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Contents

Contents............................................................................................ 1
List of Figures....................................................................................5
List of Tables.....................................................................................5
Chapter 1........................................................................................... 6
Research Methodology:..............................................................................6
Research Objective:.................................................................................................................6
Primary Objective:................................................................................................................6
Secondary Objective:............................................................................................................6
Chapter 2........................................................................................... 8
Introduction..............................................................................................8
Product Profile..........................................................................................................................8
Definition..............................................................................................................................8
DTH Service..........................................................................................................................9
Product History.......................................................................................................................10
Global Market.....................................................................................................................10
Indian Market.....................................................................................................................19
A Practical Perspective......................................................................................................22
Substitutes Of The Product.................................................................................................25
Product Technology And Service Processing......................................................................33
Industry Life Cycle..............................................................................................................39
Chapter 3......................................................................................... 41
Global Scenario........................................................................................41
Global.....................................................................................................................................41
Global Players........................................................................................................................41
Global Major Players...........................................................................................................42
Cable Vs. DTH - An Overview Of The World Scenario ............................................................43
PPV (Pay-Per-View).................................................................................................................50
Opportunities For Indian Vendors...........................................................................................53
Chapter 4......................................................................................... 54
Financial Analysis....................................................................................54
Revenue Structure:................................................................................................................54
Cost Structure:.......................................................................................................................55
PEST Analysis:.........................................................................................58
Political Factors......................................................................................................................58
Opposition By Political Parties:...........................................................................................58
Regulatory Role Of Government.........................................................................................60
Rules For Licensing.............................................................................................................60
FDI Cap In DTH To Go Up To 74%.......................................................................................63
Government Stability..........................................................................................................64
Economic Factors...................................................................................................................66
Currency Stability...............................................................................................................66
GDP (Gross Domestic Product)...........................................................................................67
Inflation Rate......................................................................................................................68
GDP Based On PPP..............................................................................................................69
Interest Rate:......................................................................................................................70

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Budget Impact On DTH Industry.........................................................................................71
Social Factors.........................................................................................................................73
Consumer Attitudes And Opinions......................................................................................73
Brand, Company, Technology Image..................................................................................73
Buying Access And Trends .................................................................................................74
Age Distribution And Lifestyle Trend..................................................................................74
Family Form And Population Shift.......................................................................................75
Cultural Implications Of DTH...............................................................................................75
Technological Factors.............................................................................................................77
DTH Technology.................................................................................................................77
Govt. Course Of Action Towards Technology.....................................................................78
Technology Incentives........................................................................................................79
About Ku-Band....................................................................................................................80
Satellite Introduction..........................................................................................................85
Satellite Footprint ..............................................................................................................85
Multi Dwelling Unit..............................................................................................................89
Michel Porter’s Five Force Analysis...........................................................91
Threats Of New Entrants........................................................................................................91
Access To Distribution Net-Work:.......................................................................................91
Advertising & Marketing Activity:.......................................................................................91
Regulation & Norms:..........................................................................................................91
Capital Requirement:..........................................................................................................92
Cost Design:.......................................................................................................................92
Industry Growth:.................................................................................................................92
Government Policy:............................................................................................................92
Threats Of Substitutes............................................................................................................94
Determinants Of Substitution Threat..................................................................................94
Costs Of Switching To Substitutes:.....................................................................................94
Availability Of Substitute Products:.....................................................................................95
Bargaining Power Of Suppliers...............................................................................................96
Satellite:.............................................................................................................................96
Set-Top Box:.......................................................................................................................97
Backward Integration:........................................................................................................97
Supplier Switching Cost:.....................................................................................................97
Forward Integration:...........................................................................................................98
Bargaining Power Of Buyers...................................................................................................98
Buyer Switching Costs:.......................................................................................................99
Brand Awareness:...............................................................................................................99
Availability Of Substitute Products:.....................................................................................99
Buyers’ Purchase Frequency:.............................................................................................99
Innovative Services:.........................................................................................................100
Inter Firm Rivalry..................................................................................................................102
No. Of Player In Industry:..................................................................................................102
Market Share:...................................................................................................................103
Industry Growth:...............................................................................................................104
Untapped Market:.............................................................................................................104
Promotional Activities:......................................................................................................104
Exit Barrier:......................................................................................................................105
Chapter 6.......................................................................................107
Driving Forces........................................................................................107
Internet Technology Applications:........................................................................................107
Long Term Industry Growth: ................................................................................................107
Product Innovations:.............................................................................................................107
Technological Changes:........................................................................................................108
Regulatory Influence:...........................................................................................................108

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Changing Societal Concerns, Attitude & Lifestyles:..............................................................108
Key Success Factors...............................................................................109
Innovative Services:.............................................................................................................109
Distribution:.........................................................................................................................110
Innovative Marketing:...........................................................................................................110
Technology:..........................................................................................................................111
Strategic Factors:...................................................................................111
Exploit Bottlenecks: .............................................................................................................111
Move First: ...........................................................................................................................112
Exploit Market Niche:...........................................................................................................112
Chapter-7 ......................................................................................113
Portfolio Models.....................................................................................113
BCG Matrix...........................................................................................................................113
Strategies Of Players:.......................................................................................................120
Suggested Strategy:.........................................................................................................124
GE9 Cell Matrix......................................................................................127
Industry Attractiveness:.......................................................................................................129
Business Strength:...............................................................................................................130
ADL (Arthur D. Little) Matrix...................................................................133
Competitive Position............................................................................................................133
Industry Maturity..................................................................................................................133
Diamond Model......................................................................................137
Government.........................................................................................................................137
Rules For Licensing:..........................................................................................................137
Trade Restrictions And Tariffs...........................................................................................138
Foreign Direct Investment:...............................................................................................140
Government Stability........................................................................................................140
Government Policy:..........................................................................................................140
Firm Strategy, Structure And Rivalry....................................................................................142
No. Of Players And Market Share:...................................................................................142
Industry Growth:...............................................................................................................142
Untapped Market:.............................................................................................................142
Promotional Activities:......................................................................................................143
Exit Barrier:......................................................................................................................143
Demand Condition................................................................................................................143
Related And Supported Industry...........................................................................................144
Related Industry:..............................................................................................................144
Supporting Industry:.........................................................................................................145
Factor Conditions.................................................................................................................147
Geographical....................................................................................................................147
Investment.......................................................................................................................148
Raw Material:....................................................................................................................148
Implication:.......................................................................................................................149
Value Chain Of Industry..........................................................................150
Value Chain Analysis:...........................................................................................................150
Value Chain..........................................................................................................................151
OT Analysis............................................................................................156
Opportunity:.........................................................................................................................156
Geographical, Export, Import:...........................................................................................158
Industry Or Lifestyle Trends:.............................................................................................158
Threats.................................................................................................................................160
Government Policy/Regulations:.......................................................................................161
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IT Developments:.............................................................................................................161
Competitor Intentions:......................................................................................................161
Seasonality, Weather Effects:...........................................................................................161
Lack Of Possibility Of Growth:..........................................................................................161
Annexure.......................................................................................163
TRAI Regulation.....................................................................................163
Bibliography................................................................................... 173

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List of Figures
Figure 1 Arther C. Clarck Model for DTH service...................................9
Figure 2 A Worldwide Major DTH Service Provider MAP by Pro Brand
International Inc...............................................................................10
Figure 3 Arthur C. Clark: futurist and author......................................11
Figure 4 An IPTV Connection Diagram of BSNL IPTV Service................29
Figure 5 DTH Industry Life Cycle (2003-2009).....................................39
Figure 6 A Worldwide Broadcasting Service Area of Major Players.......43
Figure 7 Revenue Structure, data taken from ACE Equity application
Software. Which Show Major portion of Subscription..........................54
Figure 8 Cost Structure of the industry playes (approx.).....................55
Figure 9 Exchange Rate....................................................................66
Figure 10 GDP (Gross Domestic Product)...........................................67
Figure 11 Inflation Rate....................................................................68
Figure 12 GDP based on PPP.............................................................70
Figure 13 Interest Rate.....................................................................70
Figure 14 Zee Network Satellite Service Area.....................................86
Figure 15 SUN Network Service Area.................................................87
Figure 16 The Multi Dwelling Unit Service to Multiuser.......................89
Figure 17 BCG Matrix .....................................................................120
Figure 18 Industrial Life Cycle.........................................................134
Figure 19 ADL (Arthur D. Little) Matrix.............................................134
Figure 20 Michel Porter’s Diamond Model........................................137
Figure 21 DTH Service Supply System..............................................151

List of Tables
Table 1: Global Players.....................................................................41
Table 2 : Market Share....................................................................103
Table 3: Players Subscription Figures..............................................113
Table 4 GE9 Cell Matrix Position .....................................................129

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S. V. Institute of Management, KADI 2008-10
Chapter 1

Research Methodology:

Research Objective:

Primary Objective:

An In Depth Study Of DTH Industry In India.

Secondary Objective:
 To Find Out Over All Market Condition Of DTH Industry.
 To Study The Political, Economical, Social, And Technological Factors Affecting Indian
DTH Industry.

 To Compare The Market Competition Among Different Players.

 To Find Out Opportunity & Threats In Indian DTH Industry.

 To Study The Reason Behind Growth Of DTH Market.

Information Needs:
 Product History.
 Related To Substitute Product.
 Application Of Product.
 Global Position Of The Market.
 Information About Different Brands In India.
 Various Companies’ Market Share.
 Macro Environmental Factor.
 Size And Growth Rate Of The Market And Economy.
 Opportunity And Threats.

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Research Design:
 Descriptive Study

Data Collection & Sources:


 Based On Secondary Data:
 Newspaper- Business Standard, Times Of India, Economic Times
 Magazines- Fortune India, Business World, Dalal Street, Capital Market,
Marketing Mastermind, TV Veopar Journal.

 References Books – Strategic Management, Marketing Management, Service


Marketing, Strategic Marketing.

 Websites.- Www.Mib.Nic.In , Www.Indiabroadband.Net

Limitation:
 Data Is Based On Secondary Sources. So, It May Be Insufficient.

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Chapter 2

Introduction

Product Profile

Definition

The Direct-To-Home (DTH) Service:

In Technical Point Of View: “A Digital Satellite Service That Provides Television


Services Direct To Subscribers Anywhere In The Country. Since It Makes Use Of
Wireless Technology, Programs Are Sent To The Subscriber's Television Direct
From The Satellite, Eliminating The Need For Cables And Any Cable
Infrastructure.”1

In Customer Point Of View: “The Reception Of Satellite Programs With A Personal


Dish In An Individual Home. And An Individual Set Top Box Empowering You To
Pick & Choose You Bundles Of Choice And Pay For What You Watch.”2

The Original Concept Of Satellite Television Started Over 64 Years Ago Almost,
Direct To Home (DTH) Satellite Receivers Were Developed In The Early 1980’s.

DTH Offers Better Quality Picture Than Cable TV And Stereophonic Sound Effects.
It Reaches Even Those Places Where Cable Is Not Available. This Service Is Also
Providing Value-Added Services That Include Tale-Text, Dual Audio For Channels,
Parental Control, Electronic Program Guide And Radio Channels.

DTH Has Also Allows For Interactive TV Services Such As Movie-On-Demand,


Internet Access, Video Conferencing And E-Mail. If You Want To Record Your
Favorite Programs You Can Get A Free DVR (Digital Video Recorder) Receiver.
Main Disadvantage Of DTH Is Fading Of The Signal Due To Rains. Heavy Rains
May Result Into Outage For A Few Minutes In The DTH Signal.

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Direct Broadcast Satellite (DBS) Is A Term Used To Refer To Satellite
Television Broadcasts Intended For Home Reception, Also Referred To More
Broadly As Direct-To-Home Signals.3

DTH Service

Direct-To-Home (DTH) Service Refers To Distribution Of Multi-Channel TV


Programs In Ku Band By Using A Satellite System For Providing TV Signals Direct
To Subscribers' Premises.

DTH Provides Subscribers The Advantage Of Geographical Mobility Meaning


Thereby That Once A Customer Purchases DTH Hardware, He/She Can Continue
To Use The Same Unit Anywhere In India.

DD DIRECT+ Is India's First And Only Free To Air (FTA) Direct-To-Home Service
Being Provided By Prasar Bharati. Apart From Prasar Bharati - A Public Service
Broadcaster, M/S Dish TV India Ltd. M/S Tata Sky Ltd, And M/S Sun Direct TV Pvt.
Ltd. M/S Reliance Big TV Pvt. Ltd., M/S Bharti Telemedia Ltd. M/S. Bharat Business
Channel Ltd. And Videocon India Pvt. Ltd. Have Also Been Granted License For
Operating DTH Service.

The Eligibility Conditions Provide For Total Foreign Equity Holding, Including FDI/
NRI/ OCB/ FII, In The Applicant
Company Not To Exceed 74%,
And Within The Foreign Equity, It
Also Provides That Applicant
Company Must Have Indian
Management Control With The
Majority Representatives On The
Board As Well As Chief
Executive Of The Company
Being Resident Indians.

Figure 1 Arther C. Clarck Model for DTH service. 1


S. V. Institute of Management, KADI 2008-10
Product History

Global Market

Figure 2 A Worldwide Major DTH Service Provider MAP by Pro Brand International Inc.

Global Timelines To The Future4

While Today's Hot DTH Marketplace Makes For An Exciting Story, This Is An
Industry With A History Unknown To Most. It Is A Story Of An Industry Which Was
Never Supposed To Exist. An Industry Born Out Of The Genius Of A Stanford
University College Professor And Publicized By Ham Radio Conversations. An
Industry That Defied All Odds To Grow From The Backyards Of Techies And Early
Adapters To Today's Multi-Billion Dollar First-Line Competitor To The Cable
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Monopoly In America. And, It Is The Story Of An Industry Comprised Of Thousands
Of Entrepreneurs Who Kept The Dream Alive During Long Periods Of Traumatic
Political And Marketplace Upheaval.

Come With Us Now As We Look At The People, The Events, And The Evolution Of
The Technology.

1945 Arthur C. Clark's Dream

The Entire Satellite Communications Industry


-- Not Just The DTH Segment -- Can Trace Its
Common Heritage To One Man. That Man Is
The Noted Futurist And Author Arthur C. Clark.
Long Before Clark Was To Take Us To The
Farthest Reaches Of The Universe In His
Legendary Epic "2001: A Space Odyssey," He Figure 3 Arthur C. Clark: futurist and
author
Penned A Paper Entitled, "Extraterrestrial Relays." Published In October 1945 By
"Wireless World Magazine," This Article Advanced A Theory That World-Wide
Communications Could Be Accomplished By Placing Three Space Platforms Into
Special Orbits 22,300 Miles Above The Equator. Clark Explained That At This
Altitude, The Platforms Would Orbit The Earth At Exactly The Same Speed As The
Earth Turned -- Thus They Would Appear To Remain Motionless In Space When
Viewed From The Ground.

Obviously, Clark's Paper Was Far Ahead Of Its Time. The World Had Yet To See
The Widespread Development Of TV -- Let Alone The Ability To Place Any Object,
Much Less A Large Communications Platform, Into Orbit. The World Would Have
To Wait A Dozen Years Before The First Man-Made Object, Sputnik, Found Its Way
Into Orbit. This Basketball-Sized Satellite Carried A Transmitter Which Delivered A
Non-Stop Morris Code-Based Political Message Touting The Technological
Superiority Of The Soviet Union. Spurred Into Action, America Embarked On One
Of The Largest Technology Development Programs In History. The $20-Plus Billion
Space Program Saw The United States Not Only Put Men On The Moon, But Also

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Lead To The Development Of Intelsat, An International Consortium Which
Deployed A Network Of Geostationary Communications Satellites. In Fact, The
Very First Live Global Television Broadcast - The Realization Of Clark's Dream -
Came As Neil Armstrong Stepped Onto The Moon In July Of 1969.

By The Mid-1970's, This Same Satellite Technology Was Being Widely Utilized By
Private Companies Such As Western Union, AT&T, And RCA To Support The
Rapidly Growing Telecommunications Needs Of The United States. In Addition To
Telephony/Data Circuits And Program Links For Television Networks, The
Geostationary Satellite Was About To Play A Key Role In The Growth Of The Cable
Television Industry -- At The Time A Nascent Industry Involved In The Delivery Of
Over-The-Air TV Signals To Subscribers.

HBO Moves To Satellite, Taylor Howard Builds A Dish

In 1976, Premium Programr HBO Made History When It Initiated Satellite Delivery
Of Programming To Cable Headends With The Heavyweight Boxing Battle
Dubbed, "The Thriller From Manila." The Move By HBO Was Followed Quickly By
Ted Turner, Who Began Uplinking His Heretofore Unknown Atlanta UHF-TV
Station, Now Known As WTBS. Turner Branded It America's Station, And The
Superstation Was Born. 1977 Saw Pat Robertson Launch The First Satellite-
Delivered Basic Cable Service -- CBN Cable Network -- The Predecessor Of The
Family Channel.

While All This Was Being Done With Cable Operators In Mind, Stanford University
Professor Emeritus H. Taylor Howard Was Also Busy In His Garage. Howard, A
Lead Scientist On Several Interplanetary NASA Probes Along With Key
Communications Systems On The Apollo Program, Was Soon To Build The First
Consumer DTH System In America. In Turn, Howard Also Became The First
Consumer To Actually Pay (Or Attempt To Pay) HBO Directly For Its Signal (The
Check Was Returned With A Letter Explaining That HBO Only Sold Its Signal To
Cable Operators).

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How Did The World Find Out About Taylor Howard's Invention? Well, As An
Amateur Radio Operator, He Shared His Knowledge With Fellow "Hams" Around
The World. This Was Backed Up With A Simple How-To Manual On Satellite TV
Published By Professor Howard. As The Techies Began To Grasp The Capabilities
Of Satellite TV, A Small Group Of Entrepreneurs Moved From Hobbyist To
Businessperson. These Pioneers -- Many Operating Out Of Their Garages -- Gave
Birth To An Industry Which Sold Approximately 5,000 Systems In 1980. Each Of
These Systems, Boasting An Antenna 12 Feet Or More In Diameter, Fetched A
Whopping $10,000. The Journey Towards The DTH Industry Of Today Had Begun.

1981 - 1985 Dish Fever Grows

The DTH Industry Grew Quickly From Its Modest Beginnings. As Each New System
Was Installed, The Word Of Mouth Advertising Grew For The Industry. Obviously
The Early DTH Systems Were Very Large, Thus The Simple Act Of Having One
Installed Drew The Attention And Interest Of The Neighborhood. Once Non-
Dishowners Experienced The Diversity Of Satellite-Delivered Programming (New
Cable Services Were Now Launching At A Rapid Pace) Coupled With The
Unsurpassed Audio And Video Quality Offered By A DTH System, The Fever Began
To Spread Across The Land.

For Satellite TV To Move Beyond The Techies And Early Adapters, Into The
Mainstream Consumer Marketplace, Three Things Had To Happen: 1) The Price
Had To Be Reduced; 2) The Reliability And User Friendliness Of The Hardware
Had To Increase Significantly And; 3) The Legality Of Dish Ownership By Private
Citizens Had To Be Clearly Established. Driven By The Entry Of Several Larger
Manufacturers, The First Two Conditions Were Met Rather Easily. The Price Of A
Complete DTH System Rapidly Fell From The $10,000 Level In 1980 To Under
$3,000 By The Beginning Of 1985. At The Same Time, The Overall Reliability Of
The Hardware Improved Dramatically And The Early Systems Which Were Really
Little More Than Experimental Units Transitioned Into Stylish State-Of-The-Art
Microprocessor-Controlled Video Tuners Comparable In Size To A VCR. As For The
Legal Status Of The DTH Industry, That Issue Was Settled In 1984 When President

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Ronald Reagan Signed The Cable Act In To Law. This Legislation Clarified The
Right Of American Citizens To Own A Satellite Dish, And It Also Contained
Provisions Establishing The Legal Structure By Which Program Providers Could
Require Those Dish Owners To Pay For Reception Of Their Services.

The DTH Industry Will Remember 1985 For Its Rollercoaster Ride Of Highs And
Lows. From A Shipment Perspective, The Chart Clearly Shows That Satellite TV
Was Hot -- Some 735,000 Systems Were Produced In The United States. Some
Months In The Latter Part Of The Year Saw In Excess Of 80,000 Units Sold. An
Industry Which Began The Year With Less Than A Million Consumers Ended The
Year With Over 1.7 Million Satisfied Customers. Indeed, To The Outside Observer,
The DTH Industry Appeared To Be One Of The Hottest Technology Bets Available.
In Fact, This Success Was Setting The Industry Up For A Dramatic Tumble -- One
Which Would Take Years To Overcome.

With The Cash Registers Ringing Wildly In Satellite Dealerships Across The
Country, The Industry Literally Found Itself Out Of Control. Hundreds Of New
Dealerships Were Opening Every Month -- With Many Of These New Retailers
Having Little, If Any True Understanding Of The Product And/Or Long Term
Commitment To The Business. The Satellite Dish Had Become The Pet Rock
Industry Of The Year.

All Of This Was Happening In An Environment Where Programming Was Free --


The Consumer Made A One-Time Hardware Purchase And Enjoyed Well In Excess
Of A Hundred Channels Of High Quality Video, Including Every Basic And Premium
Cable Service, At No Charge. As 1985 Wore On, The Signs Of Change Began To
Emerge. Several Cable Programming Services Announced Plans To Encrypt Their
Satellite Feeds Under The Authority Granted To Them By The 1984 Cable Act.

Clarity In Hindsight Tells Us That The DTH Industry Should Have Prepared Itself
And Its Consumers For The Sea Change Which Was Coming. However, For Any
Number Of Reasons, Most Retailers Either Refused To Believe That Signal

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Scrambling Would Ever Occur -- Or Chose To Ignore The Train Which Was Bearing
Down On Those Selling The Promise Of "Free TV Forever."

January 15, 1986.The DTH World Changes Forever

January 15, 1986 Began Like Any Other Day In America. The Lines Were Long At
Satellite Dealerships, And Sales Were Good. As The Day Wore On, Suddenly The
Video On HBO Was Replaced By Unrecognizable Lines And The Audio Was Gone.
At That Very Moment, The Hardware-Based DTH Industry Transitioned Into One
Which Would Be Driven By The Sale Of Software - Programming.

The Effect Of Scrambling One Service Out Of Many Dozens -- Albeit A High Profile
Service Such As HBO -- Should Have Been A Short-Term Manageable Market
Development, Especially In Light Of The Fact That Decoders (Then Manufactured
By MA/COM, Later To Become Part Of GI) For The Signal Were Available, And HBO
Stood Ready To Sell The Service To Any DTH Consumer. This Was Not To Be
However, As The News Of Scrambling Hit The National Media With A Message
That, "....The Skies Have Gone Dark For Dishowners." This Highly Inaccurate
Message Was Then Reinforced By Large Scale Negative Advertising Campaigns
By Cable Operators Which Depicted Satellite Dishes As Expensive And Ugly
Contraptions Which Now At Best Would Make For Olympic-Sized Birdbaths.

The First Thing To Happen Was The Wholesale Defection Of Retailers Who Had
Entered The Business In 1985 In Search Of The Easy Sale. This Was Followed By A
Bitter Internal Industry Battle Over Scrambling Which Soon Saw Existing DTH
System Owners Drawn Into The Fight To Preserve The Free Airwaves. Worse Yet,
The Industry Allowed This Battle To Spread To New Consumers As They Entered
Dealer Showrooms To Consider The Purchase Of A Dish. It Even Gave Birth To
Three Nightly Satellite-Delivered Talk Radio Networks Dedicated To
Discussing/Debating The Changing Industry. The Political Fireworks Generated By
These Shows Demonstrated The Fact That The Industry Was Approaching A
Meltdown.

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The Impact On Sales Of New DTH Systems Was Dramatic. From 735,000 Systems
In 1985, The Industry Plummeted To 225,000 Units. An Estimated 60 Percent Of
All Retailers In The Industry On January 1, 1986 Were Gone As The Year Came To
A Close. Fire Sales Dominated The Marketplace As Hardware Manufacturers And
Distributors Either Left The Business Or Fought To Generate Sufficient Cash Flow
To Hang On. Clearly, The DTH Industry Was Rapidly Approaching A Fork In The
Road On The Way To Survival Or Oblivion.

December 2, 1986 The First Signs Of Unity

For The Home Satellite Industry To Survive, It Was Clear To Many Company
Executives That The Political Disagreements Had To Somehow Give Way To
Conscience Building And Industry Unity On Key Long-Range Marketplace Issues.
This Process Began On December 2, 1986 In Anaheim, CA With The Founding
Banquet For The Satellite Broadcasting And Communications Association (SBCA).

The SBCA Was Formed As A Result Of The Merger Of Two Trade Organizations --
The Society Of Private And Commercial Earth Stations -- (SPACE) And The Direct
Broadcast Satellite Association (DBSA). SPACE Had Represented Primarily The
Manufacturers, Distributors, And Retailers Of DTH Systems. DBSA Was Comprised
Of Companies Such As RCA Americom, AT&T, Hughes, Comsat, And USSB -- All Of
Which Were Interested In High Power DBS.

The New Organization, Which Was Led In Its First Year By Co-Chairman Taylor
Howard Of SPACE And Dr. John Clark Of RCA Americom Faced The Immediate
Challenge Of How To Restore Unity To A Fractured Industry. They Quickly Moved
To Create A Board Of Directors Which Would Offer Equal Representation To All
Segments Of The DTH Industry -- Including The New Players -- Satellite
Programmers. For The First Time, These Programmers Would Have An
Opportunity To Directly Participate In The Decision Making Of An Industry They
Served -- Something They Were Not Afforded In The Cable Trade Organizations Of
The Day.

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As The New Satellite Trade Association Took Shape During The Early Part Of
1987, The First Sparks Of Optimism Returned To The Satellite Business. Little Did
The SBCA Leaders Know That Perhaps The Industry's Biggest Challenge Ever
Would Surface In A Matter Of Months.

1987 - 1993 Piracy Dominates DTH

Shipments Of DTH Hardware Rebounded In 1987 From The Depths Of The 1986
Slump. This Upswing In Sales Was Driven By The Advent Of Integrated
Receiver/Decoders Which Combined The Decoder Module With The Receiver Unit,
And Perhaps Even More Importantly, The Arrival Of Program Packages. The
Grouping Of Encrypted Services (All Of Which Had Chosen To Use The
Videocipher II (VC II) Scrambling System) Into Attractively Priced Packages Was A
Major Step Forward In The Sale Of Programming To The Consumer Who
Previously Was Required To Make Several Phone Calls To Purchase Individual
Programming Services.

Just As Stability Was Returning To The Industry, The Videocipher II System Came
Under Heavy Attack From Hackers. Within Months Of The First Rumors Of A Break
In The System, The Worst Fears Of The Industry Were Realized As Signal Piracy
Exploded Across The Nation.

The Impact Of Piracy On The Growth Of The Legitimate Industry Was Significant.
In Years Such As 1990, The DTH Industry Shipped Approximately 380,000 New
Systems, But Only 77,553 Net VC II Authorizations Were Recorded. Thus, Not
Only Were New Systems Being Pirated At Time Of Installation, Many Of The
Existing Systems In The Field Was Also Being Modified To Steal Programming
Services. Ultimately, Of The 1.9 Million Videocipher II Units Manufactured
Between 1986 And The Middle Of 1990, Less Than 500,000 Were Legally
Receiving Services.

Clearly, Satellite Signal Theft Posed A Serious Threat To The Industry's Access To
Programming. In 1987, SBCA Leadership Was Contacted By The Executives Of
The Major Hollywood Movie Studios To Discuss The Emerging Problem. The
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Message From Hollywood Was Clear - While It Strongly Supported The DTH
Industry And Pledged To Work Closely With The SBCA, The Piracy Issue Required
Immediate Action. Failure To Effectively Deal With The Issue Would Leave The
Movie Studios With No Choice But To Discontinue Licensing Its Movies For
Distribution To DTH Owners.

With This Message In Mind, The Industry Embarked On A Two-Front Effort.


