Feeding time in India’s DTH market

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Robin Hague ©RapidTVNews | 11-09-2011 Consolidation in the Indian DTH market is
inevitable, perhaps within months, according to
Tata Sky Managing Director, Harit Nagpa.
Speaking to an audience at NDS’ Perspectives series at IBC 2011, Mr Nagpal lamented what he called the high taxes levied against commercial DTH operators
and the bandwidth restrictions he claims are strangling their ability to add channels and HD. With six commercial DTH platforms and the publicly funded Dordashan service, operators are competing in a market where 120 million homes are signed up to Pay TV, with nearly a million new subscribers per month. It’s a market with a huge middle class. "A number like a million would surprise you in Europe, it doesn't surprise us in India," says Mr Nagpal. He compares DTH to the telecoms industry, which he left to head up Tata Sky about a year ago. "Its a technology based service in a fragmented market with small bits of ARPU around the country." And that ARPU is getting even smaller. “We have the lowest prices in the world and the lowest ARPU in the world. "I have to build packages that are even cheaper. You can only differentiate through the quality of your service and brand. You have to keep investing in these.” Bandwidth is a real challenge in this already fragmented market. "We have 24 states and so many languages and dialects, we have to create channels to meet the demand." This would be several hundred channels and Mr Nagpal predicts 900 Indian channels in three years, competing for bandwidth that can support only 200 to 300. Not to mention HD. "You need HD and there's going to be push TV which also consumes bandwidth.” So are India's DTH platforms locked in a death spiral, dragging each other down with lower and lower prices and profits? "I haven't seen many industries where more than 2 to 3 (dominant players) survive," he says. "Consolidation is going to happen, whether its 2 months or 6 months." Mr Nagpal doesn't intend for Tata Sky to be eaten in the consolidation shakedown, but nor does he see his platform as just a shark, feasting on others’ failures. "We are here to stay." Tata Sky’s preferred here to stay landscape would include much less regulation and lower taxes. "We will sort out our own competition issues, we don't need government to regulate them.” According to Mr Nagpal, its regulations that are restricting bandwidth expansion. Taxes speak for themselves.
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