[Satellite Today Web Exclusive – 6-10-08] Bharti Airtel, one of India’s largest telecommunications companies, wants to expand its business and is setting its sights on India’s burgeoning satellite pay-TV market.
    Bharti Airtel already serves about 62 million cellular customers in India and plans to use that base and its well-known brand to launch direct-to-home (DTH) services before the end of 2008, said Atul Bindal, president of telemedia services at Bharti Airtel.
    “We believe that we have an immense opportunity in the booming Indian DTH market,” Bindal said. “After all, today, India is the third largest cable and satellite market in the world. The changes in consumption habits, coupled with regulatory pressures, have propelled it to start migrating to digital platforms with a measure of success.”
Bindal, spoke about the telco’s plans in the satellite arena.

Via Satellite: How do you view the market opportunity for Bharti Telemedia in the DTH market in India?

Bindal: We believe that we have an immense opportunity in the booming Indian DTH market. After all, today, India is the third largest cable and satellite market in the world. The changes in consumption habits, coupled with regulatory pressures, have propelled it to start migrating to digital platforms with a measure of success. In direct-to-home broadcasting there are three operators — one public sector and two private sector players. There are an estimated 4.5 million DTH subscribers among the two private sector operators — a number which has doubled in the last year. This phenomenal growth has been driven by regulatory requirements and consumer demands for higher quality of TV picture and sound and better, more transparent service. It is expected that by 2010, 16 percent of an estimated 100 million conditional access system households will migrate to DTH television platforms.

Via Satellite: What are Bharti’s plans in this area?

Bindal: In the current market scenario, pay-per-view and interactive content are the only two content differentiators possible in DTH, and this is where Airtel will seek to leverage its competitive strength of customer experience. This is what Airtel stands for and delivers. It is because of this differentiation that Airtel has been able to progress and grow across segments, and it is this which will lead our growth in DTH.

Via Satellite: What levels of growth in the subscriber base are you looking for throughout the next 12 months?

Bindal: We will aim to acquire a dominant share of the new DTH subscriber growth of 5 million expected next year.

Via Satellite: What are the biggest challenges in terms of growing the subscriber base?

Bindal: The two biggest challenges facing the growth of the Indian DTH market are [cost and content exclusivity].
The cable television-viewing subscriber has to see value for money in migrating from his existing cable television connection to a digital television connection. For this migration, the two drivers are the one-time entry cost and the monthly subscription cost which have to be made low and attractive. Additionally, the cost of content has to be made affordable for the subscriber.
Globally DTH operators have content exclusivity, which helps the operator differentiate its service. However in India, government regulations do not permit content exclusivity. We need to look at innovative ways of offering content to customers.

Via Satellite: What are your expectations for average revenue per user (ARPU)?

Bindal: ARPUs by their nature are market driven and we will not focus directly on that but choose to keep our sights on delighting customers with unparalleled customer experience. Even though the current cable television consumer in India is used to paying only $4 to $6 a month for pay-TV subscription, a figure which is 10 to 12 times higher in developed markets, we strongly expect him to opt for the superior DVD-quality picture and sound that DTH transmission gives, along with the transparency and higher service levels that Bharti Airtel will provide.

Via Satellite: How important will services such as personal video recorders (PVR) and high-definition TV (HDTV) be in your plans?

Bindal: We will be launching the PVR service within the first year of operations. HDTV channels are not yet available in India, and as and when they are available, Airtel DTH will be ready to offer it to its customers and is already working on these technologies. Both PVR and HD would be premium services on Airtel DTH, as it is elsewhere in the world, and would definitely be a competitive differentiator.

Via Satellite: When do you expect the operation to be profitable?

Bindal: The DTH business is a long gestation project across the world, and we expect the same to be true in India as well. However Airtel, through its mobile services, has demonstrated that paradigms can be changed and the path to profitability shortened through innovative business strategies.

Via Satellite: How do you see the digital television landscape changing in India throughout the next 12 months?

Bindal: The Indian DTH industry will be an exciting space in the near term with an expected rapid growth of subscriber base in the next 12 months. Three things are already driving the Indian market for digital delivery of TV signals to homes. Firstly, you have the growth of high-end TV sets like LCD and plasma sets which need high-quality digital signals for a good viewing experience Secondly, you have regulatory requirements of conditional access system rollout, service standards, foreign investment limits, etc., which are providing impetus for the cable industry to adopt digitization Thirdly, you have growing consumer awareness where today’s consumer is demanding superior TV-viewing quality and service.