General Instrument Corporation (Which Had Now Acquired The Cable Home
Communications Division Of MA/COM) Commenced A Series Of Electronic
Countermeasures To Shut Down Illegally Modified Boxes While Also Beginning
Work On A Second Generation Scrambling System Dubbed The Videocipher II Plus
(VC II+). The SBCA Took The Lead In The Public Fight Against Signal Theft
Through The Creation Of An Anti-Piracy Task Force. This Unit, Funded By Member
Companies, Was Comprised Of Several Retired Senior FBI Agents And A Former
Federal Prosecutor. They Organized A Nationwide Network Of Private
Investigative Firms To Collect Evidence Of Illegal Activity On The Part Of
Retailers. This Evidence Then Served As The Basis For Law Enforcement Raids
And Civil/Criminal Action In Numerous States Across The Country. The Task Force
Also Engaged In Extensive Industry Education And Public Relations Efforts To
Explain The Dangers Of Satellite Signal Theft.

The Summer Of 1990 Saw The Introduction Of The VC II+ System. Plans Were
Then Developed For The Orderly Transition To The New Encryption System And
The Shutdown Of The Old VC II Data Stream. The DTH Industry Realized That
Legitimate Consumers Must Be Protected During The Move To A New Scrambling
System, And Every Consumer Who Was Legitimately Subscribing To Programming
Services Received A VC II+ Decoder Module At No Cost.

With Its Legal Customers Accommodated, The Programming Services Then Began
Transitioning Exclusively To The New System In The Fall Of 1992. The Movement
Resulted In The Dramatic Rise In Net Decoder Authorizations In 1993 And 1994
As Pirate Consumers Were Forced To Purchase New Modules And Begin Paying
For The Services They Desired.

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1994 Ready For DBS

The DTH Industry Had Emerged From Its Second Major Crisis, And Now, This
Industry Which Had Begun So Humbly, Stood On The Threshold Of A New Era, The
Dawn Of DBS. While 1994 Marked The Arrival Of Medium And High-Power Ku-
Band DBS Service, It Was Also Represented One Of The Best Years Ever For The
C-Band Industry.

With Piracy Effectively Under Control, And Consumer Interest In Satellite TV


Growing As A Result Of Initial Marketing Of DBS Hardware, C-Band Sales Boomed.
In August Of 1994, Some 85,000 Systems Were Shipped, Representing Perhaps
The Best Single Month In The 14 Year History Of The Industry. As 1994 Drew To A
Close, Over 600,000 New Systems Had Been Shipped, And Nearly 2.2 Million
Consumers Were Authorized For C-Band DTH Service. While C-Band Activity Has
Slowed, And The Total Authorized Households Had Dropped, C-Band Still
Represents Almost 2 Percent Of All Television Households. And With The
Introduction Of 4DTV, The Prospects Of The C-Band Segment Of The DTH Industry
May Improve.

As The DTH Industry Celebrates The 20th Anniversary Of Taylor Howard's


Invention, It Is Clear That Satellite TV Is Here To Stay. The Industry Survived Not
Only Because It Has A Good Product Which Offers Unique Programming At A Good
Value -- But Because Many Of Those Early Pioneers Simply Wouldn't Let The
Dream Slip Away. Those Pioneers Are Now Leading This Industry Into The Digital
Information Age Of 21st Century.

Indian Market

Indian DTH Space Is A Rapidly Rising Industry. Since The Time, It


First Arrived In India, More And More New Players Are Joining The Bandwagon.
Because Of Arrival Of New Entrants, This Industry Has Become Very Competitive
Which Ultimately Results In Customers Having More Benefits And Options.

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Indian Timelines:

December 1996:
The United Front Government Under Prime Minister Deve Gowda Issues A
Notification Saying That A License Has To Be Obtained For Ku-Band DTH Services.
Many Companies, Including Star TV, Apply For A License. But Government Delays
The Process.

26th March 1997:


Star TV Holds A Press Conference In Delhi Detailing Their DTH Plans. Star TV Asia
CEO Gary Davey And Others Attend The Function Where A Live Demo Is Given.

3rd April 1997:


The Then Communication Minister Beni Prasad Verma Signs A Policy Setting The
Terms And Conditions For Granting Licenses To DTH Players. Two Holidays Follow
And It Cannot Be Notified.

11th April 1997:


Gowda Government Falls As Congress Withdraws Support.

May 1997:
I&B Minister Jaipal Reddy Introduces The Broadcast Bill In Parliament Which Gets
Referred To A Joint Parliamentary Committee.

July 1997:
The United Front Government Under Prime Minister I.K. Gujaral Issues Another
Notification Banning Maintaining Or Keeping Equipment Capable Of Receiving TV
Signals Over 4800 Mhz (Ku-Band) Till A Comprehensive Broadcast Law Is Passed.

November 1997:
Gujaral Government Falls.

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December 1998:
I&B Minister Pramod Mahajan With The BJP-Led Government Says The Issue Of
DTH Cannot Wait Till The Passage Of The Broadcast Bill. A Decision Has To Be
Taken Soon.

January-February 1999:
The Prime Minister Atal Behari Vajpayee Sets Up A Group Of Ministers (Gom),
Comprising Ministers Of I&B, Communications, Defence, Finance And Home, To
Come Up With Recommendations On DTH.Promod Mahajan Said That DTH Is As
Powerful As A Nuclear Bomb.

February-April 1st Week 1999:


Lot Of Study Papers On DTH Compiled For Gom, Which Fails To Meet Formally
Even Once. But Hopes Of Favorable Recommendations Abound As I&B Minister
Admits In Private He Hopes To Make An Announcement In Parliament Once It
Reassembles After A Fortnight's Recess.

17 April 1999:
The BJP-Led Government Loses The Vote Of Confidence On The Floor Of The
Lower House Of Parliament.

October 1999:
National Democratic Alliance Comes To Power In The Centre

18 October 2000:
Jaitley Sworn In As I & B Minister Give Indication As They Will Move Fast On The
DTH Front, Though Cautiously. DD Wants An Exclusive License For Two Years.

15 March 2000:
Murdoch Pushes For DTH Service In India

10 April 2000:

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Jaitley Said Prime Minister A B Vajpayee Had Constituted A Committee Chaired By
The Union Minister To Work Out Details Of Direct-To-Home (DTH) Services And
Uplinking Facilities.

4 October 2000:
Sushama Swaraj Again Takes On As I & B Minister, Promises Television-For-Family

16 October 2000:
Star TV's James Murdoch, Bruce Churchill And Peter Mukherjee Meet Swaraj

29 October 2000:
Gom Committee Headed By Home Minister L K Advani Finalises Most Of The
Recommendations For Lifting DTH Ban. Law Minister Arun Jaitley Asked To Frame
Legal Ramifications On DTH.

30 October 2000:
Gom Committee Recommends Opening Up DTH. I & B Minister Sushama Swaraj
Say That She Will Submit A Note To The Indian Cabinet For A Final Decision.

November 2000:
Cabinet Approves Lifting DTH Ban. Issues Notification.

A Practical Perspective

The Initial Excitement In Nov. 2000 Has Largely Been Transformed By A Realistic
Look At The Guidelines For DTH Service In India.

The Key Features Of The Guidelines Are:

1. The Total Foreign Investment Cannot Exceed 49 Per Cent (Now Its 74%).
2. No Broadcast Or Cable Company Can Own More Than 20 Per Cent.

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3. The Applicant Company Will Have To Pay An Entry Fee Of Rs 100 Million, Pay
10 Per Cent Annual Revenue And Execute A Bank Guarantee Of RS 400 Million
For The Duration Of The 10 Years License.
4. Violation Of License Conditions Can Include Revocation Of License And / Or
Penalty Of Up To RS 500 Million.
5. The Licensee Will Have To Set Up An Indian Earth Station In 12 Months And
Provide Access To Various Content Providers On A Non-Discriminatory Basis.
6. The Set Top Boxes Required To Receive The Encrypted Signals Will Have To Be
Open Standard Boxes.
7. The DTH License Cannot Be Used For Other Modes Of Communication
Including Voice Fax, Data Internet Unless Specific Licenses For These Value
Added Services Have Been Obtained From The Competent Authority.

On The Face Of It, The DTH Regulations Are Quite In Tune With Media
Policy Of The Ruling Alliance. However, There Are Many Pitfalls In The
Policy Some Of Which Are Outlined Below.5

1. A Modest Entry Fee Of RS 100 Million And A Bank Guarantee Of RS 400 Million
Has Been Mandated With No Restriction On The Number Of DTH Operators In The
Country. However, The DTH Operator Will Have To Pass On 10 Per Cent Of
Revenues As Annual Fees To The Government. It Is Assumed That This Is Gross
Revenue Without Deduction Of Expenses And Is Not 10 Per Cent Of Net Profit
Which Would Have Been More Equitable.

2. The Period Of License Is For 10 Years And Non Exclusive. However, There Is No
Provision For Automatic Renewal Of The License After 10 Years Based On
Performance Of The DTH Operator.
3. No Broadcasters Or Cable Television Company Is Allowed To Own More Than
20 Per Cent Of DTH. This Has Supposedly Been Done To Prevent Emergence Of
Vertically Integrated Monopoly. This Is Despite The Worldwide Move Towards
Convergence And Even The Provisions Of The Convergence Bill!

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4. The DTH Operator Shall Have To Follow The Advertising And Program Code Of
Doordarshan And Maintain A Video Record For 90 Days Of Advertisements And
Programs. A DTH Operator Who Does Not Own Content Will, Like The Present
Cable Operators, Be Solely Responsible For The Implementation Of Advertising
And Program Code. No Liability Has Been Put On The Content Providers At All.

5. Apart From Open Architecture For Stbs, The Government Has Mandated That
DTH Operators Should Not Discriminate Between Various Channels Wanting To
Get On The Network. This Is A Welcome Development As It Will Enable Content
Providers To Be Available On All Competing DTH Platforms.

6. I&B Ministry Will Be The Licensing Authority Until One Is Set Up. There Is No
Mention In This Notification About The Broadcast Regulatory Authority As
Mandated By The Supreme Court In Cricket Association Of Bengal Judgment In
1995.

7. The DTH Operator Is Bound To Carry All Prasar Bharati Channels On Most
Favorable Terms Offered To Any Other Channel. No Mention Is Made About The
Present Requirements Under The Cable Act To Carry A Minimum Three
Doordarshan Channels On Prime Band, Despite The Fact That Carriage Of All
Prasar Bharati Channels May Not Be Commercially Desirable. Of Course, It Will
Not Be Easy To Convince Any Government To Leave It To The DTH Operator To
Carry Only Specific Prasar Bharati Channels.

8. The DTH Operator Is Allowed To Carry Value Added Services Such As Fax,
Voice Or Broadband As Long As It Gets Clearance From The Right Competent
Authority. While The Government Is Willing To Allow Data, Fax And Broadband
Service From The DTH Operator, The Stipulations Of Getting Clearance From The
Right Competent Authority Without Creating A Single Window Approach Will In
Effect Delay Provision Of Value Added Services By The DTH Operator And Is
Against The Provisions Of The Convergence Bill Planned To Be Introduced In
Parliament In May 2001.

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The Only Positive Announcement After The Government Notification So Far Has
Been From Videsh Sanchar Nigam Limited (VSNL) Which Plans To Set Up A
Neutral DTH Facility Using Its Large Number Of Earth Stations To Give
Opportunity To Broadcasters Wishing To Join A Common Platform.

Substitutes Of The Product

1.1 CABLE OPERATOR

Definition

Cable Operator Means Company Providing Access To Cable And Satellite


Channels Within A Given Region Or Area.

Cable Service

A Private Cable Operator (Also Known As PCO) Is A Private Small Independent


Cable Company Competing Directly With Multi System Operators. Pcos Typically
Offer Services To Multi-Family Dwellings, Gated Communities, Hotels And Other
Small Businesses. In Some Small Municipalities The City May Be A PCO.6

1.2 IPTV

Definition

Internet Protocol Television (IPTV) Is A System Through Which Digital


Television Service Is Delivered Using The Architecture And Networking Methods
Of The Internet Protocol Suite Over A Packet-Switched Network Infrastructure,
E.G., The Internet And Broadband Internet Access Networks, Instead Of Being
Delivered Through Traditional Radio Frequency Broadcast, Satellite Signal, And
Cable Television (CATV) Formats.7

Internet Protocol Television (IPTV) – Is Like Cable TV, But It Uses A


Broadband Connection To The Internet Instead Of Cable For The Delivery Of
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Video Services. IPTV Works On Your TV With A Set-Top Box That Accesses
Channels, Subscription Services, And Movies On Demand. The Advantage Over
Cable Is That The Communication Can Be Two-Way, Making Customized
Programming And Interactive Media Possible Without An Additional Connection.8

IPTV Services May Be Classified Into Three Main Groups: Live Television, Time-
Shifted Programming, And Content (Or Video) On Demand. It Is Distinguished
From General Internet-Based Or Web-Based Multimedia Services By Its On-Going
Standardization Process (E.G., ETSI) And Preferential Deployment Scenarios In
Subscriber-Based Telecommunications Networks With High-Speed Access
Channels Into End-User Premises Via Set-Top Boxes (STB) Or Other Customer-
Premises-Equipment (CPE)

Internet Protocol Television (IPTV)9

The Policy On Internet Protocol TV (IPTV) Was Announced On 8th September This
Year By The Government. This Opened Up The Doors For Another Mode Of
Distribution Of Signals By Close To 400 Permitted Satellite TV Channels Through
The Telecom Networks.

State-Owned Telecom Companies Bharat Sanchar Nigam Ltd. (BSNL) And


Mahanagar Telephone Nigam Ltd (MTNL) Are Not Generally Considered
Formidable Competitors To Private Sector Players. But A New Offering Franchised
To A Delhi-Based Company Could Change Things — Not Perhaps In The Telecom
Space But For Direct-To-Home (DTH) Service Providers. The Challenger: IPTV Or
Internet-Protocol TV.

This Gives A New Digital Visual Experience To The Indian Viewer With Added
Value To Cater To The Ever-Persisting Demand Of The Subscribers For New And
Interactive Services. This Also Provides Increasing Opportunities To Create
Diverse Business Models Both For The Broadcasters As Well As For The Platform
Service Providers. The Policy On IPTV Offers Greater Clarity On The Issues
Involved, And Both The Telecom Operators And The Cable Operators Are Able To

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Provide An IPTV Service Which Is To Be Regulated As Per Their Respective
Licensing Conditions.

Under The Policy, The Content Will Be Regulated As Per The Program And
Advertisement Codes As Prescribed Under The Cable Act, Which Takes Care Of
Several Apprehensions Including Those With Respect To Provisioning Of Obscene
Content. It Defines The Liability For Violations Of Content Codes And How They
Will Be Dealt With And Takes Care Of The Concerns Relating To National Security.
The Policy Also Enables Multi System Operators (Msos) And Cable Operators
Along With Broadcasters To Provide Content To Telecom Licensees Providing IPTV
Services. The Policy Also Enables IPTV Service Providers To Create Its Own
Content Except For The News And Current Affairs. With The Government
Committed To Expanding The Broadband Penetration, IPTV Is Slated To Play A Big
Role In Distribution Of Content.

In Standards-Based IPTV Systems, The Primary Underlying Protocols Used Are:

• Live TV Uses IGMP Version 2 Or IGMP Version 3 For Ipv4 For Connecting To
A Multicast Stream (TV Channel) And For Changing From One Multicast
Stream To Another (TV Channel Change).

• VOD Is Using The Real Time Streaming Protocol (RTSP).

• N-PVR (Network-Based Personal Video Recorder) Is Also Using The Real


Time Streaming Protocol (RTSP).

IPTV Players

MTNL IPTV10

Mahanagar Telephone Nigam Ltd (MTNL) Introduced Concept Of IPTV


(Internet Protocol Television). It Was Named As Aksh-Tel, Which Was A
Combination Of IPTV And V Spyk Which Is A Video Phone Calling Service. MTNL
Started This Service In Collaboration With Aksh Optifibre Ltd. In This Strategic Tie-

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Up, MTNL Would Be Providing Infrastructure Whereas The Partner Company Will
Be Focusing Upon Content Delivery Network.

Subscribers Of This Service Will Have The Facility Of IPTV, VOIP And 50 MB Of
Broadband Services At Relatively Low Monthly Rental Of Rs 499. There Won’t Be
Any Extra Charge On Set Top Box And Services. Users Will Also Be Getting 50 Fee
Calls In VOIP. This Service Will Come Quite Handy For MTNL Broadband
Subscribers. V Spyk Is Actually A Real Time Videophone Calling Service Which
Enables Real Time Communication. It’s Between Two Users On A More
Personalized Level. Company Is Expecting To Reach 4 Million Customers In Two
Major Cities Of Delhi And Mumbai.

In IPTV Technology, Telephone Lines Are Used To Provide TV Programming To


Viewers. IPTV Will Be Offering 102 Channels Apart From Broadband And
Telephone Services. Other Attractive Features Are Video On Demand And Time
Shift Television. MTNL Has Additional Advantage Of Being A First Mover And
Having Four Million Landline Users At Its Disposal. IPTV Will Be Relatively Cheaper
Than DTH Services. Also, Because Of It Being A New Technology There Are Many
Opportunities To Spread It And Experiment With It For The Purpose Of Improving
Services In The Long Run. Users Will Also Be Delighted To Have All Three Major
Services Of Telephone, Broadband And Television Coming From A Single Line.
There Are No Chances Of Rain Playing Havoc With IPTV Connections. Another
Distinct Possibility Is Option Of Watching Television Channels On The PC Without
A TV Tuner. IPTV Is Also The Only Service To Provide Time Shift TV Feature.

Service Features11

TV Service Which Is Delivered Using IP (Internet Protocol) Technology, Which Is


The Same Technology Used In Internet Services. In This Service The TV Channels
Are Encoded In IP Format And Delivered To TV Using A Set Top Box. The IP TV
Service Also Includes Video On Demand Services Which Is Is Similar To Watching
Video CD's / DVD's Using A VCD / DVD Player. Movies, Instructional Videos And
Other Content Shall Be Available To Customers In The IP TV Services.

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All The Three Services Work Together.
• Normal Telephone Service
• Broadband Internet Service
• IPTV Service
The Bouquet Of TV Channels And Video On Demand Services Shall Be Available
Initially During Trials. Other Services / Content Shall Be Introduced Progressively.

The Main Components In Delivering This Service Are:

• TV And Content Head End - Where The TV Channels Are Received And
Encoded. Also Other Content (Video's) Are Stored At Head End. MTNL Has
Signed Agreement For This With M/S IOL Broadband.
• Delivery Network - Which Is MTNL's Broadband Network And MTNL's
Telephone Line. (Landline).
• Set Top Box (STB) - The Set Top Box Is Required At The Customer Location
For Converting The IP Signal Back To TV Signal. The STB Shall Be
Connected Between MTNL Broadband Modem And Customer's TV. The STB

Figure 4 An IPTV Connection Diagram of BSNL IPTV


Service
Shall Be Provided By M/S IOL.
• MTNL Landline Telephone With Broadband Connectivity Is Required For This
Service.

BSNL IPTV12

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There Is No Denying The Fact That IPTV Is Fast Becoming Popular
Amongst Indian Population. That’s Precisely The Reason, More And More
Companies Are Coming Up With IPTV Technology. One Of The Giants Of Indian
Telecom World Is BSNL. This Government Owned Behemoth Has Also Come Up
With Its IPTV Services. BSNL Enjoys A Great Deal Of Popularity Amongst Indian
Masses, Mainly Because Of Its Services In Rural And Semi-Urban Areas. BSNL IPTV
Works On A Simple Concept And That Is Providing TV Connection Through Phone
Line. Content Server Plays An Important Role In IPTV World. The Content Server
Of BSNL Is Based In Kolkata And All The Channels, Customer Requests, Music,
Movies And Other Entertaining Things Are Stored In This Content Server.

On A More Technical Level, BSNL IPTV Channels Need To Have Minimum Of


4Mbps Of Bandwidth. BSNL Has Already Launched Its Services In Many Parts Of
The India And Planning To Spread All Across The Country. The Basic Plan Of Iptv
Starts With Rs. 250/. Other Value Added Services Are Video On Demand Etc For
Which One Has To Shell Out Extra Money. Apart From That, There Are Several
Other Packages Suitable For All Sorts Of Requirements. Few Packages Also
Include Some Free Videos Per Month.

Other Charges Are Installation And Activation Charges Of Rs. 1600/-, Security
Deposit Of Rs. 1500/-, Fixed Monthly Charge For SED (Per Month) Of 100/-, IPTV
Basic Charge Per Month Of 150/-, Monthly Modem Rent Of Rs. 90/- And Modem
Purchase For Rs. 600/-. BSNL Is Planning To Acquire One Lakh Customers By The
End Of This Fiscal. For This Purpose, They Have Already Appointed Five
Franchisees Namely; Smart Digivision Pvt Ltd, IOL Broadband Ltd, Maharashtra
Knowledge Company Ltd (MKCL), Aksh Optifibre, And Times Broadband Ltd.
Company Is Also Expecting To Serve 150,000 Customers By Coming March.

Reliance IPTV13

Reliance Communications Plans To Launch Internet Protocol Television (IPTV) By


The End Of This Year. It’s A New Technology Which Will Increase More Options For
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Users And Make Their TV Viewing Experience Even More Enjoyable. IPTV
Technology Uses Telephone Lines To Deliver Content To The Subscribers Through
IP Technology. Initially, This Technology Was Just Used In Internet Telephony For
Delivering Voice Over. IPTV Also Offers Video On Demand And Digital Video
Recording Services. Reliance Communications Is Planning To Launch It In 10
Cities And Thereafter Depending Upon Its Popularity And Usage, More Cities Will
Be Included. The Software For IPTV Will Be Provided By Microsoft.

If Truth Be Told, Not Many People In India Have Great Number Of Entertainment
Opportunities. These People Often Go Back To Tried And Tested Television
Channels To Watch Their Favorite Programs And Get Themselves Entertained.
IPTV Is A Breakthrough Technology In That Regard. It Is Sure To Make Things
Even More Enjoyable And Entertaining For People Who Resort To Television. IPTV
Provides This Unique Option Of Using All The Three Services From Single Line.
This Makes Things Quite Appealing And Convenient For The Users. Reliance
Commands A Great Presence In Several Verticals Of Business And No Doubt, IPTV
Service Will Be Able To Delight The Customers.

Reliance IPTV Is Quite Simple To Use And Provides Many Features. Attractive
Features Include, Digital Video Recording, Instant Channel Change, Option Of
Using Your Own Language, Home Media Sharing, Pause And Play Live TV And
Parental Controls. Also On The Anvil Is Big Library Of Content, Real Time Video On
Demand, Catch Up TV, Trick Play Functions, Movie Previews, And Search Option
Among Others. Set Top Box And Remote Control Are Other Instruments Users
Would Be Getting. With All These Features, It’s An Eagerly Awaited Service
Launch. Reliance IPTV Is Also Expected To Provide New Direction To TV
Entertainment.14

Airtel IPTV15

Airtel Has Launched Its IPTV (Internet Protocol Television) Services To DELHI NCR
Customers.

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On The 19th Airtel Introduced 'Triple Play' Where Customer Now Just Need To
Book A Single Order And Like DTH 1+1 Team Of IO (Installation Officer) And
Support Technician Will Get IPTV, Broadband And Landline Installed. This Will
Mean That Customer Just Need To Book One Appointment For All Their Digital
Solutions Provided Via Broadband.

Some Notes On Airtel IPTV You May Wish To Know:

• EPG Is Similar To DTH, However Is One Not Higher With 'Time Shift TV'. This
Allows Currently 12 Channels To Be Viewed Like DVD (Play, Pause, Fwd Etc)
For Past One Week Customer May Have Missed. Later On These Will Be
Increased To 48 Channels.
• 1+1 Team Will Ensure AWESOME Customer Service To Its Customers.
• IPTV Connection Requires Four Port Modem And If You Somehow Have
Managed To Take The Cable Out Insert It In Port 4 Only, Else IPTV Will NOT
Work.
• IPTV Works On 8 MBPS And Is Dedicated Line, Hence It Means You Will Not
Have Any Effect On Your Broadband Either Increase Or Decrease. Also,
Landline, IPTV And DSL Are Independent Services, Which Means If One
Affected It Won't Necessarily Mean That Other Will Be Disrupted.
• Modem Is The Hub So If That Is Damaged Then Both IPTV And Broadband
Will Be Affected.
• Airtel Is Not Allowed To Do External Cabling For IPTV Due To Various
Reasons. Hence, Please Don't Ask That Installation Officer To Do It For You
Forcibly, It May Cause Him To Lose His Job. If You Really Want External
Cabling Please Contact Your Local Electrician.
• Two Modes Of Connectivity, Existing Customer Can Upgrade And New
People Can Go For Very Reasonable Triple Play

1.3 Head-End In The Sky (HITS)16

To Speed Up The Process Of Digitalization Of Cable Services Located In Non-CAS


Areas Of The Country, The Government Is In The Process Of Taking A View On
The Recommendations Of TRAI On The Issue Of The Proposed Policy Framework
On The Headend In The Sky (HITS) Mode Of Delivery Of Content To The Cable
Operators.

This System Will Enable The Packaging Of Content In Digital Form At The Level Of
HITS Operator Who Will Uplink It To A Satellite To Be Received By The Cable
Operators And Thereafter Distributed In Digital Mode Through Cable Network. The
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Key Factor In Conversion Of Small Time Cable Operators To The Digital Mode Of
Delivery Is The Investment Required To Be Made In The Setting Up Of Digital
Headend, CAS And SMS.

Introduction Of HITS Services Can Help Reduce These Costs For The Small Time
Cable Operators, Thus Speeding Up The Transition And Will Also Be Beneficial To
Consumers. By Introduction Of Addressability It Will Help Bring Transparency In
Cable Operations To The Benefit Of All Stakeholders Including The Government.

1.4 Mobile TV17

Mobile TV Is Another Mode Of Distribution Of TV Channels.

A Joint Group Of Ministry Of I & B And Dot Has Considered The Regulatory And
Licensing Issues Of Mobile TV And Held That If Mobile TV Services Are To Be
Provided In The Broadcasting Mode Using Transmission Of Terrestrial Or Satellite
Broadcast Signals, They Will Come Under The Domain Of MIB And Will Be
Governed By The Applicable Laws.

If They Are Provided By Using The Infrastructure Of Telecom Service Provider,


They Will Fall In The Domain Of MCIT. The Report Of The Joint Group Is Being
Examined. The Government Has Also Made A Reference To The TRAI For Policy
Framework For Opening Up The Sector For Private Participation. TRAI Has Placed
Its Draft Recommendations On The Website To Enable The Government Put A
Policy Framework In Place. It Is Also Under Consideration Whether Prasar Bharati
Infrastructure Can Also Be Shared With Mobile TV Service Providers For The
Benefit Of Both.

Product Technology And Service Processing18

Television Receive-Only

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The Term Television Receive-Only, Or TVRO, Arose During The Early Days Of
Satellite Television Reception To Differentiate It From Commercial Satellite
Television Uplink And Downlink Operations (Transmit And Receive). This Was
Before There Was A DTH Satellite Television Broadcast Industry. Satellite
Television Channels At That Time Were Intended To Be Used By Cable Television
Networks Rather Than Received By Home Viewers. Satellite TV Receiver Systems
Were Largely Constructed By Hobbyists And Engineers. These TVRO System
Operated Mainly On The C Band Frequencies And The Dishes Required Were
Large; Typically Over 3 Meters (10 Ft) In Diameter. Consequently TVRO Is Often
Referred To As "Big Dish" Or "Big Ugly Dish" (BUD) Satellite Television.

TVRO Systems Are Designed To Receive Analog And Digital Satellite Feeds Of
Both Television And Audio From Both C-Band And Ku-Band Transponders On FSS-
Type Satellites. The Higher Frequency Ku-Band Systems Tend To Be Direct To
Home Systems And Can Use A Smaller Dish Antenna Because Of The Higher
Power Transmissions And Greater Antenna Gain.

TVRO Systems Tend To Use Larger Rather Than Smaller Satellite Dish Antennas,
Since It Is More Likely That The Owner Of A TVRO System Would Have A C-Band-
Only Setup Rather Than A Ku Band-Only Setup. Additional Receiver Boxes Allow
For Different Types Of Digital Satellite Signal Reception, Such As DVB/MPEG-2
And 4DTV.

The Narrow Beam Width Of A Normal Parabolic Satellite Antenna Means It Can
Only Receive Signals From A Single Satellite At A Time. Simulate Or The Vertex-
RSI TORUS Is A Quasi-Parabolic Satellite Earth Station Antenna That Is Capable Of
Receiving Satellite Transmissions From 35 Or More C- And Ku-Band Satellites
Simultaneously.

