Is DTH industry going the Mobile way? [Media Monday]
It all started with Dish TV costing Rs 5000 as installation charges with Rs. 350 monthly subscription cost for mere 100 odd channels! Today the scenario is changed- After almost 7 years since it’s launch DTH industry is growing rapidly. We have big names like Dish, Tata, Airtel, Sun Direct, Videocon, BIG (Reliance), Doordarshan etc fighting to get a hold in this nascent market with huge potential. And as one can see the competition is actually going to the level of getting brutal- today we can see DTH companies selling Set Top Boxes for mere Rs. 800-900 with 6 months free subscription and that too when their balance sheets are still in red, even after a good growth rate.
There are few similarities in the way DTH industry is growing and the way Mobile Industry was revolutionized. However, the situation is not exactly the same but let’s try to draw some conclusion here.
First check out the similarities-
- Both the markets (Mobile and DTH) thrive on the basis of subscription number and their is no boundary when it comes to urban or rural subscribers.
- In both the industries, ARPU is way low in India than industry standards across the Globe. But huge market potential gives a rosy long-term picture.
- There are very big players competing in both these industries. Names like Airtel, Tata and Reliance which know no other way but to lead the market are making this competition red-blooded.
- Subscribers enjoy the price war but get hassled when they see regulations such as “Mobile number portability” or “Set-Top Box portability” not getting passed by Govt.
- Current price war in Mobile industry is making subscribers suffer with bad call quality and is relying on upcoming technologies like 3G. This doesn’t show a rosy picture. Same thing is going to happen to DTH industry too, quality of signal during bad weathers is already pathetic and I wonder what will happen if prices are further slashed.
- In both the cases inaccurate Govt regulations can worsen the situation.
Now before we move ahead let’s also look at some fundamental differences which are there between DTH and Mobile Industry-
- Multiple players joined Mobile industry only after it got matured, and when it was growing there were only couple of players viz Airtel and Hutch. Price war started when Reliance got in with it’s CDMA services. Players like Aircel, Unitech, Videocon joined the race very late. On the other hand DTH industry is facing tough competition even at this immature stage.
- Unlike Mobile industry, DTH industry relies more on number of “households” rather than number of subscribers which is a matter of worry.
- DTH can grow like Mobile Industry provided that Indian TV homes go from single TV sets to multiple TV sets.
- DTH faces another competition from Internet TV’s and it’s like their own parent companies can kill them. For e.g. Airtel IPTV is a potential threat to Airtel DTH.
- As far as pricing goes it’s a good plus for subscribers. But lower prices degrades quality of service combined with pathetic customer support.
Do you think that this competition is good? Mobile Industry is already reeling under pressure with ARPUs going down almost everyday, will DTH industry be able to sustain itself? Only time will tell, what’s your thought on this?