NSR: DTH Remains Largest Satellite Bandwidth User, but Growth Uncertain

[Satellite TODAY 09-29-10] A total of 113 DTH operators provided television services to more than 130 million subscribers in 2009, a 14 percent increase from the prior year, according to NSR‘s report, “Global Direct-to-Home (DTH) Markets, 3rd Edition,” released Sept. 28.
    Despite increasing pressure on margins, NSR expects total DTH subscribers to reach 217 million by 2019 as developed economies reach saturation after analog switchovers. “The industry generated a staggering $70 billion in subscription revenue at a blended ARPU of $45. For satellite operators, the demand for over 850 transponders maintains DTH applications as the single largest satellite bandwidth consumer,” the report said.
    While current figures are promising for DTH operators, the future is not as certain, said NSR Senior Analyst Prashant Butani, who projected that DTH subscriber growth will move further away from developed economies and towards South Asia and Eastern Europe over the next year. “The pay-TV industry as a whole is becoming extremely competitive, be it over-the-top television in North America, digital terrestrial television in Europe or low-cost DTH platforms in Africa and India. As far as subscriber growth is concerned, the balance of power has shifted further East with countries like Poland, Russia and India at the forefront. Financially, operators are being forced to rely on advertising and value added services, which will result in considerable pressure on margins.”
    Despite the growth, the report shows that North America’s DTH subscriber additions are beginning to show signs of slowing down. In Europe, Scandinavian providers have lost subscribers to competitive platforms in the United Kingdom, where 80 percent of premium DTH subscribers are driven by HD and DVR services.
   Similar patterns have emerged in other regions, said Butani. “While operators in the Middle East emerge from a major consolidation, those in Central and Eastern Europe head towards a similar end in a struggle for profitability. Lastly, sub-Saharan Africa is starting to mimic South America as smaller low-cost platforms emerge in populous countries to challenge the incumbent. In Southeast Asia, government entities have blocked entry of DTH operators in an attempt to shield national providers. Even a seemingly simple assumption that growing subscribers adds to profitability is negated by India, where platforms are losing money for every new subscriber because of subsidies.”

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NSR: DTH Remains Largest Satellite Bandwidth User, but Growth Uncertain

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