Direct To Home Television

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Today, Most Satellite TV Customers In Developed Television Markets Get Their
Programming Through A Direct Broadcast Satellite (DBS) Provider, Such As DISH
TV Or DTH Platform. The Provider Selects Programs And Broadcasts Them To
Subscribers As A Set Package. Basically, The Provider’s Goal Is To Bring Dozens
Or Even Hundreds Of Channels To The Customer’s Television In A Form That
Approximates The Competition From Cable TV. Unlike Earlier Programming, The
Provider’s Broadcast Is Completely Digital, Which Means It Has High Picture And
Stereo Sound Quality. Early Satellite Television Was Broadcast In C-Band - Radio
In The 3.4-Gigahertz (Ghz) To 7 Ghz Frequency Range. Digital Broadcast Satellite
Transmits Programming In The Ku Frequency Range (10 Ghz To 14 Ghz). There
Are Five Major Components Involved In A Direct To Home (DTH) Satellite System:
The Programming Source, The Broadcast Center, The Satellite, The Satellite Dish
And The Receiver.

Programming Sources Are Simply The Channels That Provide Programming For
Broadcast. The Provider (The DTH Platform) Doesn’t Create Original Programming
Itself; It Pays Other Companies (HBO, For Example, Or ESPN Or STAR TV Or
Sahara Etc.) For The Right To Broadcast Their Content Via Satellite. In This Way,
The Provider Is Kind Of Like A Broker Between The Viewer And The Actual
Programming Sources. (Cable Television Networks Also Work On The Same
Principle.) The Broadcast Center Is The Central Hub Of The System. At The
Broadcast Center Or The Playout & Uplink Location, The Television Provider
Receives Signals From Various Programming Sources, Compresses These Signals
Using Digital Compression (Scrambling If Necessary), And Beams A Broadcast
Signal To The Proper Satellite. The Satellite Receives The Signal From The
Broadcast Station And Rebroadcast Them To The Ground. The Viewer’s Dish Picks
Up The Signal From The Satellite (Or Multiple Satellites In The Same Part Of The
Sky) And Passes It On To The Receiver In The Viewer’s House. The Receiver
Processes The Signal And Passes It On To A Standard Television. These Are The
Steps In Greater Detail:

Programming

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Satellite TV Providers Get Programming From Two Major Sources: International
Turnaround Channels (Such As HBO, ESPN And CNN, STAR TV, SET, B4U Etc) And
Various Local Channels (Sabe TV, Sahara TV, Doordarshan, Etc). Most Of The
Turnaround Channels Also Provide Programming For Cable Television, So
Sometimes Some Of The DTH Platforms Will Add In Some Special Channels
Exclusive To Itself To Attract More Subscriptions. Turnaround Channels Usually
Have A Distribution Center That Beams Their Programming To A Geostationary
Satellite. The Broadcast Center Uses Large Satellite Dishes To Pick Up These
Analog And Digital Signals From Several Sources.

Broadcasting Centers

The Broadcast Center Converts All Of This Programming Into A High-Quality,


Uncompressed Digital Stream. At This Point, The Stream Contains A Vast Quantity
Of Data — About 270 Megabits Per Second (Mbit/S) For Each Channel. In Order To
Transmit The Signal From There, The Broadcast Center Has To Compress It.
Otherwise, It Would Be Too Big For The Satellite To Handle.

The Providers Use The MPEG-2 Compressed Video Format — The Same Format
Used To Store Movies On Dvds. With MPEG-2 Compression, The Provider Can
Reduce The 270-Mbit/S Stream To About 3 Or 10 Mbit/S (Depending On The Type
Of Programming).

This Is The Crucial Step That Has Made DTH Service A Success. With Digital
Compression, A Typical Satellite Can Transmit About 200 Channels. Without
Digital Compression, It Can Transmit About 30 Channels. At The Broadcast
Center, The High-Quality Digital Stream Of Video Goes Through An MPEG-2
Encoder, Which Converts The Programming To MPEG-2 Video Of The Correct Size
And Format For The Satellite Receiver In Your House.

Encryption And Transmission

After The Video Is Compressed, The Provider Needs To Encrypt It In Order To


Keep People From Accessing It For Free. Encryption Scrambles The Digital Data In

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Such A Way That It Can Only Be Decrypted (Converted Back Into Usable Data) If
The Receiver Has The Correct Decoding Satellite Receiver With Decryption
Algorithm And Security Keys. Once The Signal Is Compressed And Encrypted, The
Broadcast Center Beams It Directly To One Of Its Satellites. The Satellite Picks Up
The Signal, Amplifies It And Beams It Back To Earth, Where Viewers Can Pick It
Up.

The Dish

A Satellite Dish Is Just A Special Kind Of Antenna Designed To Focus On A Specific


Broadcast Source. The Standard Dish Consists Of A Parabolic (Bowl-Shaped)
Surface And A Central Feed Horn. To Transmit A Signal, A Controller Sends It
Through The Horn, And The Dish Focuses The Signal Into A Relatively Narrow
Beam. The Dish On The Receiving End Can’t Transmit Information; It Can Only
Receive It. The Receiving Dish Works In The Exact Opposite Way Of The
Transmitter. When A Beam Hits The Curved Dish, The Parabola Shape Reflects
The Radio Signal Inward Onto A Particular Point, Just Like A Concave Mirror
Focuses Light Onto A Particular Point. The Curved Dish Focuses Incoming Radio
Waves Onto The Feed Horn. In This Case, The Point Is The Dish’s Feed Horn,
Which Passes The Signal Onto The Receiving Equipment. In An Ideal Setup, There
Aren’t Any Major Obstacles Between The Satellite And The Dish, So The Dish
Receives A Clear Signal.

In Some Systems, The Dish Needs To Pick Up Signals From Two Or More Satellites
At The Same Time. The Satellites May Be Close Enough Together That A Regular
Dish With A Single Horn Can Pick Up Signals From Both. This Compromises
Quality Somewhat, Because The Dish Isn’t Aimed Directly At One Or More Of The
Satellites. A New Dish Design Uses Two Or More Horns To Pick Up Different
Satellite Signals. As The Beams From Different Satellites Hit The Curved Dish,
They Reflect At Different Angles So That One Beam Hits One Of The Horns And
Another Beam Hits A Different Horn. The Central Element In The Feed Horn Is The
Low Noise Blockdown Converter, Or LNB. The LNB Amplifies The Signal Bouncing
Off The Dish And Filters Out The Noise (Signals Not Carrying Programming). The

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LNB Passes The Amplified, Filtered Signal To The Satellite Receiver Inside The
Viewer’s House.

The Receiver

Further Information: Set-Top Box (STB)

The End Component In The Entire Satellite TV System Is The Receiver. The
Receiver Has Four Essential Jobs: It De-Scrambles The Encrypted Signal. In Order
To Unlock The Signal, The Receiver Needs The Proper Decoder Chip For That
Programming Package. The Provider Can Communicate With The Chip, Via The
Satellite Signal, To Make Necessary Adjustments To Its Decoding Programs. The
Provider May Occasionally Send Signals That Disrupt Illegal De-Scramblers, As An
Electronic Counter Measure (ECM) Against Illegal Users. It Takes The Digital
MPEG-2 Signal And Converts It Into An Analog Format That A Standard Television
Can Recognize. Since The Receiver Spits Out Only One Channel At A Time, You
Can’t Tape One Program And Watch Another. You Also Can’t Watch Two Different
Programs On Two Tvs Hooked Up To The Same Receiver. In Order To Do These
Things, Which Are Standard On Conventional Cable, You Need To Buy An
Additional Receiver. Some Receivers Have A Number Of Other Features As Well.
They Pick Up A Programming Schedule Signal From The Provider And Present This
Information In An Onscreen Programming Guide. Many Receivers Have Parental
Lock-Out Options, And Some Have Built-In Digital Video Recorders (Dvrs), Which
Let You Pause Live Television Or Record It On A Hard Drive. While Digital
Broadcast Satellite Service Is Still Lacking Some Of The Basic Features Of
Conventional Cable (The Ability To Easily Split Signals Between Different Tvs And
Vcrs, For Example), Its High-Quality Picture, Varied Programming Selection And
Extended Service Areas Are Features Now Seen As An Alternative. With The Rise
Of Digital Cable, Which Also Has Improved Picture Quality And Extended Channel
Selection, The TV War Is Really Heating Up. Just About Anything Could Happen In
The Next 10 Years As All Of These Television Providers Battle It Out.

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Industry Life Cycle19
Subscribers (In
Year Millions)
2003 0.00
2005 1.00
2007 4.00
2009 18.70

Figure 5 DTH Industry Life Cycle (2003-2009)

Implication:

1. Introduction Stage

Seven Years Ago, Launching A Direct-To-Home Service Could Have Been A


Recipe For Disaster. Investment Costs Were Very High So Customers Had To Fork
Out Much More.

But Today, The Market Has Been Transformed: Prices Of The Dish And The Set-
Top-Box Have Crashed Through The Roof, Overall Investment In Putting Up A DTH
Infrastructure Has Dropped And Customers Are Also Reaping The Benefits Of
More Attractive Tariffs.

Just A Few Year Ago, When Star TV Made An Unsuccessful Attempt To Launch
DTH, The Same System Cost Rs 14,000 To Rs 15,000 At That Time A Cable
Operators Charging Rs. 1000 To Rs.2000 Deposit (For Cables And Other
Requirement) And Monthly Average Rs.175 (For Channel) Service. And Because
The Costs Were So High, Companies That Were Planning To Offer DTH Services
Hit On The Only Survival Strategy That They Could Think Of: Subsidies The Box At

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Rs 5,000, But Make It Up By Asking Customers To Fork Out A Steep Rs. 700 A
Month For The Basic Bouquet On DTH. But The Fall In Box Prices Have Helped In
Offering The Services At An Attractive Price, Which Is Expected To Start From As
Low As Rs. 100 For 38 Channels Going Up Depending On The Quality Of The
Channels Shown.20

As A Result, Siti Cable Is Looking At A Large Number Of Subscribers To Get


Hooked On To The DTH Channel. The Target Is To Rope In As Many As 1 Million
Subscribers In A Period Of 15 Months. This Certainly Isn't A Niche Product. What
Has Added To The Viability Is That The Upfront Cost Of Putting Up The DTH
Platform Has Also Fallen. We Are Investing Rs 250 Crore (Rs 2.5 Billion) On The
Project For 38 Channels And The Same Infrastructure Is Being Leveraged To Run
The Company's Head End In The Sky Infrastructure.

Even If We Assume That 50 Per Cent Of The Remaining TV Owners Do Not Have
The Cash To Go For Cable Services, There Are Still As Many As 20 Million
Households Waiting To Be Tapped. Many Of Them Live In Remote Areas, Isolated
Pockets Where Cable TV Is Unviable, And DTH Could Be The Only Answer.

2. Growth Stage
After The Introduction Growth Stage Comes. From The Above Graphical
Presentation We Can See That The Subscribers Of DTH Service Industry Is
Increase With Increasing Rate. Year Is Plating On “X” Axis And Subscriber Is On
“Y” Axis.

Here, Life Cycle Of Industry Is Interpreted With The Help Of Six Years Analysis. If
We Can Talk About Earlier Year Means 2004-05, Then At That Time There Was
Only One Player And Also Government Is Not Helping Like Today. And Also
Awareness Of This Service Is Not So Much.

After 2004-05, The Growth In Subscribers Is Increase. Because At That Time


There Were 2 New Companies Also Entered In The Market. And Also Awareness,
Life Style Of Our Country’s People Increase. After 2006-07, It Is Increase Very
Much. Because In 2008 There Were 10mn Subscribers.

So, We Can Say That This Industry Is On Growth Stage.

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Chapter 3
Global Scenario

Global

According To Latest Figures Released, DTH Pay-TV Revenues Are Growing At A


Faster Rate Than Subscribers. The Report Suggests That Revenues Will Rise From
$46 Bn In 2005 To $80 Bn In 2009.21 In An Interesting Revelation, The Report
Suggests That Growth Has Slowed Down In North America And Europe, Where
The Market Has Attained Maturity. According To Estimates, By The End Of 2008,
There Will Be 100mn Digital DTH Pay-TV Subscribers. The Launch Of Services In
China And India Will Make Asia The Fastest-Growing Market For DTH, The Report
Suggests.

Global Players22

Total Companies Profiled: 72 (Including Divisions/Subsidiaries - 80)

Table 1: Global Players

Region/Country Players

The United States 11


Canada 5
Japan 2
Europe 23
France 4
Germany 1
U.K. 5
Italy 1
Spain 1
Rest Of Europe 11
Asia-Pacific (Excluding
Japan) 28
Middle East 2
Latin America 8
Africa 1
Total 80
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Global Major Players23

APT Satellite Holdings Limited (Hong Kong)


Astro All Asia Networks Plc (Malaysia)
AUSTAR United Communications Limited (Australia)
BCE, Inc (Canada)
Chaparral Communications, Inc. (US)
DIRECTV Group, Inc. (US)
DREAM Satellite TV (Philippines)
Echostar Communications Corporation (US)
FOXTEL (Australia)
Intelsat, Ltd. (Bermuda)
JSAT Corporation (Japan)
MEASAT Satellite Systems Sdn. Bhd. (Malaysia)
Nahuelsat S.A (Argentina)
Norsat International Inc. (Canada)
Pace Micro Technology Plc (UK)
Optus Communications Pty. Ltd. (Australia)
Shaw Communications Inc. (Canada)
Shin Satellite Public Company Ltd. (Thailand)
Star Group Limited (Hong Kong)
Sky Italia (Italy)
Skylife (South Korea)
Sky Network Television Ltd. (New Zealand)
SINO Satellite Communications Company Ltd. (China)
Satmex (Mexico)
True Visions Public Company Limited (Formerly United
Broadcasting Corp) (Thailand)

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Cable Vs. DTH - An Overview Of The World Scenario

In The Wake Of The Opening Up Of The Earth And Skies (Literally) To Private
Operators, India Is All Set To See A "War Of The Accesses". With Very Few Large
Players, A Widespread Geography And An Extremely Rowdy And Unorganized
Cable Operator Set-Up, The Options Between DTH And Cable As Access Modes
Are Both Set To Woo The Ever Increasingly Discerning Indian Consumer.24

This Report Attempts To Provide An Overview Of The World Scenario And Draw
Some Parallel (If Any) To Our Country. I Have Tried To Collate Information From
Various Countries, All In Different Stages Of "Access Provision" Development.

GLOBAL25

Figure 6 A Worldwide Broadcasting Service Area of Major Players

USA

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In The US, There Are At Present Two Major DTH Providers. Directv And Echo Star.

Directv Provides A Series Of 225 Basic Channels And Premium Services. Directv
Subscribers Can Also Receive High Speed Internet Access Through Direct PC And
Direct Duo Services. Revenues For Fiscal 2000 For Directv Have Been Estimated
At $ 4.8 Billion. Directv Expects To Add Another Two Million Customers To Total
11 Million By Fiscal 2001.

Its Competitor, Echo Star Is Fast Catching Up With Directv. This Also Provides An
Equal Number Of Basic Channels And Premium Services. It Has Also Pioneered
Dual Focus Dish To Provide Local Channels. Echo Star Is Also Improving Its Fiscal
Performance. For The 3rd Quarter Of 2000, It Earned Revenues Of $ 698 Million
But Booked A Loss For The 3rd Quarter Of $ 130 Million.

While The Number Of Echo Star Dish Network Subscribers Is Growing Strongly,
The Enhanced Revenue From Additional Customers Is Offset By Increased
Marketing Expenses Due To Stiff Competition From The Strong US Cable Industry.

Europe

In Europe, The General View Has Been That Europe Could Take Up To Five Years
To Catch Up With The US. On The Other Hand, In The Area Of Mobile Devices And
Interactive Television, Europe Is Leading The US And The Rest Of The World.
Europe Has Seen A Great Move Towards Digital Television And Interactive
Television. Similarly Europe Leads The US With Over 25 Million DTH Customers.

Europe Is Served Among Others By The Eutelsat 5 Satellite Hotbird Network To


Provide More Than 530 Television Channels And 400 Digital Radio Channels To
Approximately 24 Million Homes In Europe, North Africa And The Middle East.

Europe Has Developed The Ability To Do Satellite Television Differently From The
US. Out Of The 530 Television Channels, More Than 200 Are Free To Air.
Television Channel Providers Are Allowed Either To Jointly Commercialize The
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Transponder Capacity Or Utilize The Sky-Plex Package To Provide DTH Signals To
Various Homes.

Eutelsat Is Paying Increasing Attention To Data Casting And Micro Broadcasting


To Specifically Targeted Markets. Eutelsat Had Announced Proposed Launch Of A
New Satellite To Provide 850 Television Channels By The Last Quarter Of 2001.
This Satellite Will Provide Ka Band Technology. This Shows That How Growth Of
DTH Market In EUROPE At That Time.

Canada

Cable Competition Has Increased In Canada In The Past Few Years Due To
Changes In Technology And Government Regulations. There Have Been Delays,
However, In Launching Direct Broadcasting Services (DBS), Largely Due To
Restrictions Against Non-Canadian Programming - 51 Per Cent Of Channels
Carried On Cable And DTH Must Be Canadian Programming. As A Result, A "Gray
Market" Exists: Subscribers Illegally Using US Made Dishes And Receiving US
Satellite Signals. Despite The Popularity Of The Dishes, Canadian DBS Consumers
Basically Face The Same Problems As

US Consumers: 1) Lack Of Local Broadcast Signals, 2) Expensive Equipment And


Installation, 3) Zoning Laws And Tenant Restrictions Against Mounting Dishes,
And 4) Digital Converters Necessary For Each TV Set (And Additions Are Costly).

As In The US, The Main Factors Affecting Consumer Choice Between Cable And
DBS Are Programming Choices, Cost, And Signal Quality. In Major Markets, DBS
Offers A Few Local Channels But Cable Still Has The Advantage. As In The US,
Canadian Cable Operators Plan To Compete With DBS Via New Services, I.E.
Internet, Digital And Telephony. Despite Competition From DBS And Other
Subscription Video Services Such As Wireless, Cable Penetration Has Increased In
The Past Few Years, From 65.3% In 1994 To 67.8% In 1996.

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Competition In Canada Is Likely To Increase Overall Multi-Channel Subscriber-
Ship, But Cable Has An Advantage Due To Price And Local Programming.

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Latin America

Latin America Has Approximately 13.4 Million Multi-Channel Subscribers With An


Overall Penetration Rate Of 15 Per Cent. The Problem With Piracy Has Started To
Improve As Thousands Of Cable Licenses Are Being Granted Across The Region.
Deregulation Of Both Cable And Telecommunications Is Bringing Foreign
Investment Into Latin America, Especially From The US, Canada And Europe.
Consolidation And Acquisition Is Necessary In Order To Upgrade Cable Networks
To Provide Cable Telephony And Other New Services. Smaller Cable And MMDS
Systems Are Being Acquired By The Major Msos.

DBS Has Provided Further Impetus For Cable Operators To Upgrade, With Their
Digital Packages Providing 150 And More Channels Compared To 50 On Cable.
There Were 487,000 Subscribers To DBS In 1997, With 3.2 Million Forecast By
2002. Due To Its High Cable Penetration Rate, DBS Growth In Argentina May Be
Limited. Regulations And Pricing Have Slowed DBS Progress - Equipment Costs
And Programming Packages Are Expensive For The Average Consumer.

Overall, DBS Is Not A Major Threat To The Cable Industry In Latin America,
Especially With Many Msos Becoming DBS Distributors In Their Countries.

Sub-Saharan Africa

It Is Difficult To Predict The Future For Television In Africa. The Liberalization Of


Broadcasting Regulations And The Increasing Penetration Of Low Cost DTH
Technology Have Led To Significant Growth In Africa's Television Market. In
November 1995, Multi-Choice Was Launched And Continues To Dominate The
African DTH Market. Multi-Choice Claims Over 1.1 Million Subscribers, And Even
Far-Away Places Such As Zambia Are Receiving Multi Choice's M-Net Channels
And Have As Many As 4,800 Subscribers.

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The Challenges, However, Facing The African DTH Market Can Be Identified By A
Lack Of Funds, Technological Discrepancies Or Government Intervention.

DTH Seems To Be The Most Economical Method Of Reaching Widespread


Population, However It Is Also Faced With The Challenge Of Providing Services To
A Country Having Over 60 Dialects And Widespread Population That May Have No
Interest Nor Means In Paying For A Satellite Service Because Of Its Cost.

Middle East

The Middle East, With A Population Of Over 165 Million And Over 26 Million
Television Homes, Demonstrates A Market With Significant Potential. However, It
Remains A Market Where Only A Small Minority Actually Pays For What They
Watch On TV.

Cable TV Is Experiencing Growth First Beginning In Israel But Qatar Has 12


Channels Available, While Bahrain And The UAE Both Have Ten. The Multi-
Channel Alternatives, Satellite And MMDS, Are Increasingly Important, Though In
Some States Such As Qatar They Are Mutually Exclusive. The Satellite TV Sector
Exploded After The Gulf War With The Launch Of Services Such As ESC (Egypt)
And MBC (UK) In 1991, EDTV (Dubai, UAE) In 1992, Abu Dhabi In 1994, LBCI, FTV
(Lebanon) And Al Jazeera (Qatar) In 1996 And ANN, A Syrian-Owned Channel
Broadcast Via London, In 1997. The Consumer Taste For Variety And Polished
Programming Packages Has Laid The Foundation For The Conversion From Over-
The-Air Broadcasting To Pay TV.

The Challenge To Becoming A Successful Operator In The Middle East Lies In The
Provider's Ability To Offer A Unique Product While Adhering To The Cultural And
Religious Sensitivities Of The Market.

Satellite Penetration Is As High As 27% In Saudi Arabia And As Low As 6% In


Lebanon. Because Of This Widespread Difference, It Can Be Argued That MMDS

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Will Become The Dominant Medium For Pay TV. Star TV, For Example, Is
Marketing The MMDS Network In Qatar, Dubai And Bahrain.

Finally, The Middle Eastern Television Viewer Has Yet To Come To Terms With
Actually Paying For Quality Entertainment, But Time Will Tell What Will Happen.

Asia And The Pacific

Broadcasting In Asia Continues To Grow By Leaps And Bounds. Penetration Is


Consistently On The Rise With DTH And Cable Penetration Currently Reaching
One In Five TV Households And Estimated To Reach One In Three Households By
2005. In 1991, The First Subscription DTH Service Was Launched Which Led The
Way In The Asian Satellite Revolution.

Growth Is Expected In Cable, MMDS As Well As DTH To Meet Consumer Demand


Which Is Likely To Rebound Strongly After The Current Turmoil Recedes.

Which Technology Prevails In Each Market Is Likely To Be Determined By A


Combination Of Factors Including Geography, Which Technologies Were First
Established, Which Players Have The Most "Political Clout", Etc.

Concentration Of Population And Income Level Will Dictate The Ease In Which A
Consumer Can Access A Pay TV Service.

Australia

In July 1997, The Telecommunications Market In Australia Was Deregulated


Allowing New Carriers To Compete Directly With The Two Incumbent Carriers,
Telstra And Optus. Australia Is Also A Unique Study In Cable, Because It Is One Of
The Few Countries In The World Where Competing Services Are Laying Fibre-
Optic Cable And Hanging It Overhead Simultaneously.

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The Road To Convergence In Australia Has Also Not Been A Smooth One. The
Services Vying For The Ability To Provide Cable, Telephone And Data
Transmission All In One Are Experiencing Losses At An Alarming Rate. Cable Is In
A State Of Overbuild With Over 1 Million Homes Already Passed. It Also Seems
That These Competing Cable Companies Are Readily Accepting Losses In Order
To Gain Market Dominance. Attempts To Merge These Systems Have Been
Repeatedly Foiled By Australia's Anti-Trust Regulator, The ACCC.

Just What The Future Holds For Australia Is Unpredictable But One Thing Is
Certain, Opportunities Exist For The Large And Knowledgeable Participant In
Traditional Media And Television, While Emerging Technologies And Convergence
Opportunities Will Arise With The Deregulation Of The Telecommunications
Sector.

PPV (Pay-Per-View)

The Emerging DTH Sector Is Opening New Revenue Opportunities For Film-
Makers. All DTH Operators Run A Bouquet Of Pay-Per-View Channels Offering
Motley Of Films Across Various Languages And Genres. A DTH Subscriber Can
Access This Content On A Pay-Per-View Basis.

This Is Opening A New Revenue Opportunity For Film Makers To Market Their
Films To DTH Operators Directly. With A Current Subscriber Base Of Over 12
Million Growing Annually At 35 Per Cent Growth Rate, The DTH Operators Provide
Film-Makers A Captive Audience To Showcase Their Products.

Currently, Film Revenues Are Dominated By Theatrical Exhibition Sales Covering


Domestic And International Markets. Over The Last Few Years, The Satellite
Rights Have Emerged As A Key Revenue Generator. Going Forward, New Medias
(Mobile Content, Gaming Etc…) And DTH Pay-Per-View Will Be Key Streams For
Film Makers To Generate Revenues.

According To FICCI The Size Of Indian Filmed Entertainment Industry Is


Approximately Rs. 96 Billion (Year 2007). It Is Estimated To Touch Rs. 176 Billion

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By 2012. The Industry Is Expected To Maintain A CAGR Of Approximately 13 Per

Cent For The Next 4 Years.26

Emergence Of Various Revenue Streams Beyond Traditional Box Office Is


Changing The Face Of The Indian Filmed Entertainment Industry Such As
Television, Mobile, Internet, Home Video, Merchandise, Music, Re-Make Rights
And Several Branded Entertainment Opportunities.

Globally, The Migration To Digital Formats Is Accelerating Growth Of The Filmed


Entertainment Industry. FICCI Estimates That This Trend Is Likely To Catch-Up In
India Too. Distribution Of Entertainment Content Over Various Platforms Including
Video-On-Demand Is Likely To Rise Significantly In The Next Five Years.

Globally, Pay-Per-View Has Emerged From Being An Ancillary Segment Of Film


Business To A Full-Fledged Industry. Worldwide, Pay-Per-View Revenues Have
Grown Steadily Over The Past Decade, Accelerating Somewhat During The Past
Five Years With The Addition Of New Pay-Per-View Subscriber Services. According
To Global Estimates, 45 Per Cent Of All Television Households Currently Subscribe
To Basic Services. Of These, Many Subscribers Pay A Premium For Additional
Services.

The Main Staple For Most Pay-Per-View Services Is Feature Motion Pictures Which
Have Been Released Theatrically. Pay-Per-View Is Gaining Market Share Rapidly
And May Eventually Replace Both Subscription Cable And Home Video By The
Turn Of The Century. Globally, The Number Of Pay-Per-View Customers Is Over 20
Million, Up From 6 Million In 1989. Combined Pay-Per-View Sales Total
Approximately 20 Per Cent Of Theatrical Revenues.

India Is Still At A Nascent Stage As Far As Pay-Per-View Viewer Ship Is Concerned


Providing Great Potential For Future Growth Of This Segment. India Has A Massive
Emerging Middle-Class, And TV Viewing Is A Very Strong Habit. This Clearly
Reflects Its Potential To Be The Driver Of The Pay-Per-View Market. Korea Is

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Currently The Most Advanced Now, Followed By China. But Once It Takes Off,
India Will Overtake China.

India Can Fuse Its Creative Expertise With Its Technological Know-How, Coupled
With The Low-Cost Factor To Provide Cutting Edge Interactive Formats And
Content To The World. In Hollywood, One Would Have To Think Really Hard
Before Experimenting, But India Is In A Position To Attempt It Since It's A Highly
Flexible Market With Good Technical Skills.

India's Pay-Per-View Segment Is Estimated To Grow At 16 Per Cent Annually To


Log Revenues Of $11.3 Billion By 2012 And Emerge As A Key Driver Of This
Business In Asia, According To A Study By Hong Kong-Based Media Partners Asia.

The Study Estimates That India Will Remain A Leading Pay-Per-View Market In
Asia With Superior Growth Prospect Indicating A Huge Upside For The Future.

Much Of Asia's Digital Growth Will Be Driven By China And India, Though India
Will Have A More Significant Impact For Pay-Per-View Distributors (DTH
Operators) And Content Suppliers.

The Study By Media Partners Asia Further States That The Total Pay-Per-View
Revenues In India Will Grow Further To Top $18.5 Billion By 2017, With
Subscription Revenues Of $12.3 Billion And Advertising Amounting To $6.2
Billion.

