IndianMascot
Core Member
By December, the television distribution sector—cable operators and direct-to-home (DTH) companies—has to meet the phase 3 digitization deadline. Close to 39 million TV households in urban areas in over 7,000 towns and cities will be covered in this phase.
In phases 3 and 4, with the latter covering the entire country by 31 December 2016, cable and DTH companies are required to install between 80 million and 100 million set-top boxes to convert analogue homes into digital ones.
Digitizing households in phases 3 and 4 will require an investment in the range of Rs.9,000-10,000 crore. The burden will be shared by cable and DTH companies, but the latter’s lament is that finding money for an industry reeling under accumulated losses of close to Rs.18,000 crore won’t be easy. While bank funding or promoter support may be available, there are some inherent issues that DTH companies grapple with.
For starters, DTH has a long break-even cycle. It is capital-intensive and asset-heavy. The set-top boxes have been subsidized by the companies since their launch. Together, the six DTH operators in India have invested close to Rs.28,000 crore. It’s been more than 11 years since the country’s first private DTH operator—Dish TV from the Zee group—launched operations. Over the years, five more companies entered the fray, adding to the competition. These were Tata Sky, Airtel digital TV, Videocon d2h, Sun Direct and Reliance Digital TV. Today, the sector has 52 million connections. But, according to some estimates, only 32 million of them are active.
What’s eating DTH operators - Livemint
