[Satellite News 08-17-09] Recent Indian DTH subscriber growth, may be offset in the long-term by excessive market regulation, said Vivek Couto, executive director of regional pay-TV analyst firm Media Partners Asia (MPA).
    Couto told Satellite News that despite Indian DTH operators adding around 3.5 million net subscribers in the first half of 2009, current market conditions still leave satellite companies vulnerable to cable competitors. “The trouble in India is that there is no reward for innovation,” said Couto. “ARPUs are trending at 160 rupees [$3.35] per month. Sun Direct is at 80 rupees [$1.68] and Tata Sky is at 250 rupees [$5.24] a month. But to make sustained profits you need ARPUs in excess of 300 rupees ($6.28), and the regulation and price competition impedes that. So while a couple of operators have a great technical platform and some have great marketing and tiering, essentially all five can utilize some of the same cost rationalization, rollout PVRs, do PPV. This means there is no major differentiation on any one aspect. If DEN, Hathway and WWIL get funding, we still believe that cable will be the more viable mass market profitable play in the long term. Most of the Indian DTH platforms will only generate sustained cash after 2014.”
    Despite a global recession, pay-TV markets across Asia appear to be holding up well. In an untitled report released by MPA, which studied the region’s top 40 pay-TV operators, Sun Direct did particularly well, adding more than 1 million subscribers in the first half of this year. Bharti Airtel added 740,000 subscribers, Reliance Big TV added 677,000, Tata Sky added 670,000 and Dish TV added 500,000 subscribers.
    The subscriptions take the combined customer base of Asia’s top 40 operators to 65.3 million, around a third of the region’s installed pay-TV base. MPA forecasts indicate that these leading operators will end the year with 70.7 million customers, implying annual net additions of 11.3 million and close to 20 percent annual growth. Competition in Asia’s pay-TV market is growing with IPTV services finding their way to the region. “There is no competitive DTH-IPTV situation in Asia. Telekom Malaysia may bring some pressure to bear on Astro in Malaysia, but we still see Astro forging ahead with its mass-market focus and self produced branded channels. In Japan, NTT’s IPTV service has outperformed both cable and DTH,” said Couto.
    For the overall region, the report gives mostly good news. “The most significant finding is that spending is robust and ARPU/profits are up for most part,” Couto said. “Subscribers on cable and DTH, respectively, are growing in China and India, while ARPUs, profits and next-generation digital TV is growing in Australia, New Zealand, Japan, Korea and Taiwan,” he said.
    Reliance Communications President Mahesh Prasad is optimistic about the report’s findings, and he believes in the market’s long-term potential. “There are around 125 million television households in India, of which around 75 million to 85 million homes are connected by either cable or satellite services. The other 40 million to 50 million households are not connected at all. India’s annual television sales stand at around 14 million sets a year and is growing at a healthy pace. Therefore, there is enough room for all the players to flourish. Between these two market factors and cable TV households looking to upgrade to digital, the potential for DTH is huge,” said Prasad.