The Study Also Projects That The Overall Pay-Per-View Subscriber Base Will
Expand To 137 Million By 2012 And 163.8 Million By 2017, With An Annual
Growth Of 10.9 Percent For The First Five Years And 7.2 Percent For The
Remaining Five.

Some Of The DTH Operators Are Steadily Building Up Their PPV (Pay-Per-View)
Portfolio. After An Aggressive Round Of Price Wars, DTH Operators Are Now
Changing Gears To Focus On Their PPV Channels To Lure Subscribers. The PPV
Channels Currently Offer A Bouquet Of Films Each DTH Operator Bundles As Part

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Of Its Channel Bouquets. Operators Offer The PPV Movie Bouquet In Various
Languages Including Hindi, English And Regional. Each Operator Is Currently
Indulging Potential Subscribers With A Motley Film Bonanza Through Its PPV
Strategy.

Opportunities For Indian Vendors

With The Indian DTH Market Set To Go The Cellular Success Way, Lot Of Vendors
Is Excited About It. Though The Market Continues To Be Flooded With Hardware
(Set Top Boxes And Dishes Etc) From China And Taiwan, There Are Several
Established Vendors Who Have Opened Their Shop In India Providing All Kinds Of
Devices, Both Hardware And Software To DTH Companies As Well As Subscribers.
Dish Has Partnership With Conax, A Leading International Company For Providing
Conditional Access. Similarly, For Stbs, It Has Associated With Korea Based
Companies. Recently, Dish Signed An Agreement With Open TV, A Leading
Provider Of Enabling Technologies For Advanced Digital Television Services To
Deploy Opentv's Software And Services In Dishtv. This Partnership Will Enable
Dish TV To Offer Multi-Camera Viewing, Gaming, Interactive Channels, PVR, And
Push Video-On-Demand (PVOD).

Tatasky On The Other Hand Has Partnered With Thomson For Manufacturing Set-
Top Boxes In India And It Will Also Provide A Countrywide After-Sales Service And
Support Network For Our Customers. It Has Also Tied Up With Sun Microsystems
To Provide IT Infrastructure Solutions And Support.

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Chapter 4
Financial Analysis

Revenue Structure27:

Percentage
Revenue Drivers (%)
Sales 1.29%
Subscription Income 79.94%
Processing Charges/Service
Income 1.80%
Other Operational Income 16.96%
Data Source: Total 100.00%
ACCEQUITY

Figure 7 Revenue Structure, data taken from ACE Equity


application Software. Which Show Major portion of Subscription

Implication:

On The Above Graph We Can Say That Revenue Structure Of This Industry Have
Some Fixed Options. And These Are Sales, Subscription Income, Processing
Charges/ Service Income & Other Operational Income.

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Out Of These All Incomes, Mostly Companies Get From Subscription. It Is Around
80% Of Total Income. And Then After Other Operational Income Takes Place. It Is
Around 17%. After That Processing Charges/ Service Income And Then Sales Take
Place From Recharges And All Other Things.

Cost Structure:

Percentage
Cost Drivers (%)
Raw Material Consumed 1.42%
Power & Fuel Cost 0.24%
Employee Cost 4.33%
Production Expenses 57.03%
General And Administration Expenses 4.90%
Selling And Distribution Expenses 29.03%
Miscellaneous Expenses 3.05%
100.00%
Data Source: ACCEQUITY

Figure 8 Cost Structure of the industry playes (approx.)

Implication:

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On The Above Graph We Can Say That Cost Structure Of This Industry Have Many
Different Expenses. And These Are Raw Material Exp., Power & Fuel Exp.,
Employee Cost, Production Exp., General & Administrative Exp., Selling &
Distribution Exp. And Miscellaneous Expenses.

Out Of These All Expenses, Mostly Companies Consume Production Expenses Are
The Most. It Is Around 57% Of Total Expenses. And Then After Selling &
Distribution Expenses Take The Place. It Is Around 29%. After That General &
Administrative Exp. And Then Employee Cost And So And So.

In The Production Exp. Companies Most Consumed On Programs Production Exp.


And Programs & Film Rights. And In The Selling & Distribution Exp., Companies
Most Consumed On Sales Commission & Incentives And Advertisements & Sales
Promotion.

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S. V. Institute of Management, KADI 2008-10
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S. V. Institute of Management, KADI 2008-10
Chapter 5

PEST Analysis:
A Scan Of The External Macro-Environment In Which The Firm Operates Can Be
Expressed In Terms Of The Following Factors:

1. Political
2. Economic
3. Social
4. Technological

The Acronym PEST (Or Sometimes Rearranged As "STEP") Is Used To Describe A


Framework For The Analysis Of These Macro Environmental Factors.

Political Factors

Political Factors Include Government Regulations And Legal Issues And Define
Both Formal And Informal Rules Under Which The Firm Must Operate. Some
Examples Include:

Opposition By Political Parties:

At Its Entry Stage In Indian Market, Direct To Home Television Has Faced Lot Of
Opposition From All The Political Parties; It Was A Bad Word With Everyone
Concerned. Every Politician Screamed That It Would Pose A Threat To National
Security When Star TV Threatened To Flag Off Its Iskyb Project. The Major
Opposition To Iskyb Came From Wannabe DTH Players Such As Subhash Chandra
And Lalit Modi As They Did Not Want Murdoch To Be The First In This Game In The
Indian Market.

But With Passage Of Time Thing Changed, After A Long Brainstorming Session On
DTH Issue Taking Into Consideration The Advantages It Provides To Common

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S. V. Institute of Management, KADI 2008-10
Man, Finally All The Political Parties Agreed Upon Allowing DTH Technology In
India.

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S. V. Institute of Management, KADI 2008-10
Regulatory Role Of Government

Information & Broadcast Ministry Of India Finalized The Guidelines For The
Companies Entering Into This Business And After Assuring All The Security
Aspects, DTH Players Were Allowed To Start Their Play In India. As They Made
Rules For License Fee, Entry Fee, Etc.

Rules For Licensing

1. No. Of Licenses Issued: There Will Be No Restrictions On The Number Of


DTH Service Provider To Issue The License, The License Issued By Any New
Service Provider Who Fulfils The Terms And Conditions Which Are
Regulated By TRAI (Telecom Regularity Authority Of India).
TRAI Also Regulated The Security And Technical Clearances Service Provide To
The DTH Service Holders By The Appropriate Authorities Of The Government.

2. Validity Of License: Wireless Planning And Coordination Wing Of Ministry


Of Communication, The Rules And Regulation Of The Government The
License Provide To The DTH Service Provider Which Is Valid Up To 10 Years
From The Date Of Issue Of Wireless Operational License.

3. DTH License Fee Reduction: The Ministry’s Move To Reduce The License
Fee For DTH Players From 10% Of Gross Revenue To 6% May Soon Bear
Fruition. Secretary Singh Said The Ministry May Be Able To Announce This
Soon. This Process Has Been On For Nearly A Year. Due To The Multiplicity
Of Agencies—Telecom Regulator TRAI, I&B Ministry And The Finance
Ministry Are Involved In This Decision—The File Seems To Have Been
Moving Back And Forth For Nearly An Entire Year. One DTH Industry Source,
Who Has Followed The Policy Change Closely, Told Us That The First Time
Around, The Finance Ministry Had Some Reservations About The Change
After I&B Ministry And TRAI Had Approved The Change. So The Ministry Had
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S. V. Institute of Management, KADI 2008-10
To Make Some Amendments And Get TRAI Recommendation Once Again
And The File Has Gone Back Again To The Finance Ministry. Singh’s
Reiteration Of The Decision May Be An Indication That The Ministry Is
Expecting The Finance Ministry’s Nod Soon.

4. Laws For The Termination: Either Party Has A Right To Terminate This
Agreement On Immediate Written Notice To The Other In The Event Of:
a. Material Breach Of This Agreement By The Other Party Which Has Not
Been Cured Within Thirty (30) Days Of Being Required In Writing To Do
So;
b. The Bankruptcy, Insolvency Or Appointment Of Receiver Over The
Assets Of The Other Party;
c. The DTH License Or Any Other Material License Necessary For DTH Co.
To Operate Its DTH Service Being Revoked At Anytime Other Than Due
To The Fault Of DTH Co.
GBN Shall Have The Right To Terminate This Agreement On Written Notice To
DTH Co. If
(i) DTH Co. Breaches Any Of The Anti Piracy Requirements And Fails
To Cure Such Breach Within Two (2) Days Of Being Required In
Writing To Do So, Or
(ii) GBN Discontinues CNN-IBN With Respect To All Distributors In The
Territory And Provides DTH Co. With At Least Ninety (90) Days Prior
Written Notice.
DTH Co. Shall Have The Right To Terminate This Agreement On Written Notice To
GBN If DTH Co. Discontinues Its DTH Business And Provides At Least Ninety (90)
Days Prior Written Notice.
d. Termination Of This Agreement Shall Not Affect Any Continuing
Obligations Of Each Of The Parties, Including Any Rights And Obligations
Relating To Indemnification And Audit.

Trade Restrictions And Tariffs

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S. V. Institute of Management, KADI 2008-10
Rationale For Making Amendment To The Direct To Home
Broadcasting Services (Standards Of Quality Of Service And Redresses
Of Grievances) Regulations, 2007:

1. No Visiting Or Repair And Maintenance Charges Of DTH Equipment During


Warranty Period. TRAI: The DTH Operators Have Been Prohibited From
Charging Any Fee Towards Visiting Charges Or Repair And Maintenance
Charges Of DTH Consumer Premises Equipment During The Period Of
Warranty For Such DTH Consumer Premises Equipment Acquired On
Outright Purchase Basis.
2. The DTH Operators Cannot Alter The Subscription Package During The First
6 Months, Or Till Validity Expiry, Of A Subscriber's Enrollment. TRAI: The
DTH Operators Have Been Prohibited From Changing The Composition Of
Their Subscription Packages During First Six Months Of Enrolment To The
Subscription Package Or During The Period Of Validity Of A Prepaid
Subscription Package, Whichever Is Longer.
3. In Case A Channel Is Removed From A Subscription Package In The First 6
Months Of Enrollment, The DTH Operator Must Reduce The Price
Proportionately, Or Replace The Removed Channel With One Of The Same
Genre And Language. TRAI: The DTH Operators Have Been Mandated To
Proportionately Reduce The Subscription Charges For A Package From
Which Any Channel Is Removed For First Six Months Of Enrolment Or
During The Period Of Validity Of A Prepaid Subscription Package, Whichever
Is Longer Or To Replace The Channel With A Channel Of Same Genre And
Language.
4. The Option Of Choosing The Package With Reduced Charges Or The
Package With Replaced Channel Has Been Given To The Subscriber.
5. In Case A Removed Channel Needs To Be Replaced, The Replacement
Option Will Be In The Hands Of The DTH Operator. TRAI: Option To Select
The Channel Of The Same Genre And Language In A Subscription Package
To Replace A Channel Which Has Become Unavailable On The DTH
Platform, Has Been Given To The DTH Operator.

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S. V. Institute of Management, KADI 2008-10
6. Your DTH Operator Needs To Give A Prior Notice Of Fifteen Days To You
Before Changing The Composition Of Any Subscription Package.
7. Subscribers Are Allowed To Request Their DTH Operator To Suspend Their
Services
8. For Up To 3 Months. However, This Suspension Period Should Not Comprise
The Same Calendar Month. TRAI: DTH Operators Have Been Mandated To
Entertain Requests Of DTH Subscribers For Suspension Of Services If
Requested Period Of Suspension Does Not Exceed Three Calendar Months
And Does Not Comprise Part Of A Calendar Month.

The Above Rules Are Compulsory For DTH Operators To Adhere To.

Implication:

The Licensing Norms Of This Industry Is Not So Much Strict. Because, Norms
Provide Easy Entry And Exit To DTH Players. But, The Service Norms Are
Somewhat Strict. Companies Have To Give Good Services To Their Customers
Especially To Set Top Box. They Don’t Take Any Repairing Chargers During
Warranty Periods. DTH Providers Also Can’t Change The Composition Of
Subscription Of Customer’s Schemes Till The Expiry Date Of Their Enrolment.

FDI Cap In DTH To Go Up To 74%

The Ministry Of Information And Broadcasting (I&B) Reiterated That It Is Working


Towards Raising The FDI Cap In The Media Distribution Platforms Like Direct-To-
Home (DTH) To 74% From The Current 49%. “We Are Considering The Case Of
Raising The FDI Ceiling In DTH To 74%”- Said By Uday Verma, Additional
Secretary, At The IDNS Conference.

Implication

By The FDI (Foreign Direct Investment), The Quality Of Domestic Institutional


Environment Has Been Improved. An Effective Education And Training System

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S. V. Institute of Management, KADI 2008-10
Upgrades The Skill Level Of The Workforce And Improves The Socio-Political
Climate In The Country. FDI Includes Infrastructure Availability, Quality Of The
Banking System, Market Size, Repatriation Of Profits, Characteristics Of Trade
And Competition Policy Consistency And Predictability. Ministry Of Information &
Broadcasting Has Requested The Authority To Give Its Recommendations On
Foreign Investment Limits For Various Segments Of Broadcasting Sector. This
Consultation Paper Raises Issues Relating To Foreign Investment Limits For
Broadcasting Sector. The Telecom Regulatory Authority Of India (TRAI) Solicits
The Views Of All The Stakeholders On The Issues Raised In The Consultation
Paper.

Government Stability

The Era Of Coalition Politics Had Arrived, And It May Be Some Time Before A
Single Party Government Comes Into Power. The Regionalization Of Indian Politics
Has Also Led To State-Level Innovation And Greater Competition Between The
State Governments To Attract Foreign Capital.

Implication

There Is Change In The Political Party And Their Rules For The Particular Company
And Its Service Provides Style. Instability In Rules And Regulation By The
Government As A Ruling Party, As Evidenced In The Pattern Of Shifting Alliances
And Collapsing Governments That Has Marked Recent Policies.

The Effect Of Political Factors On DTH Service Industry

Factors Unfavora Neutral Favora


ble ble
Political Parties √
Regulatory Role Of √

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S. V. Institute of Management, KADI 2008-10
Government
Rules For Licensing √
Trade Restrictions And √
Tariffs
FDI Cap √
Government Stability √

(Here, Unfavorable-1 & Favorable-3)

Weighted Average = (2*1+4*3)/ 6 =2.33

Thus The Overall Effect Of Political Factors On This Industry Is Favorable.

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S. V. Institute of Management, KADI 2008-10
Economic Factors

Economic Factors Affect The Purchasing Power Of Potential Customers And The
Firm's Cost Of Capital. The Following Are Examples Of Factors In The Macro
Economy:

Currency Stability

Exchange Rate:28
Exchange Rate
Year (INR/US$))
2001 47.05
2002 48.50
2003 46.42
2004 44.87
2005 43.79
2006 44.98
2007 40.95
Source:
2008 42.53
2009 47.88

Figure 9 Exchange Rate

Tradingeconomics.Com

Implication: The Currency Rate Of India Is Ranging From Rs.40 To Rs.50 Per
Dollar. The Currency Rate Affects To The Importer. The Government Is Helping To
The Industry As Reduced Import Duty Of STB (Set Top Box) To Zero Percent From
7.5 %. But The Final Amount Paid By Importer Will Depend On Exchange Rate.

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S. V. Institute of Management, KADI 2008-10
The Overall Impact Of This Exchange Rate Will Mix, As The Rate Of Exchange Is
Fluctuated. The Overall Impact Of Exchange Rate In Current Scenario Is Not So
Much Favorable. Because Of The Rupee Is Depreciated.

GDP (Gross Domestic Product)29


GDP Growth Rate
Year (%)
2000-01 4.40
2001-02 5.80
2002-03 3.80
2003-04 8.50
2004-05 7.50
2005-06 9.40
2006-07 9.60
2007-08 9.00
2008-09 6.70
2009-10 (1st
Q.) 6.10

Figure 10 GDP (Gross Domestic Product)


Source: Macroeconomic And Monetary Developments Second Quarter
Review 2009-10

Implication: The Growth Rate Of The Country Is At Around 6.10% And Sector
Growth Around 25%, So It Is Directly Showing That The Industry Is Very Lucrative.
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S. V. Institute of Management, KADI 2008-10
The Growth Rate Of Industry Will Attract New Players And May FDI Side Because
FDI Is Allowed To 74%. The GDP Rate Of India Is Between 4.40% To 6.10%
Respect To 2000-01 To 2009-10 (First Quarter). The GDP Rate Is Sign Of Boosting
The Overall Industry Development And Has Given Good Support To Our Industry
In The Form Of Reduction In Regulations.

Inflation Rate30
Inflation Rate
(Consumer Prices)
Year (%)
2000 6.7
2001 5.4
2002 5.4
2003 5.4
2004 3.8
2005 4.2
2006 4.2
2007 5.3
2008 6.4
2009 8.3

Figure 11 Inflation Rate


Source: Indexmundi.Com

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S. V. Institute of Management, KADI 2008-10
Implication: As We Can Say That The Inflation Rate Is Showing Continuously
Flexible Trend. As The Price Of All Things Goes High, Consumers Don’t Have
Enough Money To Spend On Their Extra Facilities Like Pay-Per-View. It Is Obvious
That Inflation And Our Industry Have Positive Relationship. Because Of The
Inflation Is Directly Affected To This Industry.

GDP Based On PPP


GDP Based On PPP Valuation Of
Year Country GDP ($)
2001 1618.05
2002 1719.19
2003 1876.54
2004 2096.09
2005 2357.80
2006 2673.59
2007 3007.90
2008 3297.84
2009 3528.61

Source: Indexmundi.Com

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S. V. Institute of Management, KADI 2008-10
Figure 12 GDP based on PPP

Implication: As We Can Say That Increasing Purchasing Power Parity Is A Good


Sign Of Any Country. This Affects To Our Industry Very Positively. As Increase In
Purchasing Power Parity, People Can Spend Extra On Entertainment Expenses.
During Last 9 Years It Is Increased By Around 118%.

Interest Rate:
Interest Rate
Year (%)
2001 6.66
2002 5.88
2003 4.88
2004 4.54
2005 4.96
2006 5.71
2007 6.00
2008 5.92
2009 3.41

Figure 13 Interest Rate

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S. V. Institute of Management, KADI 2008-10
Implication: In India Interest Rate Is Very Low. Because Of It People Can’t Get
Good Return On Their Savings. It Is Not Directly Affect To This Industry. Because
It Don’t Have Any Direct Relation Between The Using Of DTH Service And Savings
Of People.

Budget Impact On DTH Industry

Union Budget 2008-09 Has Brought Some Positive Highlights For The DTH
Industry.

At Present There Is Zero Duty On Import Of Set Top Boxes From Existing 7.5
Percent. The Finance Minister Has Also Removed Duty On Import Of Specified
Parts Of The Set Top Boxes. This Will Provide Leverage And Opportunity For DTH
Players To Evaluate The Option Of Manufacturing Set Top Boxes (STB) Locally.
Since The CVD (Counter Veiling Duty) Is Reduced From 16 Percent To 14 Percent,
The Cost Of The C.P.E (Customer Premises Equipment) Will Go Down To The
Similar Affect And Will Benefit The DTH Operator Who Already Providing
Considerable Subsidies To Consumer And Will Further Accelerate The Date Of
Digitalization In The Country.

The Gujarat Government, In Its Budget For The Fiscal 2009-10, Preferred Not To
Impose Any New Taxes Except Entertainment Tax On Direct-To-Home (DTH)
Service. The Government Has Proposed Only Entertainment Tax On DTH
Connections At Rs 200 Per Connection Annually. The New Tax Is Estimated To
Contribute A Meagre Rs 6 Crore To The State Exchequer.

The Effect Of Economic Factors On DTH Service Industry

Factors Unfavorab Neutral Favorabl


le e
Currency Stability √
GDP (Gross Domestic √
Product)

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S. V. Institute of Management, KADI 2008-10
Inflation Rate √
GDP Based On PPP √
Interest Rate √
Budget Impact √

(Here, Unfavorable-1 & Favorable-3)

Weighted Average = (1*1+5*3)/ 6 = 2.67

Thus The Overall Effect Of Economic Factors On This Industry Is Favorable.

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S. V. Institute of Management, KADI 2008-10
Social Factors

Social Factors Include The Cultural Aspects And Include Health Consciousness,
Population Growth Rate, Age Distribution, Career Attitudes And Emphasis On
Safety. Trends In Social Factors Affect The Demand For A Company's Products
And How That Company Operates Its Business.

Consumer Attitudes And Opinions

Consumer Attitude And Opinion Of The Product Affect To More Company’s Growth
And Development. DTH Customer Is Successful To Satisfy The Customer Demand
And Their Needs. And Consumer Attitude Towards DTH Is Positive And It Is Going
To Increase. When DTH Introduce In INDIA, This Industry Do Not Get Support
From The Consumer. DTH Is Very Useful To Wondering Consumer Class. Due To
Our Survey, We Show That In “Slum Area Nearby VASNA, Ahmadabad There Are
More Than 20 DTH Is Installed And Nearby That One Building There Is Only Three
DTH Connections. But, There Are Still Some Other Viewers Who Can Prefer Cable
Operators As Per Traditional Thinks.

Brand, Company, Technology Image

Now This Industry Is Development Stage. For This Industry It Is Difficult For Them
To Grab The Market Share Of Cable TV And IPTV TV. This Industry Comes To
Forward With New Technology And New Schemes To Make Image Of The
Company In Consumer Mind. Dish TV, Tata Sky And Big TV Is Able And We Can
Say Success To Make Their Awareness In Market. MPEG-4 Technology Is More
Efficient In Broadcasting Superb Quality Video And More Channels As Well.
MPEG4 Standard With DVB S2 Technology Will Be Used By The Company To
Provide Great Picture Quality And Sound Standard. Various Technology Used By

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Different Company Provide Greater Satisfaction To Consumer. Dish TV Is Able To
Convince Consumer. And To Say Quality Wise Tata Sky.

Buying Access And Trends

Dish TV Is Successful To Become Brand And To Grab The Market Share Of The
Industry. And After That TATA Sky Is Second Potion After Dish TV. TATA Sky Come
Recent More Advertisement And New Active Services Like Recent Making Food,
News Games And Many More. Tata Sky Also Come With Unique Service Is That
Consumer Can Record Serial /Live Math On DTH Set Up Box And We Can See Any
Time. And Third Potion Going To SUN TV Is Also Satisfied To Consumer.

Age Distribution And Lifestyle Trend31

Age Structure:

Age Percent Male /Female


%
0-14 Years 31.1% (Male 190,075,426/Female
172,799,553)
15-64 Years 63.6% (Male 381,446,079/Female
359,802,209)
65 Years And 5.3% (Male 29,364,920/Female 32,591,030)
Over (2009 Est.)

Median Age

Total Median 25.3 Years


Age
Male: 24.9years
Female: 25.8years

Source: Www.Cia.Gov/Library/Publications/The-World-
Factbook/Geos/In.Html

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S. V. Institute of Management, KADI 2008-10
As Per Above Table 15-64 Years Population Is Very High And Median Age Is 25.3
Year. So India’s Population Has A High Tendency To Spend Than Save. So
Demand Of The Product Is Increase. DTH Industry Is Also Type Of Entertainment
As We Know 15-64 Years Have More Changes In Lifestyle. They Are Ready To
Adopt New Innovation And New Changes In These Age Awareness Increasing
Regarding New Era And Increasing The Income Level.

Implication:

Indian Population Age Median Is 25.3 Years So We Can Say Large Amount Of
Population Is From Young Generation. So Here Dth Industry Has Positive Impact.
Because They Want New Innovation. And This Industry Will Come New Active
Service, Internet Base Service Etc.

Family Form And Population Shift

Implication:

Awareness Of The People Is Increasing. To Get Better Facility And Education


People Are Going To Shift Rural To Urban Area. Because Of That Family Form
Become Nuclear Form. Our Urbanization Population Is 29% Of Total Population
(2008) And Rate Of Urbanization Is 2.4% Annual Rate Of Change (2005-10). So
Here Industry Has Huge Untapped Market In Urban Area As Well As In Rural Area.

Cultural Implications Of DTH

• The Social Cause Of The Effect Of Foreign TV Channels On The Indian


Citizen Is Of Paramount Importance And Cannot Be Sacrificed. From A

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Technology And Consumer Viewpoint The Entry Of DTH Technology In India
Is A Welcome Step, But As Another Side Of A Coin It Threatens To Spoil The
Culture Of The Country. Easy Access To Foreign Channels, Increasing
Television Viewing Hours, Overexposure To Western Culture All This May
Negatively Affect The Mindsets Of People, Especially The Children.
• Therefore, DTH Should Not Be Green-Signalled From A Regulatory
Viewpoint. Almost Every Country Has Had Some Sort Of Regulatory
Framework Built Before Allowing DTH In Their Country.
• Now The Company Provide The Various Service Like Active Service Which
Provide Food Recipe, Game Yoga Instruction Etc. This Is Very Helpful To
Society.

The Effect Of Social Factors On DTH Service Industry

Factors Unfavorab Neutral Favorabl


le e
Consumer Attitudes And √
Opinions
Brand, Company, √
Technology Image
Buying Access And Trends √
Age Distribution And √
Lifestyle Trend
Family Form And Population √
Shift
Cultural Implications Of DTH √

(Here, Unfavorable-1 & Favorable-3)

Weighted Average = (1*2+5*3)/ 6 = 2.83

Thus The Overall Effect Of Social Factors On This Industry Is Favorable.

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S. V. Institute of Management, KADI 2008-10
Technological Factors

Technological Factors Can Lower Barriers To Entry, Reduce Minimum Efficient


Production Levels, And Influence Outsourcing Decisions. Some Technological
Factors Include:

DTH Technology

As Per Technology DTH Is A Digital Satellite Service That Provides Television


Services Direct To Subscribers Anywhere In The Country. Since It Makes Use Of
Wireless Technology, Programs Are Sent To The Subscriber's Television Direct
From The Satellite, Eliminating The Need For Cables And Any Cable
Infrastructure.

Its Technology Eliminates The Need Of Any Intermediary Between The Service
Providers And The Viewer. The Technology Used Is Wireless (With No Cables
Running Into The Viewers Home) Making It Easier To Reach The Remote Areas Of
The Country.

The Viewer Has A Dish Antenna32 Installed Outside Of The Location (In Open Air)
To Catches The Signals From The Satellite And Then Directs It To The Set Top Box
Installed. The Set-Top-Box Is Fitted With A Viewing Card-VC (Similar To Sim-Card)
Which Is Uniquely Numbered And Contains Information About The Channels Or
User Selected Plan To Consume/ Entertain That Have Been Subscribed To By The
Viewer. It Is Only For Private Service Provider’s Recharge Policy Also Includes An
Agent For Recharge As Well As Change Service Plan Whether In The Case Of DD
Direct –Pulse User Have Not To Pay After Pay First Installation Charge With All
Equipment.

Dish Antenna Has More Than Two Different Ranges Available In Market. As Per
Doordarshan They Provide 120 Mhz And 90 Mhz Frequency Enable Dish Antenna
Which Is Suitable In Rainy Season As Well As A Long Distance Area.

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Implication:

A Technology Makes Easy Entertainment For Audience. By This Service


Technology A Customer Can Select Their Suitable And Required Channel Plan And
Pay For That. But, Doordarshan Provides One Time Pay And Get Entertainment At
Home Or Your Location (Office, Shop As Well As On Vehicle Service In Selected
South-Indian Region) For Life Time. So, This Technology Is Very Effective For The
Users.

Govt. Course Of Action Towards Technology

TRAI Has Directed That The DTH Service Providers Will Need To Provide The Rival
Channels Too. However Unlike CAS In Cable TV System, For Which TRAI Has Set
Up A Cap For The Pay Channel Charges, No Such Cap Exists For The DTH Tariffs.
Therefore, Viewers May Get Hit By Subscription Fee Hikes.

Government Launched INSAT 4A, India’s Most Powerful Communication Satellite.


