Future of DTH

This refers to the article “The DTH Revolution” ( Business Line, January 18), where the author talks about the growth opportunities and challenges faced by the DTH industry in India. The article predicts that the next wave of DTH customers will be from rural India, highlighting the way mobile telephony has revolutionised the village lifestyle and explaining how can DTH change it further.

A closer look at the realities in rural India shows a bleak setting for DTH sector to grow. The majority of India’s villages still lacks quality power, with many hamlets still not connected with grid supply.

Most of the mobile telephone towers established in the rural areas by the telecom companies run on gensets because of unavailability of power. Also, we all know about the pathetic condition of the rural populace, the bulk of which often doesn’t even have money to buy two proper meals a day.

A television set, as such, can be termed a luxury product for the rural population, in general. Expecting them to invest them further on DTH equipment and monthly rentals for 2-3 hours of viewing may not be a logical proposition, at least as of now. Also, the DTH sector faces intense competition.

There are an average of seven players in the sector, each trying to outplay the other. This has resulted in rising of average Subscriber’s Acquisition Costs (SAC) and lowering of Average Revenue Per User (ARPU). If such a trend continues, the profitability of the whole sector will be affected, resulting in a lose-lose situation for all players. According to data available, till now no DTH player has reported net yearly profits.

The way forward is consolidation in the industry, as it happened in the telecom sector. To sustain in the business, companies need more and more customers, so that their fixed costs are apportioned over a larger subscriber’s base.

To achieve this in a short time, the inorganic growth option will definitely help. This will help bring down costs; reduce some amount of competition and thus companies may able to sustain longer.

Source: The Hindu Business Line

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