operators have together put in over $4 billion to make it happen. So, what explains the magic of DTH? Obviously, the key is its high-quality signal, especially for those consumers who were used to analog TV. Also, it has provided customers the choice to see what they want rather than being at the mercy of the cable operator.
Read more: DTH readies for final assault on cable business | Business Standard
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