It Provided Direct-To-Home (DTH) Telecasts From Early 2006. This Was Good
News For All Those Of Us Who Had To Suffer The Cable TV Operators.33

At Present There Is Zero Duty On Import Of Set Top Boxes From Existing 7.5
Percent. The Finance Minister Has Also Removed Duty On Import Of Specified
Parts Of The Set Top Boxes. This Will Provide Leverage And Opportunity For DTH
Players To Evaluate The Option Of Manufacturing STB (Set Top Boxes) Locally.
Since The CVD (Counter Veiling Duty) Is Reduced From 16 Percent To 14 Percent,
The Cost Of The C.P.E (Customer Premises Equipment) Will Go Down To The
Similar Affect And Will Benefit The DTH Operator Who Already Providing
Considerable Subsidies To Consumer And Will Further Accelerate The Date Of
Digitalization In The Country.

And Also A Government Player Doordarshan, DTH Service Providers Have To Add
Channels In Their Predefined Or Least Channel Package.

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Implication:

Thus, Government Also Helps To This Industry By Providing Benefit In Taxes And
Also Providing Technical Supports. Because Of This Consumers Get Benefit Of
Low Charge By The DTH Service Providers.

Technology Incentives

The Prohibition On The Reception And Distribution Of Television Signal In Ku Band


Has Been Withdrawn By The Government Vide Notification No. GSR 18 (E) Dated
9th January 2001 Of The Department Of
Telecommunications.34

Direct-To-Home Is A Distribution Platform For


Multi-Channel TV Programs On Ku Band (High
Frequency Of 11.7 To 14.55 Gigahertz) By
Using A Satellite System Which Transmits
Signals Directly To Subscriber Premises.

The Term Predates DBS Satellites35 And Is Often


Used In Reference To Services Carried By Lower Power Satellites Which Required
Larger Dishes.

Following Are The Simplified Steps On How DTH Works With Ku Band Satellite:

1. Broadcaster Sends The Signals.

2. The Satellite Receives The Signals At Ku-Band36

3. The Dish Antenna At Subscriber’s Home Receives The Signals


4. The Set Top Box Decodes The Signal And Sends It To TV Set

Implication:

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S. V. Institute of Management, KADI 2008-10
By This Technological Service All DTH Service Provider Can Get Direct Service
Distribution Initiative To Their Customer. Service Providers Also Get An
Advantage Of This Technology By PPV (Pay-Per-View) Service To The Customer.

Same As A DTH Service User Can Get Direct Privet Channel Service With Better
Quality And Sound Better Then Private Cable Operator Service As Well As By
Their Own Dish Antenna And STB They Can Easily Operate And Change Its
Location Anywhere In India And Can Get Initiative Their Customize Channel Out
Of Private Cable Service Providers Barrier.

About Ku-Band37
What Is Ku Band?

• The Ku Band (Kurtz-Under Band) Is Primarily Used


For Satellite Communications, Particularly For
Editing And Broadcasting Satellite Television. This
Band Is Split Into Multiple Segments Broken Down
Into Geographical Regions, As Determined By The
ITU (International Telecommunication Union).
• The Ku Band Is A Portion Of The Electromagnetic
Spectrum In The Microwave Range Of Frequencies Ranging From 11.7 To
12.7ghz. (Downlink Frequencies) And 14 To 14.5ghz (Uplink Frequencies).
• The Most Common Ku Band Digital Reception Format Is DVB (Main Profile
Video Format) .Vs The Studio Profile Digital Video Format Or The Full-Blown
Digicipher II 4DTV Format.
• The First Commercial Television Network To Extensively Utilize The Ku Band
For Most Of Its Affiliate Feeds Was NBC, Back In 1983.
• The ITU Region 2 Segments Covering The Majority Of The Americas Are
Between 11.7 And 12.2 Ghz, With Over 21 FSS North American Ku-Band
Satellites Currently Orbiting.
• Each Requires A 0.8-M To 1.5-M Antenna And Carries Twelve To Twenty
Four Transponders, Of Which Consume 20 To 120 Watts (Per Transponder),
For Clear Reception.

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• The 12.2 To 12.7 Ghz Segment Of The Ku Band Spectrum Is Allocated To
The Broadcasting Satellite Service (BSS). These Direct Broadcast Satellites
Typically Carry 16 To 32 Transponders.
• Each Provides 27 Mhz In Bandwidth, And Consumes 100 To 240 Watts Each,
Accommodating Receiver Antennas Down To 450 Mm (18 Inches ).
• The ITU Region 1 Segments Of The Ku Spectrum Represent Africa And
Europe (11.45 To 11.7 Ghz Band Range And 12.5 To 12.75 Ghz Band
Range) Is Reserved For The Fixed Satellite Service (FSS), With The Uplink
Frequency Range Between 14.0 And 14.5 Ghz).

Ku Band Difficulties

• When Frequencies Higher Than 10 Ghz Are Transmitted And Received Used
In A Heavy Rain Fall Area, A Noticeable Degradation Occurs, Due To The
Problems Caused By And Proportional To The Amount Of Rain Fall
(Commonly Known As Known As "Rain Fade").
• This Problem Can Be Combatted, However, By Deploying An Appropriate
Link Budget Strategy When Designing The Satellite Network, And Allocating
A Higher Power Consumption To Overcome Rain Fade Loss. In Terms Of
End-Viewer TV Reception,
• It Takes Heavy Rain Falls In Excess Of 100 Mm Per Hour To Have A
Noticeable Effect.
• The Higher Frequency Spectrum Of The Ku Band Is Particularly Susceptible
To Signal Degradation- Considerably More So Than C Band Satellite
Frequency Spectrum, Though The Ku Band Is Less Vulnerable To Rain Fade
Than The Ka Band Frequency Spectrum.
• A Similar Phenomena, Called "Snow Fade" (When Snow Accumulation
Significantly Alters The Focal Point Of Your Dish) Can Also Occur During
Winter Season.
• Also, The Ku Band Satellites Typically Require Considerably More Power To
Transmit Than The C Band Satellites. However, Both Ku And Ka Band
Satellite Dishes To Be Smaller (Varying In Size From 2' To 5' In Diameter.)

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S. V. Institute of Management, KADI 2008-10
Ku Band Satellite Service Downlink Usage Frequency Range

The Ku Band Downlink Uses Frequencies Between 11.7 And 12.7ghz.

The Ku Band Downlink Frequencies Are Further Subdivided According To Their


Assigned Use:

Ku Band Usage : Downlink


Fixed Satellite Service: 11.7 - 12.2ghz
Broadcast Satellite Service : 12.2 - 12.7ghz

• Services That Can Be Found On The Ku-Band Include Educational Networks,


Business Networks, Sports Backhauls, Tele-Conferences, Mobile News Truck
Feeds, International Programming, And Various SCPC (Single Channel Per
Carrier) Transmissions Of Analog Audio, As Well As FM Audio Services.
• If You Already Have A Operational C-Band System In Place, You Can Retrofit
It To Accept Ku Band Frequencies.
• In Order To Do So, You Will Need To Obtain A Ku-Band LNB As Well As A
C/Ku Band Feed-Horn, Plus Some Coax Cable For Your Ku-Band LNB.
• As For The Coax Cable Recommended- RG-6 Is Optimal For Low Loss In The
950-1450 Frequency Range- What Ku-Band LNB Processes. However, If RG-
59 Is Your Only Viable Option, It'll Work In A Pinch.

Ku Band Dish Antenna Compatibility

• If You Have A Solid Dish, You Should Have No Problem Converting From C
Band, To Ku Band.
• However, With A Mesh Dish- If The "Holes" In The Mesh Are Greater Than A
Quarter Inch, The Chances Of Computability Are Not In Your Favor, Due To
The Fact That Your Dish Won't Reflect Ku-Band Signals Properly.

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S. V. Institute of Management, KADI 2008-10
• Therefore, You'll Want To Strongly Consider Upgrading To Either A Solid
Dish, Or A Mesh Dish In Which The Hole Size Under 1/4", And Ideally You'll
Want A Dish That Is 1 Piece (Or At Least Very Few Pieces); As 4 Section
Dish Is More Optimal Than An 8 Section Dish.
• The Fewer The Sections, The More Accurate Your Parabola Shape Is And
Thereby The More Difficult It Is For Your Dish To Become Warped (The
Smaller The Number Of Seams- The Better). And Insofar As Dish Mounts Go,
The H2H (Horizon-To-Horizon) Dish Mount Is More Desirable Than A Polar
Mount.
• This Is Due To The Fact That The Ku-Band Demands That The Dish Antenna
System Is Well-Targeted And Able To Closely Follow The Orbital Arc, Of
Which The H2H Mount Does Quite Admirably, As Compared To A Polar
Mount. Also, Bear In Mind That You Will Be Adjusting Both The Azimuth And
Elevation, Which Can Be A Bit Tricky Occasionally.

Importance Of Satellite Antenna Dish Parabola

• The Parabolic Shape Of Your Dish Is Of Critical Importance, As Warpage


Causes Signal Degradation Via Mis-Reflection, Seriously Down-Grading Your
Overall System Performance. Some Tape And String Is All That Is Required
To Do A Quick War Page Check And Some Tape.
• Anchor A Piece Of String, Stretched As Tight As Possible, "North" To "South"
Across Your Dish Face, Edge To Edge. You'll Want To Do The Same Thing
Again, With Another Piece Of String, Only "East" To "West" Across The Dish
Face- At 90 Degree Angles. Be Sure That Both Strings Are Tight-
• If The Strings Come Together Anywhere But The Direct Center, Then Your
Dish Has Sustained Warp Damage And Needs To Be Bent Back Into Proper
Parabola Shape, For Optimal Performance. If They Connect In The Center Of
Your Dish, Likely That Your Dish Is Not Warped.
• So Therefore, You'll Want To Use Either The Tri-Supports Or Quad Supports,
As They Will Greatly Assist In Keeping Your Ku-Band Feed-Horn Highly
Stable, Even In High Winds.

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• When Your Button-Hook Feed Moving In The Wind, Your Ku-Band Reception
Can Easily Drop Out. By Putting Guy-Wires On The Button-Hook Feed, You'll
Create The Much-Needed Support, In The Event You Are Not Able To Obtain
A Tri Support Or Quad Support.

Rate Of Technological Change

In Yeas 1969 Doordarshan (Prasar Bharti) Has Been Started By Government


Of India. Then After Nearby Year 1991 Private TV Channels Are Come Out In The
Market. At The Time Of Liberalization In 1991, Many Foreign Channels Came Into
India. So, Private Cable Operates Got Opportunities. And Last, In Year 2001 DTH
Service Was Started In India Where As IPTV Technology Is Emerging As
Broadband Television Service.

Implication:

In India Rate Of Technological Change Is Low. It Directly Affects Indian DTH


Industry Market. But, Now Time Is Changed. So, Service Provider Can Take This
Initiative As A Monopolistic Business Market.

Industry R&D Spend

As This Industry Mostly Depends On Technology, Each & Every Companies


Always Try To Maintain It. In Tatasky And Now Also Available In Other Players STB
To Record Same Time Show In Other Channel, No Need To Waste For That
Particular Program. For VC Recharge They Cover Each Kind Of Source/ Option To
Recharge It. And Also Companies Spend Behind New Special Interactive Services
As Well Quality To Broadcasting. Airtel Digital Service New Feature Also In Set-
Top-Box Is Its Remote Control As Can Use As TV Remote With As Possible As
Least Switches In It.

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And Also As A Competitor IPTV Is There, But Players Like Bigtv (Reliance ADAG),
Dishtv (Essel Group - Zee Network), And Airtel Digitaltv (Airtel Group) Are Trying
To Work On It. But As An Initiator MTNL And BSNL (Govt. Sectors) Are There.

Satellite Introduction38

India Has 400 Plus Channels Beaming Into Homes Courtesy Six DTH Operators
And More Than 60,000 Cable Ops. Which Satellites Are The Networks Using To
Transmit These Channels? Indiantelevision.Com’s Satellite Reckoner Helps You
Navigate Through The Maze.

K-BAND
Abs-1 Eurobird - 2 Eutelsat - W5 Express-Am2 Insat-3b,4a Insat4b
Intelsat 709 Intelsat-12 Measat-3 Nss 6 St - 1 Telstar - 10

Satellite Footprint

Zee Network39:

Here We Can Say That Zee Network (Essel Group) Has Strong Backup For DTH
Service Across The World Wide Service As Per Following Satellite Foot Print Of
Zee Network.

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Asia

Zee Network Uses C - Band


Transponder Space On Asiasat-
3S, Which Covers India, The
Middle East, Australia, The
SAARC Region And The Far
East.

Two Uplink Centres At


Singapore & New Delhi (Noida)
Are Used For Optimum Content
Management. The Noida Uplink
Facility Hosts The Uplink For
Zee News, Zee Music And Our
Four Regional Channels (Zee
Punjabi, Zee Gujarati, Zee
Marathi, And Zee Bangla) In
Order To Maximize On-Air
News Content. The Singapore
Uplink Facility Hosts Zee TV,
Zee Cinema, Cafe, And Studio
& Nickelodeon.

Europe

Zee Network Is Available In UK


On The Bskyb DTH Platform.
Four Channels Are Available
On The Platform (Zee TV, Zee
Figure 14 Zee Network Satellite Service Area.
Cinema, Zee Music & Zee
Punjabi - UK). The Playouts For All The Channels Except Zee Punjabi Are Located
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S. V. Institute of Management, KADI 2008-10
In London, With A Satellite Link From Singapore Which Carries Zee TV, News And
Live Programming. Zee Punjabi UK Is Also Played Out From Singapore And Carried
Via Satellite Link Up To UK. The Zee TV UK Playout Is Expected To Shift To
Singapore By Feb. 2003 For Better Network Efficiency.

The Hotbird Platform (Hotbird 3) Covers The Transmission For The Rest Of
Europe, With The Uplink For Eutelsat Satellite (Www.Eutelsat.Com) Being Sourced
From Belgacom.

Americas

Zee TV & Zee Gold Channels Are Available In The Americas. The Channels Are
Available On The Echostar (DISH) Network As Well As Local Cable Systems. Zee
Network Uses A Local Playout At Cheyenne With A Satellite Link On PAS - 9 From
UK For Live News And Events.

Africa

Zee TV Is Widely Available In Africa On The Multichoice DTH Platform And A


Number Of Cable Systems. Zee TV Africa Is Played Out From Singapore Via
Intelsat. Worldwide Coverage The Map Given Below Shows Zee's Global
Coverage.

Worldwide Coverage

The Map Given


Below Which Is
Shows Zee's
Global Coverage.

Sun Direct40:

Sun Direct (Sun


Network) Has Also

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S. V. Institute of Management, KADI 2008-10
Figure 15 SUN Network Service Area
Technology Initiative For Broadcasting By Their Satellite Service Sun Network's
Channels Can Be Viewed In 27 Countries Including U.S.A, Canada, Europe,
Singapore, Malaysia, Srilanka, South Africa, Australia And New Zealand. With
Their Own Movie Production, Tv Channels, Production, Radio Channels (Red.FM,
Suryan.FM).

Frequency: 4044 H 28000 SUN TV MUX41

Implication:

An Initiator And Major Players Which Has Strong Satellite Frequency Service To
Broadcast Around The World Now Or Future Expansion.

Technology Push

In India Which Has A Large Untapped Market, The Scope For This Service Is So
Much. For That Company Have To Try Rich Maximum Target Audience. For That
They Have To Spend More On Innovative Package With Special Interactive
Services.

Videocon Group Has A Special Power To Push This Technology As In Their New
LCD Or Flat Tv Has Facility Of STB And Also Available Separately. By That Way A
Customers Are Trying To By It For Batter Service.

As Per Interactive Services, Pay-Per-View, Movie-On-Demand, And Program


Recording Facility Make Somewhat Effect On Internet Service, Cable Operate To
Full Pay For Limited Channel Use Also, DVD Player To View A Program Or Enjoy
Movie With Recording Facility, And Also Effect On STB Producer By In Built STB In
TV Equipment.

Productivity Improvements

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Service Providers Are Trying To Improve Their Productivity By Downlink
Frequencies As Well As Uplink Frequencies For Batter Broadcasting Service. And
Also Muli-User Service Dish And STB Equipment They Are Trying Well. Dish TV
Already Started MDU Service.

Multi Dwelling Unit42


What Is MDU?

The Multi Dwelling Unit, It Is Customized Solution For Connecting Multiple Houses
Within The Same Multi Storied Building With A Single/ Two Dish Antennae To
Receive DTH
Services. Common
Dish Installed On The
Terrace Of The Multi
Storied Building
Powers TV Sets In
Multiple Homes In
The Building Through
A Cable, Which Runs
Into Each Flat. And
Once Installed,
Members Have The
Choice Of Subscribing
To The Connection. Figure 16 The Multi Dwelling Unit Service to Multiuser

Advantage Of MDU

• Each And Every Customer In The Building Does Not Have To Have A
Separate Dish Antenna To Receive DTH Services. Common Dish In The
Building Can Be Used.

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S. V. Institute of Management, KADI 2008-10
• Additional Dish Is Not Required To Be Installed For Any Additional
Subscriber In The Building.
• It Is Easy To Maintain One Or Two Dish Antenna In A Building Rather Than
Maintaining Number Of Dishes.

Why MDU?

DTH Is The Concept Of Receiving The Satellite Directly In The Home. A Small Dish
Is To Be Installed To Receive The Satellite In The Home. One Connection Needs
One Dish To Receive Satellite. This Leads To Number Of Dishes In Any Multi
Storied Building Having Many Subscribers. 50 Subscribers Mean 50 Dishes On The
Roof.

MDU Is The Solution To Reduce The Number Of Dishes To One Or Two In A Multi
Storied Building For Number Of Subscribers In The Building.

The Effect Of Technological Factors On DTH Service Industry

Factors Unfavorab Neutral Favorabl


le e
Technology √
Govt. Course Of Action √
Towards Technology
Technology Incentives √
Rate Of Technological √
Change
Industry R&D Spend √
Technology Push √
Productivity Improvements √

(Here, Unfavorable-1 & Favorable-3)

Weighted Average = (1*2+6*3)/ 7 = 2.86

Thus The Overall Effect Of Social Factors On This Industry Is Favorable.

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S. V. Institute of Management, KADI 2008-10
Michel Porter’s Five Force Analysis

Threats Of New Entrants

There Are Many Factors Affecting


Bargaining Power Of Buyers. As
They Are Given Below:

Access To Distribution Net-Work:


For This Business Readily Availability Of Service To Target Segment Is Must. For
That Companies Have To Build Strong Distribution Network. Companies Like Airtel
Digital TV , TATA Sky Have Strong Distribution Network. Airtel Digital TV Has Only
1day Processing Time. And Tata Sky Has Only 2day Processing Time.43 For New
Companies Who Don’t Have Strong Distribution Network Or Not Able To Meet
Order In Least Time, This Business Is Very Tough Task For Them. So, It Is High.

 So, Threat From New Competitor Entry Is Low.

Advertising & Marketing Activity:


For This Starting Of DTH Service, It Is Required To Create Awareness Regarding
Brand Name Among The People. For That It Required Strong Advertising Budget.
Now A Days, There Is Trend Of Using Brand Ambassador To Promote Brand. Tata
Sky Came Out With Aamir Khan, Dish TV Came Out With Shahrukh Khan , Airtel
Digitel Came Out With Saif Ali Khan & Kareena Kapoor,Etc. To Create And
Maintain Strong Present In The Market It Requires Efficient And Skilled Sales
Force. It’s Required Huge Investment And Expertise To Maintain It And It Is Not
For Everyone’s Cup Of Tea.

 So, Threat From New Competitor Entry Is Moderate To Low.

Regulation & Norms:


TRAI And Information & Broadcasting Ministry Is The Governing Body Of DTH
Service Industry. DTH Service Covered Under The Direct To Home Broadcasting
Services (Standards Of Quality Of Service And Redresses Of Grievances)
Regulations, 2007. Government Has Imposed Strong Rules Like No Visiting Or
Repair And Maintenance Charges Against DTH Equipment During Warranty
Period, The DTH Operators Cannot Alter The Subscription Package During The
First 6 Months, Or Till Validity Expiry, Of A Subscriber's Enrollment, Etc.

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S. V. Institute of Management, KADI 2008-10
 So, The Threat From New Entry Is Moderate To Low.

Capital Requirement:
There Is Low Capital Requirement In This Industry. It Is Just Rs.10 Cr Which Is
Non-Refundable. And Also Need To Investment In Technology. So, It’s Not Easy
For Any Corporate House. And Also Need To Invest In Technology. It Is High.

 So, The Threat From New Entry Is Low.

Cost Design:
In This Service Industry Low Cost Design Is An Important Factor. Dish TV Uses The
Multi Dwelling Unit (MDU). It Is Customized Solution For Connecting Multiple
Houses Within The Same Multi Storied Building With A Single/ Two Dish Antennae
To Receive DTH Services. In This Service, Common Dish Installed On The Terrace
Of The Multi Storied Building Powers TV Sets In Multiple Homes In The Building
Through A Cable, Which Runs Into Each Flat.44 Thus, Dish TV Has Lo Cost Design.
But, It’s Not A Cup Of Tea For Each And Every Company To Implement Lo Cost
Design.

 So, The Threat From New Entry Is Moderate To Low.

Industry Growth:
Annual Compounded Growth Rate Of DTH Service Industry Is Around 30%, Which
Shows Demand Is Increases Rapidly. Rising Per Capita Income, Changing Life
Style, Etc. Have Driven Growth. So, Market Is Attractive For The New Players.

 So, The Threat From New Entry Is High.

Government Policy:
Government Is Providing Good Facilities To DTH Service Industry. As Government
Reduced Import Duty To Zero Percent From 7.5% On Set Top Box. And Also
Reduced License Fee From 10% To 6% And The CVD (Counter Veiling Duty) Is
Reduced From 16% To 14%. This Shows Government Provides Friendly Policy To
DTH Service Providers. But, There Is Also Non-Refundable Fee Of Rs.10 Cr. At The
Time Of New Entry.

 So, The Threat From New Entry Is Moderate To High.

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Threats Of New Entrants

The Effect Of All Above Factors


Factors Low Moderat Moderat Moderate High
e To Low e To High

Access To 
Distribution
Network (High)
Advertising & 
Marketing
Activity (High)
Regulation & 
Norms
(Moderate To
High)
Capital 
Requirement
(High)
Cost Design 
(Moderate To
Low)
Industry 
Growth (High)
Government 
Policy (Liberal)

Summary:

Access To Distribution Is High So Threats Of New Entrants Are Low. Advertising &
Marketing Activity Is Also High So Threats Of New Entrants Are Low. Regulations
& Norms Are Strict So Threats Of New Entrants Are Low. There Is Low Capital
Requirement So Threats Of New Entrants Are High. In Respect Of The Low Cost
Design Threats Of New Entrants Is Moderate To Low. There Is Low Level Of
Switching Cost So Threats Of New Entrants Are High. The Buyer Demand Is
Growing Rapidly So Threats Of New Entrants Are High. And Government Policy Is
Somewhat Friendly So Threats Of New Entrants Are Moderate To High.

The Overall Threats Of New Entrants Is, Moderate To Low.

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Threats Of Substitutes

Determinants Of Substitution Threat


In This Industry Mainly Four Type Of Substitute Available And They Are Closely
Related To Dth Industry. Four Substitutes Are: IPTV, Cable Terrestrial, Television
And CAS.

• IPTV Provide Services Have Been Very Attractive Levels With The
Subscription Charges Depending On City And Provide Set Up Box Free
With Refundable Security Deposits. And They Provide Unique Features.
IPTV Is Expected To Take Some Time To Catch Up S Infrastructure To
Cover Wider Scale.
• As We Know Cable TV Have Huge Market. 73 Million Households Have
Cable Connection.
• Doordharshan Is World‘S Largest Broadcast With Over 1400 Terrestrial
Television Transmitters. And The Reach Provided By This Route Is
Phenomenal With Provided Coving 88% Geographic Area Of India.
• Introduction Of CAS By The Government In Specified Are Since 2007 And
This Also Put Push Towards Digitization Of Cable. If Regulated And
Implemented Properly Could Pose A Threat To DTH Player In Future.
• New Technology Accepted By TRAI Is Headend In The Sky (HITS). DTH
Have End User Of Consumer, The HITS End User Is A Cable Operator.

 So, Threats From Substitutes Are Moderate To High.

Costs Of Switching To Substitutes:


Package Price Of Services Is Not More Different From Substitute To Substitute. So
Buyer Can Easily Switch From One To Another. They Charge Low Price So That
Customer Do Not Incur Big Cost. They Can Transfer To Substitute.

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IPTV Provide Subscription Charges Between Rs. 100 To Rs. 200 Per Month. And
DTH Services Have Lowest Price Rs. 90. (Starting Price) And Cable Provide
Services Starts With Rs. 250. So We Can Say Here No Huge Difference.

 So Threat From Substitute Is HIGH.

Availability Of Substitute Products:


HITS, The New Technology Is Being Looked At Positive By TRAI.HITS Has The End
Number Of Cable Operator Who Delivers The Signals To The End No. Of
Consumers.

• Mobile Television Is Also Coming Soon In The Market. DOOR


DHARSHAN Launched Its Mobile TV Pilot With Handset Major Nokia And
Samsung On DVB-H Platform.
• LG LCD With New Blue Race Technology Which Can Record A Program
At A Time Of Broadcasting In CD /DVD. Its Affects To Videocon LCD
Sales.

 Here Threats From Substitutes Products Are Moderate To High Because


Technology Used By Substitute.

Threats Of Substitutes
The Effect Of All Above Factors
Factors Low Moderat Moderat Moderate High
e To Low e To High

Determinants Of 
Substitution Threat
(Low)
Costs Of Switching To 
Substitutes (Low)
Availability Of 
Substitutes

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S. V. Institute of Management, KADI 2008-10
(Moderate To High)

Summary:

Threat From Substitute Is Moderate To High Because Substitutes Have Power On


Market And Also New Technology Is Positively Taken By Government. There Is No
Huge Difference In Price. So, Cost Of Switching Cost Is Low. Because Of It Threat
Is High. And Availability Of Substitute Is Moderate To High In Market. So, Threat Is
Also Moderate To High.

The Overall Threat Of Substitutes Is Moderate To High.

Bargaining Power Of Suppliers

DTH Industry Relies On Three Major Suppliers:

1. Customer Premise Equipment (CPE)


2. Comprising Of The Satellite Dish
3. Set-Top-Box With The Necessary Access Card.

Satellite:

The Ku-Band Transponders Are In The Orbiting Satellites And Content Are Few
Larger Suppliers. With India Set To Overtake Japan As Asia’s Largest DTH Market.
But Government Launches INSAT 4A, India’s Most Powerful Communication
Satellite. It Will Provide Direct-To-Home (DTH) Telecasts From Early 2006.

The Ku Band Transponder Is Generally Provided By Astrix, The Commercial Wing


Of ISRO Either Through Its Own Satellites Or By Leasing Transponders From
Suppliers. With Only Two Domestic Satellite Launches Between 2007 And 2010
An D Increasing DTH Players, Astrix Is In A Better Position To Use DTH. Also The
Crash Of INSAT 4C And NSS-8 Has Worsened The Situation Of DTH Players. As
There Is Not Much Of Regulation Particularly In Terms Of Channel Pricing,
Acquiring Content From The Broadcasters Is Also Difficult. DTH Vendors Are At
The Mercy Of The Broadcasters.45

Indian DTH Service Provider Can Take Initiative Of Indian Satellite For Large Area
Coverage From India As Well As Take Home Base Secure Service Satellite.

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Set-Top Box:

As Per A STB Equipment Provider Is Concern Indian Govt. Give An Advantage Of


Customs Duty On Set-Top Box Was Reduced To NIL In The Budget 2006,
Whereas, Inputs Attract Customs Duty Of 5/12.5%.

Most DTH Players Import Their Set-Top Boxes (STB) And Sell Their Products At A
Discounted Price To Consumers In A Bid To Grab Larger Volumes. A MPEG2 STB
Could Cost A Company Between $32-50 And Its Consumer Acquisition Cost Is
Around Rs 2,600-5,000 Per STB For The DTH Players. Similarly, MPEG4 STB Could
Cost A Firm Between $50-62 Taking The Subscriber Acquisition Cost For A DTH
Player Up To Rs 5,600 Per Set Top Box. So As A Service Provider Company Can
Import STB Like Tatasky Import Sky Broadcastings STB From USA For Low Cost
And High Quality Service?46

Here The Production Of DTH Instruments, Cables And Other Materials Is Very
Costly For The DTH Service Provider Companies So They Have To Be Dependent
On The Suppliers Of This Equipment. And Because Of This Reason Their
Bargaining Power Is High.

