Consolidation and greater foreign interest forecast for Indian DTH sector

Increased foreign participation is inevitable and consolidation in India’s direct-to-home (DTH) satellite TV market is likely in the next two to five years, according to new research from Screen Digest.

The proposed easing of foreign involvement limits in Indian broadcasting ventures from 49% to 74% will, according to the report, see more international players enter India’s DTH market – following what has been a successful ‘litmus test’ by way of News Corporation’s stake in the Tata Sky platform.

DTH in India has experienced a 108% compound growth rate since its 2005 launch with Dish TV and its initial subscriber base of 750,000. As of the end of 2010, India’s six DTH operators – Dish TV, Sun Direct, Tata Sky, Reliance Big TV, Airtel Digital and Videocon d2H – now host about 30 million subscribers between them.

“At the end of 2010, India’s DTH base accounted for 21% of the world’s pay satellite subscriber base,” says Aravind Venugopal, analyst – television, Screen Digest. “By 2014 it will cross the 50 million mark; bigger than both North America and Western Europe.”

Despite this, India’s DTH subscriber revenues accounted for just 1% of global pay-TV subscriptions revenue in 2010 – though Screen Digest suggests India’s share will increase to 2.7% by 2014.

Ultimately, says Mr Venugopal, “high DTH content and hardware subsidies and low ARPUs lead to excessive losses, and so consolidation is inevitable in the long run.” While he says it is impossible to predict which of the DTH operators would either fold or merge, Screen Digest certainly “expects some movement in this direction in the next two to five years.”

Cable TV remains the dominant pay-TV distribution platform in India, with a 75% market share compared to satellite’s 25%. However, the average revenue per satellite subscriber is set to overtake cable ARPUs in India and, says Screen Digest, will grow in tandem with the economy – at a compound annual growth rate of 8% between 2010 and 2014.

The analysts are careful to point out this forecast could, however, deviate should analogue switch off happen within this five year time frame. The Telecommunications Regulatory Authority of India (TRAI) has proposed that all 83 million analogue cable homes transition to digital by 2013, way before the official date for terrestrial analogue switch off, which Screen Digest believes, has now been put back to 2017.

Source: Rapidtvnews.com