There Are Some Points Which Are Affecting Bargaining Power Of Supplier:

Backward Integration:
Industry Players Can Get Qualitative Raw Material At Affordable Price. So, They
Can Think To Do Backward Integration In Terms Of Set Top Box, Etc. And Also All
The Corporate House Can Do This.

 So, Bargaining Power Of Supplier Is Low.

Supplier Switching Cost:


The Decision Of Switch From One Supplier To Another Supplier Is Very Critical To
Any Manufacturer. Because At That Time They Have To Check The Cost Of
Switching From One Supplier To Another. But In This Industry It Is Very Low.
There Are Many Players Who Provide Dish And Set Top Box In The World.

 So, Bargaining Power Of Supplier Is Low.

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Forward Integration:
Supplier Of Raw Material Providers Can’t Easily Entered In This Industry. Because
There Is Need Of Huge Investment Required While Starting The Business In This
Industry.

 So, Bargaining Power Of Supplier Is Moderate To Low.

Bargaining Power Of Suppliers


The Effect Of All Above Factors
Factors Low Moderat Moderat Moderate High
e To Low e To High

Backward 
Integration
(Low)
Supplier 
Switching
Cost (Low)
Forward 
Integration
(Low)

Summary:

Bargaining Power Of Supplier Is Low Because There Is A Possibility Of Backward


Integration. Inter Firm Rivalry Is High Because Market Share Of The Players Have
Not More Differences. Supplier Switching Cost Is Low So Bargaining Power Of
Supplier Is Also Low. And The Determinants On Supply Power Are Not So Much.
So, Bargaining Power Of Supplier Is Moderate To Low.

The Overall Bargaining Power Of Suppliers Is Low.

Bargaining Power Of Buyers

There Are Many Factors Affecting Bargaining Power Of Buyers. As They Are Given
Below:

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Buyer Switching Costs:
The Cost Of Service In DTH Service Industry Is Not That Much High What
Consumer Cannot Afford To Change. So In This Industry Consumer Can Easily
Divert From One Brand To Another. There Are Several Reasons To Change The
Brand Like Price Level, Quality Of Set Top Box, Etc. In That Case Service Provider
Can’t Take Any Strong Action To Make Consumer Brand Loyal Each & Every
Players Are Provide DTH Service At Near To Same Price. That’s Why Consumer
Can Easily Change The Brands.

 Due To Low Switching Cost From One Brand To Another, The


Bargaining Power Of Buyer Is Moderate To High.

Brand Awareness:
Customers Are Becoming Literate And Take Interest To Get Aware About Different
Brands And Their Services Which Are Available In The Market. In DTH Service
Industry There Are No More Players But They Provide Many Different Services.
Mostly People Are Aware About Brands And Services, That’s Why They Can Easily
Find Out Which Product Is Good In Price, Quality Of Services, Etc. In This Industry
Mostly Each & Every Service Providers Are Concentrating On High Advertising To
Increase Awareness Of Their Brands And Services.

 Due To High Awareness Of Different Brands And Services, The


Bargaining Power Of Buyer Is Moderate To High.

Availability Of Substitute Products:


In Recent Time We Can Easily Find Substitute Product In This Industry. Substitute
Products Are Cable TV & IP TV. Customer Can Easily Get Both Of These Products
With Minimum Charges.

 Due To Easily Availability Of Substitute Products, The


Bargaining Power Of Buyer Is High.

Buyers’ Purchase Frequency:


DTH Service Is Such Kind Of Products That Consumers Cannot Purchase It
Frequently. But, Consumer Has To Do Recharge Monthly. They Have To Buy
Monthly Or Yearly Packages. Because Of These Reasons, Purchase Frequency Is
High.

 Due To This, Bargaining Power Of Buyer Is Moderate To High.

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Innovative Services:
In DTH Service Industry, Service Provider Every Time Launch Different Services
Via Different Types Of Recharges. Consumers Can Easily Get Recharge And
Monthly As Per Their Need.

Example: Reliance Big TV Provides 10 Different Types Of Monthly Pack.

 Due To This, Bargaining Power Of Buyer Is Moderate To High.

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Bargaining Power Of Buyers

The Effect Of All Above Factors


Factors Low Moderat Moderate Moderat High
e To Low e To
High
Buyer 
Switching
Costs (Low)
Brands 
Awareness
(High)
Availability 
Of
Substitute
Products
(High)
Purchase 
Frequency
(High)
Innovative 
Services
(High)

Summary:

Buyers Switching Cost Is Low So Bargaining Power Of Buyer Is Moderate To High.


Awareness About Different Brands Is Also High So Bargaining Power Of Buyer Is
Moderate To High. Substitute Products Are Easily Available So Power Of Buyer Is
High. Purchase Of Frequently Is Low So Power Of Buyer Is Also Low. There Are
Many Innovative Services So Bargaining Power Of Buyer Is Moderate To High.

The Overall Bargaining Power Of Buyers Is Moderate To High.

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Inter Firm Rivalry

No. Of Player In Industry:


No. Company Name Brand Name Launch Date:
1 Doordarshan (Prasar Bharti) DD Direct+ 2001
2 Zee Entertainment Enterprise Dish Tv Oct’2003
3 Tata Group And Star Group Tata Sky Aug’06
4 Sumangali Publications Private Sun Direct Dec’07
Limited
5 Bharti Telemedia Ltd. Airtel Oct’08
6 Reliance BIG TV Limited Bigtv Aug’08
7 Videocon Ltd. Videocon May’09

After Government Approval In 2000 Dish TV Is One The Pioneer In


Industry. In This Year Company Cross 5 Million Subscribers. Dish TV,
Part Of Media Conglomerate Zee Group Has 5.92 Million Subscribers In
The Month Of September. Dish TV Is Known For Its Innovation And Marketing
Starting With Roping In Shah Rukh Khan (Arguably The Biggest Brand In
India) For Advertising To Providing Wide Range Of Value Added Services With
Slogan “DISH KARO WISH KARO”. Dish TV Has Done It All. Recent Addition To Its
Innovation Is The Interactive Banking Services Called ICICI Active.

Tata Sky Is A DTH Satellite Television Provider In India, Using


MPEG-4 Digital Compression Technology. They Provide Service
Through First MPEG-2 And Second Adopted By NDS Technology. It
Is A Joint Venture Between The Tata Group, That Owns 80% And STAR TV That
Owns A 20% Stake. Tata Was Incorporated In 2004 But Was Launched Only In
2006. The Company Uses The Sky Brand Owned By British Sky Broadcasting. In
October 2008; Tata Sky Announced Launching Of PVR Service Tatasky+ Which
Allowed 45 Hours Of Recording In A MPEG-4 Compatible STB. The Remote Will Be
Provided With Playback Control Keys.

Sun Direct Is The Part Sun TV. Sun Direct Provide Dth Service
S From The December 2007. Company Was Incorporated As
Sumangali Publications Private Limited On December 18,

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S. V. Institute of Management, KADI 2008-10
1985.Sun Tv Also Provide Video Quality With Sound Quality. Sun Direct Have
Establish Dec.2007 And Now Have 4.3 Million Subscribers In India.

The DTH Service Of Bharti Airtel Comes From Its Subsidiary,


Bharti Telemedia Limited Launched In October 2008. They
Comes With MPEG 4technology.There Are Nine Interactive
Service Currently And Three Recharge Option And Airtel Has Been Position As A
Premium Player In The DTH Market.

Big TV Ltd. Is Part Of Reliance Communication Ltd. It Comes


In To Industry In August 2008 With Slogan “TV Ho Toh Big Ho”
("If You Have A TV, Make It BIG"). Now Company Going To
Planned Provide 400 Channels And Begin High Definition Broadcast. Company
Covers In One Year 2 Million Subscribers.

Videocon Industries, An India-Based Electronics Goods


Manufacturing Company Has Finalized May’09 As Launch Of
DTH Services With The Name Of 'D2H+'. The Company Will
Launch Integrated Digital Televisions (Idtvs) And Set Top Boxes (STBs). The
Company Is Planning To Sell 70-80 Per Cent Idtvs And 20 Per Cent STBs. The
Company Is Testing The STBs By Installing At Employees' Homes At No Cost. In
Addition, The Company Is Presently Ensuring A Strong Sales Network And Has
Been Recruiting Sales And Service Staff Through Its Media Arm, Bharat Business
Channel.

Market Share47:
Table 2 : Market Share
Company Name: Subscriber (Million) Market Share In (%)
Dish Tv 5.92 31.62
Tata Sky 4.50 24.04
Sun Direct 4.30 22.98
Airtel 2.00 10.68
Big TV 2.00 10.68
Video Con NA NA
DD Direct NA NA

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S. V. Institute of Management, KADI 2008-10
Dish TV Is Leader Of Industry. Dish TV Market Share Is 31.62% That Is Highest.
But We See Other Competitor Of Industry Not More Difference In Their Market
Share. Tata Sky Is Very Near To Cross The Dish TV On The Other Hand Big TV And
Airtel Able To Get The Market Share 10.68% Only In One Year. Now Recent
Videocon Enter Into Market. Videocon Is Ready To Beat To Their Rival. DD Direct
Is Also Public Company.

 Here, No. Of Player Is Only 6 (Not Including In DD Direct) Which Have High
Competition To Grab Market Share So. Interval Rivalry Is High.

Industry Growth:
Average Annual Growth Rate Of DTH Service Industry Is Around 30%, Which
Shows Demand Is Increases Rapidly. Rising Per Capita Income, Changing Life
Style, Etc. Have Driven Growth. So, Market Is Attractive For The New Players.

 So, The Threat From New Entry Is High.

Untapped Market:

In India Cable Operators Have Huge Market Share Than DTH And IPTV. Now DTH
Service Providers Have Huge Opportunity To Adopt The Market Share Of Cable
And IPTV. There Is Huge Demand In Rural Area Also That We Can Say Untapped
Market.

 There Is Huge Untapped Market For This Industry. So, Inter Firm Rivalry
Is Very High.

Promotional Activities:

All Companies In DTH Come With Different Types Of Schemes And Offers In The
Market. All The Time They Try To Attract More Numbers Of Customers With Huge
Marketing & Advertisement.
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 Mostly All Of The Players In Industry Introduced New Promotional
Scheme Almost In One Week Duration. So, Inter Firm Rivalry Is
Moderate To High.

Exit Barrier:
To Enter In This Industry, Entry Fee Is Rs.10 Crores Which Is Not Refundable. And
Also Establishment For Technology There Is Huge Investment Needed. This Also
Means That The Players Need To Have A Deep Pocket To Sustain The Losses Till
Then.

 So, Exit Barrier Is High. And Inter Firm Rivalry Is Also High.

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Inter Firm Rivalry
The Effect Of All Above Factors

Factors Low Moderat Moderate Moderat High


e To e To
Low High
Competition Between 
Companies (High)
Industry Growth 
(High)
Untapped Market 
(High)
Promotional Activities 
(Moderate To High)
Exit Barrier (High) 

Summary:

Inter Firm Rivalry Is High Because Market Share Of The Players Have Not More
Differences Between Their Market Share. Switch Cost Is Low So That Competition
Is High. There Is Huge Untapped Market And Thus New Strategy Adopted By The
Players. So It Is High & Moderate To High Respectively. Exit Barrier Is High For
Huge Investment In Industry. Thus
It Is Affected Negatively To Competition.

The Overall Inter Firm Rivalry High.

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S. V. Institute of Management, KADI 2008-10
Chapter 6
Driving Forces

Internet Technology Applications:

The Internet Is Proving To Be An Important As A Distribution Channel, Allowing


Manufacturers To Access Customers Directly Rather Than Distribute Exclusively
Through Traditional Wholesale And Retail Channel. By The Use Of Internet
Applications The Service Providers Provide The Product Offerings Of Competitors
And Shop The Market For The Best Value To The Customers.

Long Term Industry Growth:

Shifts In Industry Growth Up Or Down Are A Driving Force For The Industry
Change, Affecting The Balance Industry Supply And Buyer Demand. The Industry
Growth Of The Direct To Home (DTH) Is Around 30%, So The Industry Growth For
The DTH Companies Concern As A Driving Force, Which Plays An Important Role
For The DTH Service Providers.

Product Innovations:

The Innovation In The Product Is Very Important Factor Because The New Product
Creates The Market Demand Which Is More Important For The Any Player In The
Industry. Successful New Product Innovations Strengthen The Market Positions Of
The Companies With The Innovative Products. By The Product Differentiation The
Service Providers To Be The Market Leader Or From That The Companies Capture
The Market Share. The Product Innovations & Product Differentiation Will Be A
Competitive Advantage For The Company Among The Rivals Of The Industry.

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Technological Changes:

Advances In Technology Can Dramatically Alter An Industry’s Landscape. There


Are Gradually Upgrade In The Technology. So, The Improved Or Innovative In The
Technologies Of DTH Services Are Enforcing To Drive The DTH Service Industry.

Regulatory Influence:

TRAI (Telecom Regularity Authority Of India) & Ministry Of Broadcasting Both Are
The Governing Bodies For The DTH Industry By Which Regulated To The DTH
Industry. By The TRAI Recommend That The Import Duty On The Set Top Box
(STB) Removed Which Is Beneficial For The DTH (Direct To Home) Service
Providers And The Effects On The Customers Because By That The Price Of The
Set Top Box Reduced And The Benefit From That The Price Of STB (Set Top Box)
At The Low Cost To The Customers.

Changing Societal Concerns, Attitude & Lifestyles:

In India, Generally The Style Of The Family Pattern Is Nuclear Family. So It Helps
To The Family Members To Watch The Different Channel For The Different
Member Of The Same Family. After That The Lifestyles Of The Family Who Are
Using The DTH Services For Their Entertainment Is Different And Attitude
Towards The DTH Users Different More Than The Non-Users. Nowadays The DTH
Service Providers Also Provide The Common Dish For The Same Society.

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Key Success Factors
Innovative Services:

 Innovation In Service Provided By DTH Industry Is Must And It Has A


Significant Impact On Growth Of DTH.

 Dish Tv Is Comes With New Innovative Service Called A-La-Carte. This


Service Provides To Choose The Customer Extra 15 Channels From Their A-
La-Carle Packs.

 Dish TV Provide Active Service Like Job, Shaadi, Game Etc. They Provide
Special Bank Active Service That Called ICICI ACTIVE Through This You Can
Done Your Bank Transaction.

 Tata Sky Provides Tata Sky Offers A DVD Picture Quality And CD Quality In
Sound. Tata Sky Is Rated As Best Service Provider In The Industry.

 Tata Sky Come With New Service S Called Multi Dwelling Unit (MDU) Model.
This Model Provide One Dish Is Shared By Every Home Is A Good Way To
Attract The Group Of The Customer.

 Low Scheme And Package Charge By Sun Direct. They Offer Regional
Channel To All State In Their Packages.

 Big TV Provides PIP (Picture In Picture) Service. This Service Provide


Innovative Feature And Also Enable Customer To View Twelve Channels At
A Same Time.

 They Also Tied With The Oxygen For The Recharge With The Help Of Debit
Cards, Internet Banking, Mobile Mode Payment (SMS) Or By The Calling The
Toll Free Number.

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Distribution:

Intensive Distribution Must Be Used By All Players Because Of Cut-Throat


Competition. Availability Of Product Everywhere Is Very Important And For That
Strong Distribution Network Is Required.

 All The Players Of The DTH Industry Provide Their CPE Through Retailer And
Their Outlets.

 Dish TV Provide CPE Through Retailer Only And Big TV, Airtel Digital And
Tata Sky Provide Through Both Retailer And Their Own Outlay.

Innovative Marketing:

Marketing Is Most Important To Become Very Successful In Any Industry. To Grab


The Market Share And Subscriber Base, Player Done High Advertisement And
Marketing. By Creating Marketing Innovation You Can Easily Get Attention Of
Customer. Many Player Of This Industry Have Done Innovation In Marketing And
Spent Handsome Money Behind This.

 Dish TV Is Leader Of The Industry. It Comes With Most Successful Slogan


“Dish Karo Wish Karo” Through Brand Ambassador Shahrukh Khan
This Provide Them Most Successful To Grab Subscriber Base. They Are
Also Come With New 360 Dergee Approach In Marketing With Slogan
“Ghar Ayi Jindgi” To Compete With Tata Sky And Big TV.

 Tata Sky Enters Into Market With Brand Ambassador Amir Khan For Their
Advertisement. Through Amir Khan They Try To Make Aware About Their
Schemes.

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 Bid TV Is Also Not Behind In Promotion Activates. They Do Not Take Help
Of Any Brand Ambassador But They Done 360 Degree Angle
Advertisement With Popular Slogan “TV Ho Toh Big Ho”

Technology:

This Factor Is Very Important To Drive The Industry Because The Scope Of
Innovation In The Technology Is Very Wide And The Technology Is Upgraded Day
To Day.

 In The Industry The DTH Service Provider Provides The Moving Picture
Expert Group Version 2 (MPEG2), But Now A Days The Technology Is
Upgraded And Some Of The Service Provides The MPEG4 For The High
Standard Quality Picture At The Low Cost With The Innovative Features Like
Airtel Digital TV And Reliance BIG TV.

 Airtel - Uses The Latest MPEG4 Standard With DVB S2 Technology.

 Sun Direct Is Advanced Technology HDTV (High Definition Television)

 Reliance BIG TV Also Provides The MPEG4 With The Digital Video
Broadcasting (DVB) As Well As The Picture In Picture (PIP) System To The
DTH Service Holder.

Strategic Factors:

Exploit Bottlenecks:

In This Market, Content And Transponder Capacity Are Scarce And Controlled By
A Few Players.

With Content, Access To Unique Local Language Material Is Critical. In A Market


Like India, All A DTH Player May Need To Do Is Repackage Existing Channels That
Are Not Universally Available. In Sports, Some Players Have Won An Advantage
Through Long-Term Rights Purchases. Broadcasting Rights To Cricket In India, For
Example, Belongs To ESPN For The Next Five Years. It Also Controls The Right To
Football For West Bengal (The Most Popular League) For Ten Years.

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S. V. Institute of Management, KADI 2008-10
The Second Obvious Bottleneck Is In Transponder Capacity. A Modest DTH
Offering Is Likely To Require A Minimum Of 10 To 15 Transponders-Almost A
Dedicated Satellite. The Number Of Satellite That Can Broadcast To A Particular
Region Is Limited By Physics.

Move First:

In The DTH Industry, A Credible And Well Managed First-Mover Service Has A
Tremendous Advantage Over Others. In India, A First Mover May Effectively Shut
Out Competition.

Exploit Market Niche:

In Some Markets, The Segment Of Consumers Who Desire Highly Specific


Content May Be Large Enough To Form The Core Subscribership Of A DTH
Service. An Example Of This Could Be Again Cricket In Our Country.

A Few Things Are Assured In The DTH Industry Even In The Face Of Paradigm
Shifts. First, The Value Of Transponders Is Likely To Fall As Compression Allows
More And More Content To Go Through The Same Satellite, And As More Satellite
Are Launched. Second, As Bandwidth Explodes, So Will Demand For Content.
Obscure Sports And The Like Will Become More Valuable; Conversely, Much Of
The Content That Is Currently Valuable Will Face Downward Pricing Pressure.
Niche Content Providers Will Emerge.

The Industry Is Likely To Be Characterized First By A Period Of Fragmentation And


Then By An Increasing Concentration Of Global Consortia As Unprofitable
Participants Fold. What Is Clearer Than Ever Is That Satellite TV Is Here To Stay
And Will Play Role In Bringing Television To Mass Around The World?

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S. V. Institute of Management, KADI 2008-10
Chapter-7
Portfolio Models

BCG Matrix
Table 3: Players Subscription Figures

Company's Subscribers Market Relative


Name (In Millions) Share Market Share
Dish TV 5.92 31.62% 1.32
Tata Sky 4.50 24.04% 0.76
Sun Direct 4.30 22.97% 0.73
Airtel Digital
TV 2.00 10.68% 0.34
Reliance Big
TV 2.00 10.68% 0.34
Videocon D2h NA NA -
100.00
Total 18.72 %

I
Industry Growth Rate = 30%48
n
d
u
s
t
r Relative Market Share
y

G
r
o
w
t
h

R
a 1
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e
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High
R
T S & Figure 17 BCG Matrix
D A

10%

Low
10
1
0.1

(Here, D= Dish TV; T= Tata Sky; S= Sun Direct; R=Reliance Big TV; A= Airtel
Digital TV)

Strategies Of Players:

Dish TV:

• Dish TV Is India's Biggest Direct-To-


Home Company And Part Of The Biggest
Media Conglomerate --Zee Group. It
Offers 250 Channels And Services,
Including 21 Audio Channels And Has
Over 5.92 Million Subscribers.
• Dish TV Is A Satellite Provider In India,
Using MPEG-2 Digital Compression
Technology ,Transmitting Using NSS
Satellite At 95.0
• Dish TV Want To Grow With “Market Leader, Volume Leader And Value
Leader.”

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S. V. Institute of Management, KADI 2008-10
• Dish TV Have A Main Focus On Customer Satisfaction Through Providing
Customer Service And Value Added Service Dish TV Provide Innovation
Service 11 Languages That Named As “ACTIVE” Service. They Provide
Banking Interactive Service For That They Deal With ICICI Bank To Attract
To Customer.
• Dish TV Enters Into The Market With Huge Advertisement And Famous
Slogan And They Are Successful After Adopting This.

“Dish Karo Wish Karo”


• They Are Also Comes With Aggressive Marketing With Brand Ambassador
Actor Sharukh Kahn Following Slogan To Catch The Market:

“Ghar Ayi Jindgi”

“Home Home Again; I Like To Be Here When I Can"


• Dish TV Raising $100 Million Through Global Depositary Receipts To US
Based Private Equity Firm Apollo Management For To Increase Its
Subscriber Base And Improvement In Performance And Infrastructure.

TATA Sky:

• It Is A Joint Venture Between The Tata


Group, That Owns 80% And STAR Group
That Owns A 20% Stake.
• The Company Uses The Sky Brand Owned
By British Sky Broadcasting. Tata Sky Have
World Class Digital Infrastructure In
Partnership With Global Digital Technology.
• Tata Sky Provides DVR (Digital Video
Recording) Service (TATA Sky+) Which Allowed 45 Hours Of Recording In A
MPEG-4 Compatible Set Top Box. The Remote Is Provided With Playback
Control Keys. They Enter Into Market By Providing This Service.

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S. V. Institute of Management, KADI 2008-10
• In 2008, Singapore-Based Temasek Holdings Picked Up 10% Stake In Tata
Sky From The Tata Group.
• Tata Sky+ Is A Premium Set-Top Box-Cum-Personal Video Recorder That
Allows Recording Up To 45 (Now It Has Been Increased To 90 Hours Of
Recording) Hours Of Live TV, Recording One Program While Watching
Another, Pause A Live Telecast And Review A TV Program.
• Tata Sky Offers A DVD Picture Quality And CD Quality In Sound That Is
Unprovided By The Usual Cable Television Services Prevalent In India. This
Service Is Helpful To Tata Sky To Compete With Substitutes.
• Tata Sky Is Rated Best Player With The Provision Of Best Customer Service.
• Tata Sky’s Multi Dwelling Unit (MDU) Model Where One Dish Is Shared By
Every Home Is A Good Way To Win Customers Easily. When The
Infrastructure Is Already Created By An Operator, People Would Naturally
Opt To Go With Him.

Sun Direct:

• Sun Direct Is A 80:20 Joint Venture Between


The Tamil Nadu Based Maran Family And The
Astro Group Of Malaysia.
• Sun Direct Is Now Using Most Advanced
Technology HDTV (High Definition) Content.
This Technology Makes Their Service Very Effective And Better Quality.
• Sun Direct Provide Their Packages At Low Package Price Rs. 10 To Rs. 115
Per Month And Also.
• Sun Direct Consider To Be Rational In Terms Of Package In Terms Of
Schemes And Packages Set Top Box (STB) And Monthly Packages.
• Sun Direct Concentrates On Regional Channel.
• Sun Direct Using MPEG 4 Technology.

Airtel:
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S. V. Institute of Management, KADI 2008-10
• Bharti Airtel Makes Partnership With Infosys
Technology Ltd. For Entering Into An
Innovation And Technology To Deliver
Superior Experience To The Customer Of Airtel
Digital TV.
• Airtel - Uses The Latest MPEG4 Standard With
DVB S2 Technology, Which Translates Into Exceptional Picture Clarity And
Consistent High-Quality Audio For The Customer.
• It Brings Many Firsts To The DTH Segment In India Including A Universal
Remote Which Operates Both The Set Top Box And TV Set As Well As
Interactive Applications.
• The Main Attraction Is Their Set Top Box (STB) As The Appearance Of The
Airtel Digital STB Very Sleek And Stylish.
• Airtel Digital TV Started Of Its Marketing Campaign As A Very High Quality
Service Provider. Its Tag Line Is ‘Come Home To The Magic.
• This Marketing Compaign Helped In Creating A Niche Market.It Started Its
Marketing Campaign Primarily Targeting The Higher Income Viewers. It
Introduced Itself As A Very Classy Product Using A Lot Of Celebrities For
Advertisement Campaigns Along With Exquisite Use Of Colors And A Very
Handy As Well As Well Maintained Website.
• ‘Stars Come Home’ (March 2009), This Is Help To Airtel To Increase Its
Penetration As Well As Market Share. This Was A Unique Marketing Strategy
Followed By Airtel Digital TV.
• In Order To Increase Its Penetration As Well As Market Share, It Started
Several Innovative Promotion Packages. Where In One Or More Celebrities
Would Visit The Homes Of The Winners Of The This Was A Unique Marketing
Strategy Followed By Airtel Digital TV
Big TV:

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S. V. Institute of Management, KADI 2008-10
• Reliance Big TV Ltd. Is Part Of Reliance
Communication Ltd. It Comes In To Industry In
August 2008 With Slogan “TV Ho Toh Big Ho”
("If You Have A TV, Make It BIG").
• And Able To Become India’s Latest DTH Service
Provider Reliance Big TV Is Able To Achieve
Market Share Within One Year With Help Of
Huge Advertisement.
• Big TV Is First That Provide Service Through
MPEG-4 Technology In India.
• The Big TV Also Provides The Innovative
Features To Their Customers With The Picture
In Picture (PIP) That Would Enable Viewers To Watch Twelve TV Channels At
The Same Time On Any TV Set In The Country.
• Reliance Big TV Is First And Only DTH Operator To Launch 32 Movie
Channels And A Subscription Video On Demand Services.
• For The Brand Awareness The BIG TV Tied Up With The Top 15 Website Like
Yahoo, Google, Rediffmail, Etc.
• They Also Tied With The Oxygen For The Recharge With The Help Of Debit
Cards, Internet Banking, Mobile Mode Payment (SMS) Or By The Calling The
Toll Free Number.

Suggested Strategy:

Dish TV:

 As Dish TV Is Already Market Leader. So They Have To Go For Expansion Of


Distribution Network. So Customer Of Dish TV And New Customer Are Easily
Getting Their Service And Recharge Coupon Also.

 The Customer Is King Of The Market And To Win The Customer One Have
To Implement Service Marketing Concept And Provide Complete
Satisfaction To Customer. To Make The Customer Loyal, The Quality Of The
Service Provide By The Company Should Be Best And As Per Customer
Wants.

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 Service Provided By The Dish TV Is A-La-Carte. This Service Is Satisfy
Customer Need So, To Introduce This Type Of Service May Attract To
Customer.

 Dish TV Have To Adopted Aggressive Pricing Strategy To Attract To


Customer.

 Indian People Have More Value Of Their Region. Company Has To Adopt
The New Tie Up With Region Channel. And Also Introduce Packages. So
Customer Can Enjoy Their Region Channel In Other State Also.

 Tata Sky Introduces The TV Service On Mobile And Wheel. They Are Able To
Capture The Market. So, Dish TV Has To Introduce This Type Of Services.

 Company Has To Focus On Rural Expansion .There Is Huge Market To Grab


The Market Share.

Tata Sky:
 TATA Sky Is The Best DTH Service Provider Among The Rivals, So They
Should Maintain Their Position With The Differentiation On The Basis On
The Interactive As Well As The Sales After Service To The Customers.

 After That They Should Concentrate On The Top Of The Position With The
Innovation In Product As Well As The More Interactive Services Provide To
The Customers.

 They Should Also Provide The Recharge System Like The Reliance Big TV
Provides The Recharge Coupon For The Various Schemes.

Sun Direct:
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S. V. Institute of Management, KADI 2008-10
 Sun Direct Is The Silent Well Known Company In Indian DTH Industry.

 Awareness Of Sun Direct Is Less. So, Sun Direct Invest In More Awareness
About Service Provide By Company.

 India Is Having Tremendous Opportunity As More And More Diversify


Population Is Having. There Is Untapped Market In Urban As Well As Rural
Area. In Sun Direct Should Invest For More In Marketing And Advertising So
That Grab The Market Share.

 Sun Direct Should Also Provide Other Good Channel Packages Rather Than
Regional Channel.

 Sun Direct More Concentrate On The South India. So, Sun Direct Should
Cover The Other Region Of India As A Market.

BIG TV:

 Reliance Big TV More Focuses On Their Product Promotion And Innovation


In The Technology For Their Product. So, They Should Also Deliberate On
The Services Like, TATA Sky Provides The Interactive And Active Service,
Stock Ticker Etc.

 They Should Also Concentrate On The Development Of Market By Their


Distribution Channel Or The Sales After Service.

 They Should Focus On The Development Of Rural Market As They Have


Strong Back Up Of Parents Company.

Airtel Digital:
 Airtel Digital More Focuses On Their Product Promotion And Innovation In
The Technology For Their Product. So, They Should Also Deliberate On The

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Services Like, TATA Sky Provides The Interactive And Active Service, Stock
Ticker Etc.

 They Should Also Concentrate On The Development Of Market By Their


Distribution Channel Or The Sales After Service.

 They Have To Use Parents Company’s Resource As It Is Very Good In


Distribution Of Services.

GE9 Cell Matrix

Business Strength

Business Weig Sun Airtel Videocon


Strength ht Dish TV Tata Sky Direct Digital Big TV D2h
Ratin Scor Rati Scor Rati Scor Rati Scor Rati Scor Rati Scor
g e ng e ng e ng e ng e ng e
Market
Share 0.25 9.00 2.25 7.50 1.88 7.50 1.88 5.00 1.25 5.00 1.25 2.00 0.50
Financial
Resources 0.20 7.00 1.40 8.50 1.70 8.00 1.60 7.50 1.50 7.50 1.50 4.00 0.80
Brand
Reputation 0.15 7.50 1.13 7.50 1.13 6.50 0.98 7.00 1.05 7.50 1.13 6.00 0.90
Distribution
Capacity 0.12 8.00 0.96 7.00 0.84 6.50 0.78 6.50 0.78 7.00 0.84 5.50 0.66
Advertising
Capabilities 0.15 8.50 1.28 7.50 1.13 7.00 1.05 7.00 1.05 6.50 0.98 4.00 0.60
Ability To
Compete
With Rivals 0.13 8.00 1.04 7.00 0.91 7.50 0.98 7.00 0.91 7.00 0.91 5.00 0.65
1.00 8.05 7.58 7.26 6.54 6.60 4.11

Industry Attractiveness

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DTH Service
Industry
Industry Weig Ratin
Attractiveness ht g Score
Current Market Size 0.20 8.00 1.60
Regulatory Environment 0.15 7.00 1.05
No. Of Competitors 0.12 6.50 0.78
Barriers To Entry 0.10 7.00 0.70
Market Growth Rate 0.13 7.50 0.98
Industry Profitability 0.15 8.00 1.20
Technology Change 0.15 7.50 1.13
1.00 7.43

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Business Strength

T S V
D R A
At t rac

3.33
venes
ndus
t ry

ss
t
6.67 I

10 6.67 3.33
0 (Here, D= Dish TV; T= Tata Sky; S= Sun Direct;
R=Reliance Big TV; A= Airtel Digital TV;
V=Videocon D2h)

Table 4 GE9 Cell Matrix Position

Industry Attractiveness:

 Curren
t Market Size: Market Size Is An Important Parameter For Any Company. And
Near About 11mn. Thus We Give 0.20 Weights To This Industry.

 Regula
tory Environment: Government Plays Very Dominant Role In Any Industry’s
Growth. In This Industry Government Makes Some Favorable Rules For
Company’s Growth And Also Makes Some Strict Rules To Prevent Company’s
Unethical Activity. Thus We Give 0.15 Weights.
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 No. Of
Competitors: In This Industry Starting Requirements Are Not So High. But, To
Develop Business Company Has To Make Some Extra Expenses. This Prevents
The Small Corporate House In This Industry. And This Factor Is Important For
Any Industry. Thus We Give 0.12 Weights.

 Barrier
s To Entry: As This
Is Important Factor For Any Industry. But, In This Industry It Is Not So Much
High. So, We Give 0.10 Weights To This Factor.

 Market
Growth Rate: As The Growth Rate Of This Industry Is Very Good. It Is Attractive
For Any Company. Thus We Give 0.13 Weights To This Factor.

 Industr
y Profitability: As Industry Profitability During Beginning Years Is Not So Good
In This Industry. Because Operating Expenses Are Very Much During This Year.
Thus We Give 0.15 Weights To This Factor.

 Techno
logy Change: We Can Say That As It Is Key Success Factor For This Industry.
Because DTH Service Is Based On Satellite. Thus We Give 0.15 Weights To
This Factor.

Business Strength:

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S. V. Institute of Management, KADI 2008-10
 Market Share: Market Share Decides Which Company Has Good Positions In
Industry. And It Is Very Much Needed While Evaluating Any Company. Thus We
Give 0.25 Weights To This Factor.

 Financial Resources: Financial Resources Help To Develop Any Company


Which Is Very Much Needed In This Industry. We Can See That Mostly All The
Company Has Good Background. Thus We Give 0.20 Weights To This Factor.

 Brand Reputation: It Is Always A Good Factor For Any Company. As In This


Industry All Companies Have Their Own Brand Image. Thus We Give 0.15
Weights To This Factor.

 Distribution Capacity: As This Is Service Industry And Customers Purchase


Not Frequently This Service But Almost Every Month They Have To Do
Recharge. So, Company Has To Provide It In Good Quantity. Thus We Give
0.12 Weights To This Factor.

 Advertising Capabilities: As This Is Emerging Industry And There Is Very


Huge Untapped Market In Various Segments. So, Company Has To Spend
Much Budget Behind Advertising. Thus We Give 0.15 Weights To This Factor.

 Ability To Compete With Rivals: This Is An Emerging Industry. So, Each And
Every Company Is Trying To Get Good Market Share. For That, They Have To
Bit Each Other. Thus We Give 0.13 Weights To This Factor.

Implications:

As The Industry’s Attractiveness Of DTH Service Industry Is Very Good. And Dish
TV Is The Leader Of This Industry Followed By TATA Sky, Sun Direct TV, Reliance
Big TV, Airtel Digital TV And Then Videocon Which Is Entered Just Before 3 To 4
Months. The Competition Between All This Companies Is Very Hard. But The

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Target Is Not Same. Because TATA Sky And Sun Direct Compete With Each Other.
And Airtel & Reliance Compete With Each Other. Dish TV Is Ahead Of All These
Companies.
As We Can See The Figure Of GE 9 Cell Which Shows That To Invest In This
Industry Is Good For The Companies.

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ADL (Arthur D. Little) Matrix

Competitive Position
Business Airtel Videocon
Strength Weight Dish TV Tata Sky Sun Direct Digital Big TV D2h
Ratin Scor Ratin Scor Ratin Scor Ratin Scor Ratin Scor
Rating Score g e g e g e g e g e
Market Share 0.25 9.00 2.25 7.50 1.88 7.50 1.88 5.00 1.25 5.00 1.25 2.00 0.50
Financial
Resources 0.20 7.00 1.40 8.50 1.70 8.00 1.60 7.50 1.50 7.50 1.50 4.00 0.80
Brand Reputation 0.15 7.50 1.13 7.50 1.13 6.50 0.98 7.00 1.05 7.50 1.13 6.00 0.90
Distribution
Capacity 0.12 8.00 0.96 7.00 0.84 6.50 0.78 6.50 0.78 7.00 0.84 5.50 0.66
Advertising
Capabilities 0.15 8.50 1.28 7.50 1.13 7.00 1.05 7.00 1.05 6.50 0.98 4.00 0.60
Ability To 0.13 8.00 1.04 7.00 0.91 7.50 0.98 7.00 0.91 7.00
Compete With
Rivals 0.91 5.00 0.65
1.00 8.05 7.58 7.26 6.54
6.60 4.11

Industry Maturity

Year Subscribers (In Millions)


2003 0.00
2005 1.00
2007 4.00
2009 18.70

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Figure 18 Industrial Life Cycle

Industry Maturity
10
Embryonic Growth Mature Aging
Dominant

7.5 T

Strong
S

Competitiv R
e A
Position

5
Favorable

2.5

Tenable

Figure 19ADL (Arthur D.


Little) Matrix

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Implication:

As Per This Model Industry Maturity Is Devided Into 4 Stages. Embryonic, Growth, Mature
And Aging. And Competitive Position Is Devided Into 4 Categories. Dominant, Strong,
Favorable And Tenable.

Above Figure And Calculation It Is Easily Interpret That DTH Industry Is In Growing Stage.
And Dish TV Is Leader Followed By TATA Sky , Sun Direct TV, Reliance Big TV, Airtel
Digital TV And Then At Last Videocon D2h.

Dish TV Has To Invest In Rural Area As It Entered In Urban Area. Because In Rural Area
Penetrated By Only DD Direct+ Which Is Government Players. They Provides Lifetime
DTH Service Against Of Single Time Payment. So, Dish TV Has To Make Any New
Strategy Which Is Increase Their Market Share.

TATA Sky Which Is Followed By Dish TV Provides DVR (Digital Video Recording) Service
(TATA Sky+) Which Allowed 45 Hours Of Recording In A MPEG-4 Compatible Set Top Box.
It Is Also Provide Service To The Urban Area Mostly. So, It Has To Increase Their
Investment Which Is Helpful To Grab Untapped Market.

Sun Direct TV Has Their Own Competitive Advantage As It Is Providing More Number Of
Regional Channels. But, Sun Direct Mostly Covered Only South Indian Market. So, It Has
To Change Their Region And Has To Enter In Other India’s Part Also.

Reliance Big TV Is First And Only DTH Operator To Launch 32 Movie Channels And A
Subscription Video On Demand Services. Reliance Big TV Has First Mover Advantage Of
MPEG 4 Technology. Reliance Has To Start New Extra Channel. Like, A-La-Carte (Dish
TV), Interactive Service (TATA Sky). So, New Customer Can Attract By This Extra
Services.

Airtel Brings Universal Remote Which Operates Both The Set Top Box And TV Set As Well
As Interactive Applications. As It Provides Good Distribution Channel. But, Sometimes
Their Consumers Do Not Find Recharge Coupon Very Easily. So, Airtel Has To Focus On
This Problem.

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Videocon Which Entered In May 2009 Has To Focus On Untapped Urban Market. Their
Market Share Is Not Much. It Has To Invest In Advertisements As All Other Players Do
Well. It Has To Select Good Brand Ambassador Who Has Good Image In Public.

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Diamond Model49

Figure 20 Michel Porter’s Diamond Model

Government

Rules For Licensing:

1. No. Of Licenses Issued: There Will Be No Restrictions On The Number Of


DTH Service Provider To Issue The License, The License Issued By Any New
Service Provider Who Fulfils The Terms And Conditions Which Are
Regulated By TRAI (Telecom Regularity Authority Of India).
a. TRAI Also Regulated The Security And Technical Clearances Service
Provide To The DTH Service Holders By The Appropriate Authorities
Of The Government.
2. Validity Of License: Wireless Planning And Coordination Wing Of Ministry
Of Communication, The Rules And Regulation Of The Government The
License Provide To The DTH Service Provider Which Is Valid Up To 10 Years
From The Date Of Issue Of Wireless Operational License.
3. DTH License Fee Reduction: The Ministry’s Move To Reduce The License
Fee For DTH Players From 10% Of Gross Revenue To 6% May Soon Bear
Fruition. Secretary Singh Said The Ministry May Be Able To Announce This
Soon. This Process Has Been On For Nearly A Year. Due To The Multiplicity
Of Agencies—Telecom Regulator TRAI, I&B Ministry And The Finance
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Ministry Are Involved In This Decision—The File Seems To Have Been
Moving Back And Forth For Nearly An Entire Year. One DTH Industry Source,
Who Has Followed The Policy Change Closely, Told Us That The First Time
Around, The Finance Ministry Had Some Reservations About The Change
After I&B Ministry And TRAI Had Approved The Change. So The Ministry Had
To Make Some Amendments And Get TRAI Recommendation Once Again
And The File Has Gone Back Again To The Finance Ministry. Singh’s
Reiteration Of The Decision May Be An Indication That The Ministry Is
Expecting The Finance Ministry’s Nod Soon.
4. Laws For The Termination: Either Party Has A Right To Terminate This
Agreement On Immediate Written Notice To The Other In The Event Of:
5. Material Breach Of This Agreement By The Other Party Which Has Not Been
Cured Within Thirty (30) Days Of Being Required In Writing To Do So; The
Bankruptcy, Insolvency Or Appointment Of Receiver Over The Assets Of
The Other Party;
6. The DTH License Or Any Other Material License Necessary For DTH Co. To
Operate Its DTH Service Being Revoked At Anytime Other Than Due To The
Fault Of DTH Co.
7. GBN Shall Have The Right To Terminate This Agreement On Written Notice
To DTH Co. If DTH Co. Breaches Any Of The Anti Piracy Requirements And
Fails To Cure Such Breach Within Two (2) Days Of Being Required In Writing
To Do So, Or GBN Discontinues CNN-IBN With Respect To All Distributors In
The Territory And Provides DTH Co. With At Least Ninety (90) Days Prior
Written Notice.
a. DTH Co. Shall Have The Right To Terminate This Agreement On
Written Notice To GBN If DTH Co. Discontinues Its DTH Business And
Provides At Least Ninety (90) Days Prior Written Notice.
8. Termination Of This Agreement Shall Not Affect Any Continuing Obligations
Of Each Of The Parties, Including Any Rights And Obligations Relating To
Indemnification And Audit.

Trade Restrictions And Tariffs

Rationale For Making Amendment To The Direct To Home


Broadcasting Services (Standards Of Quality Of Service And Redressal
Of Grievances) Regulations, 2007:

1. No Visiting Or Repair And Maintenance Charges Of DTH Equipment During


Warranty Period. TRAI: The DTH Operators Have Been Prohibited From
Charging Any Fee Towards Visiting Charges Or Repair And Maintenance
Charges Of DTH Consumer Premises Equipment During The Period Of

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Warranty For Such DTH Consumer Premises Equipment Acquired On
Outright Purchase Basis.
2. The DTH Operators Cannot Alter The Subscription Package During The First
6 Months, Or Till Validity Expiry, Of A Subscriber's Enrollment. TRAI: The
DTH Operators Have Been Prohibited From Changing The Composition Of
Their Subscription Packages During First Six Months Of Enrolment To The
Subscription Package Or During The Period Of Validity Of A Prepaid
Subscription Package, Whichever Is Longer.
3. In Case A Channel Is Removed From A Subscription Package In The First 6
Months Of Enrollment, The DTH Operator Must Reduce The Price
Proportionately, Or Replace The Removed Channel With One Of The Same
Genre And Language. TRAI: The DTH Operators Have Been Mandated To
Proportionately Reduce The Subscription Charges For A Package From
Which Any Channel Is Removed For First Six Months Of Enrolment Or
During The Period Of Validity Of A Prepaid Subscription Package, Whichever
Is Longer Or To Replace The Channel With A Channel Of Same Genre And
Language.
4. The Option Of Choosing The Package With Reduced Charges Or The
Package With Replaced Channel Has Been Given To The Subscriber.
5. In Case A Removed Channel Needs To Be Replaced, The Replacement
Option Will Be In The Hands Of The DTH Operator. TRAI: Option To Select
The Channel Of The Same Genre And Language In A Subscription Package
To Replace A Channel Which Has Become Unavailable On The DTH
Platform, Has Been Given To The DTH Operator.
6. Your DTH Operator Needs To Give A Prior Notice Of Fifteen Days To You
Before Changing The Composition Of Any Subscription Package.
7. Subscribers Are Allowed To Request Their DTH Operator To Suspend Their
Services
8. For Up To 3 Months. However, This Suspension Period Should Not Comprise
The Same Calendar Month. TRAI: DTH Operators Have Been Mandated To
Entertain Requests Of DTH Subscribers For Suspension Of Services If
Requested Period Of Suspension Does Not Exceed Three Calendar Months
And Does Not Comprise Part Of A Calendar Month.
a. The Above Rules Are Compulsory For DTH Operators To Adhere To.
i. The Licensing Norms Of This Industry Is Not So Much Strict.
Because Of This Norms Provide Easy Entry And Exit To DTH
Players. But, The Service Norms Are Somewhat Strict.
Companies Have To Give Good Services To Their Customers
Especially To Set Top Box. They Don’t Take Any Repairing
Chargers During Warranty Periods. DTH Providers Also Can’t
Change The Composition Of Subscription Of Customer’s
Schemes Till The Expiry Date Of Their Enrolment.
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Foreign Direct Investment:

The Ministry Of Information And Broadcasting (I&B) Reiterated That It Is Working


Towards Raising The FDI Cap In The Media Distribution Platforms Like Direct-To-
Home (DTH) To 74% From The Current 49%. “We Are Considering The Case Of
Raising The FDI Ceiling In DTH To 74%”- Said By Uday Verma, Additional
Secretary, At The IDNS Conference.

By The FDI (Foreign Direct Investment), The Quality Of Domestic Institutional


Environment Has Been Improved. An Effective Education And Training System
Upgrades The Skill Level Of The Workforce And Improves The Socio-Political
Climate In The Country. FDI Includes Infrastructure Availability, Quality Of The
Banking System, Market Size, Repatriation Of Profits, Characteristics Of Trade
And Competition Policy Consistency And Predictability. Ministry Of Information &
Broadcasting Has Requested The Authority To Give Its Recommendations On
Foreign Investment Limits For Various Segments Of Broadcasting Sector. This
Consultation Paper Raises Issues Relating To Foreign Investment Limits For
Broadcasting Sector. The Telecom Regulatory Authority Of India (TRAI) Solicits
The Views Of All The Stakeholders On The Issues Raised In The Consultation
Paper.

Government Stability

The Era Of Coalition Politics Had Arrived, And It May Be Some Time Before A
Single Party Government Comes Into Power. The Regionalization Of Indian Politics
Has Also Led To State-Level Innovation And Greater Competition Between The
State Governments To Attract Foreign Capital.

There Is Change In The Political Party And Their Rules For The Particular Company
And Its Service Provides Style. Instability In Rules And Regulation By The
Government As A Ruling Party, As Evidenced In The Pattern Of Shifting Alliances
And Collapsing Governments That Has Marked Recent Policies.

Government Policy:

Government Is Helping To The Industry As Reduced Import Duty Of STB (Set Top
Box) To Zero Percent From 7.5 %. But The Final Amount Paid By Importer Will

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Depend On Exchange Rate. The Finance Minister Has Also Removed Duty On
Import Of Specified Parts Of The Set Top Boxes. This Will Provide Leverage And
Opportunity For DTH Players To Evaluate The Option Of Manufacturing Set Top
Boxes (STB) Locally. Since The CVD (Counter Veiling Duty) Is Reduced From 16
Percent To 14 Percent, The Cost Of The C.P.E (Customer Premises Equipment)
Will Go Down To The Similar Affect And Will Benefit The DTH Operator Who
Already Providing Considerable Subsidies To Consumer And Will Further
Accelerate The Date Of Digitalization In The Country.

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Firm Strategy, Structure And Rivalry

No. Of Players And Market Share:50


Company Name: Subscriber (Million) Market Share In (%)
Dish TV 5.92 31.62
Tata Sky 4.50 24.04
Sun Direct 4.30 22.98
Airtel Digital 2.00 10.68
Big TV 2.00 10.68
Videocon D2h NA NA
DD Direct NA NA

There Is Strong Competition Among The Players To Grab The Market Share And
New Player To Come In The Market With Innovative Services And New
Technology. Videocon Comes With A Special Power To Push This Technology As
In Their New LCD Or Flat TV Has Facility Of STB.

Dish TV Have Innovative Service A-La- Carte And Tata Sky Is Also Provide Active
Service To Satisfy The Needs Of The Consumers. Videocon Comes With New
Services Like IDTV And STB With LCD. As This Different Service Provide By
Different Company At Same Rate And Also Make High Advertising Make Customer
To Switch One To Another.

Because Of High Market Share, Rivalry Among Competitor Is High.

Industry Growth:
Average Annual Growth Rate Of DTH Service Industry Is Around 30%, Which
Shows Demand Is Increases Rapidly. Rising Per Capita Income, Changing Life
Style, Etc. Have Driven Growth. So, Market Is Attractive For The New Players.
 So, The Threat From New Entry Is High.

Untapped Market:
In India Cable Operators Have Huge Market Share Than DTH And IPTV. Now DTH
Service Providers Have Huge Opportunity To Adopt The Market Share Of Cable
And IPTV. There Is Huge Demand In Rural Area Also That We Can Say Untapped
Market.

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 There Is Huge Untapped Market For This Industry. So, Inter Firm Rivalry
Is Moderate To Low.

Promotional Activities:
All Companies In DTH Come With Different Types Of Schemes And Offers In The
Market. All The Time They Try To Attract More Numbers Of Customers With Huge
Marketing & Advertisement.

 Mostly All Of The Players In Industry Adopt New Technology And


Strategies. So Inter Firm Rivalry Moderate To High.

Exit Barrier:
To Enter In This Industry, Entry Fee Is Rs.10 Crs. Which Is Not Refundable. And
Also Establishment For Technology There Is Huge Investment Needed. This Also
Means That The Players Need To Have A Deep Pocket To Sustain The Losses Till
Then.

 So, Exit Barrier Is High.

Demand Condition

 Demand Condition Is More Affected To DTH Industry. This Is Dependent On


The Customer View And Preference. There Is Potential Market For DTH
Industry Because The DTH Industry Is Emerging Industry For India.

 There Are Many Factors Are There Which Can Create Demand For DTH
Services Among In Consumer.

 Consumer Needs Are Never Satisfy. If We Satisfy One Need Then Another
Need Should Be Emergence. Consumer Wants New Innovation And New
Packages For Their Preference.

 To Satisfy Their Need Each And Every Company Come New Innovation In
Their Scheme And Services Like Dish TV Provides A-La- Carte Services This
Provides 15 Channel As Per Consumer Choice. Dish TV Is Also Provide ICICI
ACTIVE With Help This Consumer Make Bank Transaction With ICICI Bank.
Tata Sky Also Provides Active Service On Wheel And Mobile.

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 Demographic Factor Includes Age Of Indian People In That Young Indian Is
Growing And Which Is High In The World.

 PPP (Purchasing Power Parity) Is Also Increasing Year By Year. People Are
More Spend On Entertainment. So Demand Of Services Is Also Increase.

 Due People Shift To One State To Another State For Their Job Or Any Other
Reason For That DTH Service Provide Their Regional Channel To Anywhere
In India.

 Marketing And Service Innovation Is Helpful To Generate Demand And


Attract To More And More Customer For DTH Industry.

 Demand Is Looking Very Attractive To The New Player Comes In DTH


Industry.

Implication:

There Are Number Of Needs From The Customer. If One Need Satisfied By The
Customer Then Arise Another Need By The Customers. So, The Demands From
Customers Are Infinite. And The Demands Which Are Demanded By The
Customers Are More Important To Achieve That Needs. The Customers Want The
Improvement In Technology And The Reducing In The Price Of The DTH Service.

Related And Supported Industry


Related Industry:

1. Cable Industry:
This Is The Most Affecting To The DTH INDUSTRY. Cable Television, Originating As
Community Antenna Television (CATV), Took Advantage Of Coaxial Cable To
Provide Individual Homes With Television Signals Received By A Large Antenna.
Most Of The Viewers Still Prefer Cable Because In Indian People Bound With
Traditional Activities. Cable Industry Covers All Most Market In India.
So, DTH Industry Has Tough Competition To Cable.

2. IPTV:

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IPTV Is Like Cable TV, But It Uses A Broadband Connection To The Internet
Instead Of Cable For The Delivery Of Video Services. IPTV Works On Your TV With
A Set-Top Box That Accesses Channels, Subscription Services, And Movies On
Demand. The Advantage Over Cable Is That The Communication Can Be Two-
Way, Making Customized Programming And Interactive Media Possible Without
An Additional Connection.

The Policy On IPTV Offers Greater Clarity On The Issues Involved, And Both The
Telecom Operators And The Cable Operators Are Able To Provide An IPTV Service
Which Is To Be Regulated As Per Their Respective Licensing Conditions. IPTV
Provide Same Service As DTH Provide. IPTV Provide Services Have Been Very
Attractive Levels With The Subscription Charges Depending On City And Provide
Set Up Box Free With Refundable Security Deposits. And They Provide Unique
Features. IPTV Is Expected To Take Some Time To Catch Up S Infrastructure To
Cover Wider Scale.

Implication:
DTH Industry Is At A Growing Stage. Above Two Are Main Substitute DTH
Industry. There Is No Huge Different In Their Price And IPTV Are Now Going To
Expand Their Infrastructure So IPTV Can Become Threat To DTH Industry.

Supporting Industry:

1. Media And Entertainment Industry


Media And Entertainment Has Emerged As One Of The Fastest Growing Sectors
Of The Economy. In The Last Few Years There Has Been An Exponential Growth In
The Number Of Television Channels And Also Private FM Radio Operators. These
Are Providing Quality Entertainment And Information Across The Country.

The Boom In The Broadcasting Industry Is Reflective Of The Dynamism Of Indian


Entrepreneurs And A Liberal Economic Policy Pursued By This Government.

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Trends In Entertainment & Media (E&M) Industry

The Entertainment And Media Industry Has Demonstrated Tremendous


Dynamism In The Recent Years. In The Last Financial Year It Witnessed A Growth
Of 17% And The Television Industry Is Expected To Grow Annually At Around 22%
And DTH Industry Grows Around 30%.51

DTH Industry Is Running On Media And Entertainment Totally. With The Support
Of Media And Entertainment Dth Can Provide Its Services. All Program And
Movies Create An Entertainment Which DTH Provide To The Customer Through Its
Services.
All Channels Which Running In Media Collaborate With The DTH. So Through
Different Channels Viewers Get The Entertainment..

2. TV Industry:

Television In India Is A Huge Industry And Has Thousands Of Programmes In All


The States Of India. The Small Screen Has Produced Numerous Celebrities Of
Their Own Kind Some Even Attaining National Fame. TV Soaps Are Extremely
Popular With Housewives As Well As Working Women. Several Small Screen
Actors Have Made It Big In Bollywood. Approximately Half Of All Indian
Households Own A Television.

The Television Industry Is Witnessing A Spate Of New Channels Being Launched


Every Year. TV Is Also Penetrating Into The Rural Areas And Is A Promising
Segment. Homes With Tvs Are Expected To Grow From 112 Million To 200 Million
In A Few Years. CAGR Is 24% Of TV Industry. Growth Of DTH Industry Is Very
Much Affected By TV Industry Growth.52

DTH Industry Links With The TV Industry In All Ways. All Services Provided By
DTH Are Being Reaching Through TV. Both Industries Depend On Each Other.
Innovation Of TV Industry Is Also Effective For DTH Growth.

Implication:

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Supporting Industry Is Very Necessary To Run The Any Industry. Media And
Entertainment Industry And Television Industry Is Supported Industry. Without TV
Industry, There Is Not Existence Of DTH Industry. And Media And Entertainment
Industry Support To Run Business Of DTH.

Factor Conditions

There Are Some Factors Which Are Very Important For Any Industry. For, DTH
Service Industry It Is Given As Below:

Geographical
To Evaluate Market Condition The Geographical Factors Are Important.

1. Channel:

The Direct To Home (DTH) Service Providers Provide The Different Schemes For
The Different Region. The DTH Service Providers Are Much More Emphasis On The
Cultural As Well As The Region Wise. The Dish TV Provides The A-La-Carte
Schemes On The Basis Of The Preference & Tastes Of The Customers. While The
Tata Sky Provides The Active Services For The Latest Updated Information
Related Specific Features Provides To The Customers.

2. Different Area:

This Is Very Important Factor For The DTH Industry Because The DTH Technology
Is Very Used When The Peoples Migrate Or Shift From One Place To The Other
Place. So The Equipments Of The DTH Service Are Helpful While Migrating.

3. Connectivity:

The Connectivity Of The DTH Technology Is Very Easy To Set Anywhere Because
Recently The Tata Sky Launches The New Product For The Car Users. Tata Sky
Also Introduces The DTH Service For The Car Which Is Applicable In The Car. So,
The Connectivity Of The DTH Service Based On The Satellite Which Is More
Powerful Than The Other Components. So The Connectivity Is Very Important To
Provide The DTH Services To The Customers.

4. DTH Is Everywhere:

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In The DTH Industry The Service Providers Provide The Service To The Customer
At Anywhere. The Cable Operators Are Not Easily Available Everywhere Because
The Cable Operator Almost Depends On The Cable, Which Is Not Possible At
Everywhere While The DTH Depends On The Transmissions From The
Department. It Is Possible.

National Resources

1. Satellite: The DTH (Direct To Home) Service Providers Are More Emphasis On
The Satellite, Because The Satellite Is One Of The Crucial Components To
Provides By The DTH Services To The Customers With The High Picture Quality
And Also Provides With The Interactive Services With The Latest Updates.

2. Airtime: The Duration During Which A Radio Or Television Program (Or Part
Of One) Is Transmitted.

Investment
In India There Are More Than 3,000 Financial Institutions Are Available. It Includes
Indian As Well As Foreign Banks Among That Some Are The Big Players Who Are
Able To Provide The Capital To The New Players Or To The Existing Players For
The Establishment Or For The Growth Of That Company As Well As The Overall
Industry As Per Their Requirement. So, That There Is Not Difficult To Get Capital
For Any Business Person In India.
The Requirement Of The Capital Is High For The DTH Players. They Have To Give
Rs. 10 Cr As Initial Deposit Which Is Non-Refundable And Also Do Investment In
Technology. The Continuous Investment Depends On The Continuous
Improvement In The Technology With The Latest Features, So The Investment
Also Very Much More Needed For To Adopt The Newly Technology.

Raw Material:
Raw Material Is Main And Important Factor For Any Industry. In DTH Industry Raw
Material Is Set Top Box And Dish. STB Is Imported By DTH Companies.
Government Now Favour For Set Top Box Buyers. Import Duty On STB Is Zero To
7.5% But Final Amount Paid By Imported Will Depend On Exchange Rate. So It Is
In Favour Of DTH Players.

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Implication:
The Above Components Of Factor Condition Like, Geographical, Raw Material,
Investment And Other Factors Help Very Widely To The DTH Industry. The
Geographical Factor Affects By The Channel On The Basis On The Region And For
That Connectivity Of The DTH Service More Important To The Customer. National
Resources Are Also Important Because The Satellite Is The Main Components For
The DTH Service Industry. Generally The Stbs (Set Top Box) Import From The
Outside The Country. So, DTH Service Providers Provide The Service At Low Cost
To The Customers.

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Value Chain Of Industry

Value Chain Analysis:

Value Chain Analysis Help Companies To Analyze Specific Activities, Through Which
Firms Can Create A Competitive Advantage, It Is Also Useful To Model The Firm As A
Chain Of Value Creating Activities. Michael Porter Identified A Set Of Interrelated Generic
Activities Common To A Wide Range Of Firms. The Resulting Model Is Known As The
“Value Chain” And Is Depicted Below. The Goal Of These Activities Is To Create Value
That Exceeds The Cost Of Providing The Product Or Services, Thus Generating A Profit
Margin.

The Following Diagram Contained Value Chain Of The Industry, Which Includes Primary
As Well As Supporting Activity. Contribution Of Each And Every Activity Has Been
Mentioned As Follow As Particularly For DTH Industry.

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Value Chain

Over The Last Three Years, The Direct-To-Home (DTH) Satellite Industry Has Come On
Strongly Worldwide. It Has Grown From A Niche Delivery Mechanism Into A Mainstream
Business. The Spread Of Subscription-Based DTH Satellite TV Promises To Enhance
Choices For Many Households In Developing Countries.
With The Government Throwing Open The DTH Sector In The Country, A Handful Of
Players Have Come Up With Grandiose Plans To Enter The Market. Given The Stiff Level
Of Competition This Premium Services Will Face From The Existing Multi-Channel Cable
Network, Possible Entrants Need To Clearly Grasp A Few Of The Winning Rules Of The
Game.

Figure 21 DTH Service Supply System

Inbounds Logistic:-
Include Receiving, Warehousing, And Inventory Control Of Input Materials.

Raw Material Sourcing:-


In DTH Service Provider Companies Generally Has No Any Kind Of Raw Material But
Sometimes Given CPE Are Already Supplied By CPE (Dish, STB, Cable) Manufacturer
Company Have To Store It Or Direct Supply To Retailer Or Outlet.

Operation:-
The Value Creating Activates That Perform Input Into Final Product. DTH Service Provider
Collect Private Channel From Their Collaborated Channel. System Which Has Specially
Designed Program To Provide Service As Per Customer Package As Well As Request Send

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A Signal To The Ku-Band Satellite Which Transfer Signals To Subscribers Set-Top-Box
Through Dish Antenna And Serve The Service As Consumer Require Whether It Is Private
Channel Or Service Providers Interactive Service. System Is Similar Like Mobile Service
System So It Is Very Easy Task For Cellular Service Provider.

Outbound Logistics:-
The Activities Required Getting Product Service To The Customers, Installation, Ordering
Fulfillment, Quarry Solution, New Technology And Service Updates (May Free Or Minor
Charges Apply)

POSITION IN A MARKET (SUPPLY)


The Most Important Asset Is Arguably An Ability To Play A Unique Role In The DTH Value
Chain. This Advantage May Reside In Business That Has Little Or No Obvious Connection
With DTH. A Company That Has Pioneered A Business Offering Credit For Consumer
Durables In A Developing Country, For Instance, Might Be Well Placed To Supply Finance
To Purchasers Of CPE.

Sales & Marketing:-


Those Activities Associated With Getting Buyers To Purchase The Product, Including
Channel Selection, Advertising Pricing, Etc. In India Demand Is Over Pacing The Supply.
So, Generally We Find Less Focus On The Marketing Activities From The Companies’
Side.
Two Types Of Customers Are There, One Retail & Second Industrial Or Government. To
Attract Business / Industrial Customer Special Commercial And News Channel Packages
Are There In Some Players. Retail Customer Can Be Attracted By Providing Sales
Promotion Or Advertising.
Also A Simple Recharge Coupon And Options Are Available As Digital Recharge Option
Like Dishtv And “Itzcash” Company’s Recharge Service.

Promotion:-
Currently Companies Are Using Marketing Tool Like Free STB Or Installation, Customize
Channel Package, Special Package To Attract The Special Customer Segment Like
Business Class. And Also Interactive Services Like Educational Program, Same Other
Time Program Recording, Pay-Per-View And Also MDU For Multi User Service.

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Build An Appropriate Content Offer
This Is The Single Most Crucial Choice A DTH Company Will Make. In A Remote Town With
No Access To Television, For Example, Even A DTH Bouquet Of Just Two Channels Might
Seem Attractive. Transponder Costs Are Also A Factor In An Appropriate Content Offer. It
Is The Bouquet Size That Determines How Many Transponders Are Needed, Creating A
Tradeoff Between The Cost Of Transponders And The Richness Of The Offering.

Advertising:-
Ad Revenue Is Also Available To A DTH Service Provider, So The Existence Of A Robust Or
Growing Ad Market Is Important. For That Have Special Movie Time Commercial, 20:20
And Other Sports Live Telecasting Time Commercial And Also Some Special Program Like
Educational, Own TV Serial Production. DTH Service Provider Companies Are Using
Emotional Approaches In Advertising. But Right Now They Are Started To Endorse Brand
Ambassadors Like Shahrukh Khan In Dishtv, Amir Khan & Gul Panag In Tata Sky, Saif_
Kareena_ A.R.Rehman_ Gautam Gambhir_ R.Madhvan And Zaheer Khan In Airtel Digitaltv
And Television Serial Celebrities For Bigtv.

Installation
Generally Players Are Provide Installation Service But In Some Cases (DD Direct+) May
Happen Customer Purchase Their Own CPE From The Market. Service Provider Are
Always Try To Provide Indian Standard CPE. Doordarshan Always Prefer To Serve 90 Mhz
And 120 Mhz Dish Antenna As Well As Good Quality STB.

Service:-
After Provide An Application Equipment Of DTH Service Companies Should Have To
Provide A Better Broadcasting Service Like Interactive Service, PPV (Pay-Per-View),
Movie-On-Demand And Also A Query Of The Service Users.

Supporting Activity:-
The Primary Activates Described Above Are Facilitated By Support Activities.

Infrastructure:-

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S. V. Institute of Management, KADI 2008-10
Infrastructure Includes Strategic Location In Term Of Nearby Suppliers Or Nearby Market,
Adequate Space To Run The Business, Technological Resources, Transportation Facility.
All Of These Will Lead To Improve The Performance. So, All Of The Players Have To
Develop This.

Human Resource Management:-


The Activities Associated With Recruiting, Development, Compensation Of Employees.
One In Each Of The Four Regions North, East, South And West For Setting Up Regional
Training Centers (Rtcs) With Commitment To Human Resource Development. The Rtcs
Are Equipped With State-Of-The-Art (High-Tech) Technologies, Teaching Aids And
Equipment And Specially Made Need Based Training Packages. High Quality Technical
Guidance Has Been Translated Into Local Languages Also. Computer Based Training Is
Given To Personnel Even At Operator Level. There Are Specially Trained Employee For
Installation And Service Guide. And Also They Provide Good Remuneration To Their
Employees.

Offer Superior Services


Cable Companies Are Frequently Criticized For Installation Delays, Billing Errors And
Surly Staff And The Nature Of Cable Plant Makes Signals Prone To Disruption. Staff And
Customer Service Issues Relating To CPE Installation And Maintenance May Yield A Fine
Of Differentiation Above And Beyond Picture Quality.

Technology Development:
As This Is Crucial Factor Which Affecting This Service Most. Company Has To Develop
New Technology As It Helps Not Only Him But Also To Customer. Customer Can Get Good
Quality Of Pictures Through Good Technology.

Implication:-
A Few Things Are Assured In The DTH Industry Even In The Face Of Paradigm Shifts.
First, The Value Of Transponders Is Likely To Fall As Compression Allows More And More
Content To Go Through The Same Satellite, And As More Satellite Are Launched. Obscure
Sports And The Like Will Become More Valuable; Conversely, Much Of The Content That
Is Currently Valuable Will Face Downward Pricing Pressure. Niche Content Providers Will
Emerge. The Industry Is Likely To Be Characterized First By A Period Of Fragmentation

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And Then By An Increasing Concentration Of Global Consortia As Unprofitable
Participants Fold. What Is Clearer Than Ever Is That Satellite TV Is Here To Stay And Will
Play Role In Bringing Television To Mass Around The World?

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S. V. Institute of Management, KADI 2008-10
OT Analysis
Opportunity:

• Huge Untapped Market :

 Industry observers, like dish tv believes that the dth market grow
exponentially to touch 37 million subscribers by 2010.

 Dth is the emerging industry in india and there is huge market to provide
the dth service in india.

 Around 2500-3000 new subscriber are being added everyday to private dth
operators, whereas only 200-300 are added to dd’s free network.

 Suggestions are being mooted for the simultaneous release of movies, both
in theaters as well as on dth.

 There are several remote area in india where as dth services are more
suitable than cable connections.

So, there is opportunity to grab untapped market for dth companies.

• Govt. In Favors Of Industry:

 Govt. Is Considering 74% FDI Capital In The DTH Sector And Taxation
Polices Need To Be Friendly And Encouraging.

 The Growing Subscriber Base Will Definitely Bring Down The Prices Of Stbs
(Set Top Box) In The Long Run And Import Duty Free On Stbs (Set Top Box).

 Government Reduces The License Fee, Which May Be Reduced From 10 Per
Cent Venues To 6 Per Cent Of The Gross Revenue Of The DTH Service Providers.

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For, The Above Points We Can Say It Is Beneficial To New Entrance As Well
As Existing Companies.

• New Products Comes In The Market:

LG LCD With New Blue Race Technology Which Can Record A Programe At A
Time Of Broadcasting In CD /DVD. This Is Very Helpful To DTH Companies To
Provide Service To Customer. The DTH Service Providers Are Improving Their
Technology For Their Product And Also Improvement In Their Service To Provide
To The Customers.

• Company Have Own Cable Subscriber:

 Airtel And Reliance Have Huge Mobile Subscribers Base Where As Sun
Direct And Dish TV Have Got The Cable Subscriber Base Of Sun Network And
ZEE Network To Penetrate More Into The DTH Market.

 Airtel And Dish TV Have Easy To Grab The Cable Market Share.

• Technology Development And Innovative Services:

Now DTH Companies Are More Concentrating On Their Services And Schemes
Them. All The Players Are Always Ready To Innovative Their Services To Attract
The Customers Dish TV And TATA Sky Provide The A-LA-Carte Services Means
Special Channel That You Can Add As Per Your Choice. And Also MS Service
Provides That Called Multi Services. These Both Are Benefit To Customer To See
Their Favorite Programs. In Short Time Internet Will Also Available On The DTH
Service.

• Market Developments:

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• The Major Factors Which Contribute For The Imminent Growth Are –
Economic And Low End Entry Fee, Free Offers, Value-Added Services,
Matrimonial Information, Educational Kits Etc.

• The Players Can Easily Initiate And Develop Their Market If They Have
Required Capital Availability.

Geographical, Export, Import:


 Fed Up With Poor, Unpredictable Cable Television Across Small Towns And
Cities, People Are Switching Over To DTH Entertainment For Their
Television At The Speed Of Light.

 This Can Be Justified Because India Has A Varied Geography And Population
Distribution. So Cable Television Is Not Available Everywhere, Particularly In
Remote Hills, Villages, Farmhouses Etc. These Are The Places Where The
Demand For Satellite Television Is Rising.

Industry Or Lifestyle Trends:


• India Has A Total Of Almost 90 Million Households Which Have Television.
Out Of These, Cable Television And DTH Services Are Accessed In About 45
Million (Half).

• In The Next Few Years, It Is Set To Increase By Another 10. This Will Then
Make The Indian Market The World’s Biggest Cable Television Market.

• The Changing Life Style And Choice May Positively Affect To This Industry.

Implication:

DTH Industry Is At Growth Stage. Industry Has Huge Opportunity And Growth.
Government Is More Concentrating On This Industry. As They Reduced Import
Duty On STB And Also Reduced License Fee. Out Of Six Players, Two Companies
Have Own Cable Subscriber. This Could Be Benefit To Companies. As Companies
Are More Focusing On Advertising Activity, Awareness About DTH Services Is
Increasing In The Market. There Is Huge Untapped Market. Existing Companies

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Provides Innovative Services And Schemes. So, DTH Companies Have Benefit To
Cover That Market.

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Threats

• Substitutes

 Internet Protocol Television (IPTV) Is An Upcoming Threat To DTH, But Still In


The Nascent Stage.

 CAS, If Regulated And Implemented Properly, Could Pose A Threat To DTH


Players In Future.

 IPTV And CAS Is Main Substitute Of DTH Industry. They Are Coming With New
Technology And When It Implemented Right Way Then They Become Threat
For DTH Industry.

• New Technology In The Market:

 New Technology Accepted By TRAI Is Headend In The Sky (HITS). HITS End-
User Is A Cable Operate Who Delivers The Singles To The End Consumer.

 HITS Technology Directly Connect To Cable Operate And DTH Contact To


Consumer. So, This Technology Will Become Harmful To DTH Industry.

• Low Switching Cost:

 There Is Not More Difference Between Package Price Charge By DTH And Its
Substitute.

 Service Provides By DTH And Its Substitute Is Almost Same. So One Can
Transfer From One To Another.

So, Here Switching Cost Is Low For The Customers About The DTH
Service.

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Government Policy/Regulations:
 TRAI And Information & Broadcasting Ministry Is The Governing Body Of DTH
Service Industry. DTH Service Covered Under The Direct To Home
Broadcasting Services (Standards Of Quality Of Service And Redressal Of
Grievances) Regulations, 2007.

 Government Has Imposed Strong Rules Like No Visiting Or Repair And


Maintenance Charges Against DTH Equipment During Warranty Period, The
DTH Operators Cannot Alter The Subscription Package During The First 6
Months, Or Till Validity Expiry, Of A Subscriber's Enrollment, Etc.

IT Developments:
The Biggest Threat To The DTH Industry And Also To The Television Industry Is
From The Growth Of The Internet And Other IT Developments Which May Enable
Viewers To Enjoy Their Daily Sops, News Etc. Direct Through Internet.

Competitor Intentions:
 After The Higher Charges On License And Availability Of The Capital, It
Is Very Easy To The Firm To Enter In The Industry.

 The Deductions And Relieves Provided By The Government May Also


Attract The New Players.

 This May Make The Competition Stiffer For The Existing Players.

Seasonality, Weather Effects:


 The Major Obstacle Faced By The Industry Is Lack Of The Proper Signals In
Bad Climate.

 Therefore, In Hilly Or Rainy Areas The Industry Is Unable To Provide The


Services At Its Best.

Lack Of Possibility Of Growth:


 At Present The Industry Is At Growth Stage, Numbers Of Peoples Are Still
Remaining To Be Covered By The DTH.

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S. V. Institute of Management, KADI 2008-10
 But After Covering The As Many Numbers Of The People As It Can, There Is
No Scope For The Industry To Grow Further In The Same Market

 Even It Would Be Difficult To Attract The Users From One Service Provider
To The Other Because Of The Lack Of The Difference In The Core
Competency.

Implication:

DTH Substitutes Will Become Strong By Adopting New Technology Nearby Future.
And HITS (Head End In The Sky) New Technology Comes In To Market If It
Successful Than The It Is Harmful To DTH Industry. Competitors Are More
Conscious About Their Technological Development And Market Expansion By The
Innovation In Technology As Well As With The Innovative Products. The Climate
Plays Vital Role To Affect The Service. The Improvement In The Technology Affect
To The DTH Industry. Above These Factors Can Become Threat For DTH Industry
In Future.

Summary:

From The OT Analysis, The Opportunity For The Players To Enter As Well As To
Envelop The Market Because The Market Is Untapped And The Policies From The
Government Are Much More Liberal For The DTH Service Providers Provide To The
Customers. So, It Is The Win-Win Situation For Both The Parties Like, DTH Service
Providers And Customers. There Are Also Some Threats For The DTH Service
Providers By The Improvements In The Technology, Climate Condition,
Substitutes Also Affect To The Rivals Of The Industry Because The Cable Operator
Already Covered Market.

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S. V. Institute of Management, KADI 2008-10
Annexure
TRAI Regulation

TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,


PART III, SECTION 4
THE DIRECT TO HOME BROADCASTING SERVICES (STANDARDS
OF QUALITY OF SERVICE AND REDRESSAL OF GRIEVANCES)
(AMENDMENT) REGULATIONS, 2009
No. 3 Of 2009
TELECOM REGULATORY AUTHORITY OF INDIA
NOTIFICATION
New Delhi, The 12th March, 2009

F. No. 16-2/ 2009 - B&CS.---- In Exercise Of The Powers Conferred By Section 36,
Read With Sub-Clauses (I) And (V) Of Clause (B) Of Sub-Section (1) Of Section 11
Of The Telecom Regulatory Authority Of India Act, 1997 (24 Of 1997), Read With
Notification Of The Government Of India, In The Ministry Of Communication And
Information Technology (Department Of Telecommunication) No.39

(A) Issued, In Exercise Of The Powers Conferred Upon The Central Government
Under Clause (D) Of Sub-Section (1) Of Section 11 And Proviso To Clause (K) Of
Sub-Section (1) Of Section 2 Of The Said Act, And
(B) Published Under Notification No. S.O.44 (E) And 45 (E) Dated The 9th January,
2004 In The Gazette Of India, Extraordinary, Part III, Section 4,
The Telecom Regulatory Authority Of India Hereby Makes The Following
Regulations To Amend The Direct To Home Broadcasting Services (Standards Of
Quality Of Service And Redressal Of Grievances) Regulations, 2007 (8 Of 2007),
Namely:-

1. (1) These Regulations May Be Called The Direct To Home Broadcasting


Services (Standards Of Quality Of Service And Redressal Of Grievances)
(Amendment) Regulations, 2009.
(2) They Shall Come Into Force With Effect From The Date Of Their Publication In
The Official Gazette.

2. In The Direct To Home Broadcasting Services (Standards Of Quality Of Service


And Redressal Of Grievances) Regulations, 2007
(A) After Regulation 4, The Following Regulation Shall Be Inserted, Namely:-
“4A. Obligation Of Direct To Home Operator To Provide Repair And
Maintenance Of Direct To Home Customer Premises Equipment.
(1) Every Direct To Home Operator Shall Provide A Warranty In Respect Of Direct
To Home Customer Premises Equipment Which Has Been Acquired By A Direct To
Home Subscriber On Outright Purchase Basis From Such Direct To Home
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S. V. Institute of Management, KADI 2008-10
Operator.
(2) The Direct To Home Subscribers Who Have Acquired The Direct To Home
Customer Premises Equipment On Outright Purchase Basis Shall Not Be Required
To Pay Any Sum As Charges
(A) For Repair And Maintenance Of The Direct To Home Customer Premises
Equipment; Or
(B) For Visiting The Premises Of Such Direct To Home Subscriber For The Purpose
Of Carrying Out Repair And Maintenance Of Direct To Home Customer Premises
Equipment
During The Period Of Validity Of Such Warranty.”
(B) After Regulation 9, The Following Regulations Shall Be Inserted, Namely:-
“9A. No Change In Composition Of A Subscription Package During First
Six Months Of Enrolment Or During The Period Of Validity Of
Subscription Paid In Advance.(1) No Direct To Home Operator Shall Change
The Composition Of A Subscription Package Which Has Been Subscribed To By A
Direct To Home Subscriber, So As To Discontinue Exhibition Of Any Particular
Channel In That Subscription Package,
(A) During The Period Of Six Months From The Date Of Enrolment Of The
Subscriber To Such Subscription Package In The Case Of A Subscriber Who Pays
His Subscription Amounts Under Such Subscription Package By Recharging Or By
Making Payments Periodically To The Direct To Home
Operator; Or
(B) During The Entire Period Of Validity Of The Subscription Package If The
Subscription Amount In Respect Of Such Subscription Package Has Been Paid In
Advance By The Direct To Home Subscriber Or In Instalments As Per Offer Of The
Direct To Home Operator,

If Such Channel Continues To Be Available On Its Direct To Home Service On Its


Platform:

(2) If Any Particular Channel Included In A Subscription Package Which Has Been
Subscribed To By A Direct To Home Subscriber Subsequently Becomes
Unavailable On The Direct To Home Service Of The Direct To Home Operator On
Its Platform, The Direct To Home Operator Shall Reduce The Subscription
Charges For Such Subscription Package On A Proportionate Basis From The Date
Of Discontinuance Of The Channel From The Direct To Home Service Of The
Direct To Home Operator Till The Expiry Of A Period Of Six Months From The Date
Of Enrolment Of That Subscriber, Or Till The Expiry Of The Contracted Period Of
Subscription For Which The Amount Of Subscription Has Been Paid In Advance Or
In Installments As Per Offer Of The Direct To Home Operator, Whichever Is Later.

Provided That, Instead Of Proportionately Reducing The Subscription Charges For


Such Subscription Package On Account Of Non-Availability Of Such Channel, The
Direct To Home Operator May, At Its Discretion, Introduce In Such Subscription
Package Another Channel Of The Same Genre And Language As The Channel
Which Has So Become Unavailable On The Direct To Home Service Of The Direct
To Home Operator.

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Provided Further That The Direct To Home Operator Shall Give An Option To Each
One Of Its Direct To Home Subscribers, Who Have Subscribed To Such
Subscription Package, An Option To Choose From The Modified Subscription
Package With Charges Reduced On Proportionate Basis And The Modified
Subscription Package With The Removed Channel Replaced By Another Channel
Of The Same Genre And Language, And The Direct To Home Subscriber Shall Be
Free To Exercise The Option For The Period From The Date Of Discontinuance Of
The Channel From The Direct To Home Service Of The Direct To Home Operator
Till The Expiry Of A Period Of Six Months From The Date Of Enrolment Of That
Subscriber, Or Till The Expiry Of The Contracted Period Of Subscription For Which
The Amount Of Subscription Has Been Paid In Advance Or In Installments As Per
Offer Of The Direct To Home Operator, Whichever Is Later.

Explanation: For The Removal Of Doubts, It Is Hereby Declared That The Amount
Of Reduction On Proportionate Basis In The Subscription Charges, On Account Of
Removal Of A Channel From A Subscription Package, Shall Be Calculated By
Dividing The Amount Of Subscription Charges For The Original Subscription
Package By The Number Of Channels Included In The Original Package.

9B. Notice Before Change In Composition Of A Subscription Package.


Every Direct To Home Operator Shall Give Prior Notice Of Fifteen Days To Its
Direct To Home Subscribers Subscribing To Any Subscription Package Before
Changing The Composition Of That Subscription Package.”;

(C) In Regulation 10, The Following Provisos Shall Be Inserted, Namely:-

“Provided That A Direct To Home Operator May Not Discontinue The Direct To
Home Service To A Direct To Home Subscriber At The Request Of Such Direct To
Home Subscriber, If Such Request For Suspension Of Subscription Is For A Period
Which Comprises Part Of A Calendar Month.

Provided Further That Every Direct To Home Operator Shall Suspend The Direct
To Home Service To A Direct To Home Subscriber At The Request Of Such Direct
To Home Subscriber, If Such Request For Suspension Of Subscription Is For A
Period Of A Calendar Month Or Multiple Of Calendar Months And The Requested
Period Of Suspension Does Not Exceed Three Calendar Months.”.

(R. N. Choubey)
Principal Advisor
(B&CS)

Note.1-----The Principal Regulations Were Published Vide Notification F. No. 4-


55/2007 - B&CS Dated 31st August, 2007.
Note.2-----The Explanatory Memorandum Explains The Objects And Reasons Of
The Direct To Home Broadcasting Services (Standards Of Quality Of Service And
Redressal Of Grievances) (Amendment) Regulations, 2009.

EXPLANATORY MEMORANDUM
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Background

1. The Direct To Home Broadcasting Services (Standards Of Quality Of Service


And Redressal Of Grievances) Regulations, 2007, Were Issued On 31st August,
2007. These Regulations Were Issued To Lay Down The Standards Of Quality Of
Direct To Home Services And To Protect The Interests Of Direct To Home
Subscribers. At The Time Of Issue Of These Regulations, Only Two Direct To
Home Operators Apart From Doordarshan Were Providing Direct To Home
Services In The Country. Since Then, Three New Direct To Home Operators Have
Started Commercial Operations And The Number Of Direct To Home Subscribers
Has Also Risen To About 11 Million. With The Evolution Of The Direct To Home
Segment And The Increase In The Number Of Direct To Home Subscribers, New
Issues Relating To Quality Of Direct To Home Service Have Arisen. In Order To
Address These Issues The Authority Has
Decided To Amend The Direct To Home Broadcasting Services (Standards Of
Quality Of Service And Redressal Of Grievances) Regulations, 2007.

Consultation Process

3. Sub-Clause (V) Of Clause (B) Of Sub-Section (1) Of Section 11 Of The


Telecom Regulatoryauthority Of India Act, 1997 (Hereinafter Referred To As
The TRAI Act, 1997),
Provides For The Authority To “Lay Down The Standards Of Quality Of Service To
Be Provided By The Service Providers And Ensure The Quality Of Service And
Conduct The Periodical Survey Of Such Service Provided By The Service Providers
So As To Protect Interest Of The Consumers Of Telecommunication Services”.
Sub-Section (4) Of Section 11 Of The TRAI Act, 1997 Requires The Authority To
Ensure Transparency While Exercising Its Powers And Discharging Its Functions.
Accordingly, The Authority Decided To Go In For A Consultation Process Before
Amending The Direct To Home Broadcasting Services (Standards Of Quality Of
Service And Redressal Of Grievances) Regulations, 2007.

4. The Process Of Consultation Was Initiated By Circulating A Consultation Paper


On The Quality Of Service Issues For Cable TV Services In Non-CAS Areas And
For DTH Services On 1st December, 2008 Inviting Inputs From The
Stakeholders. Responses Were Received From 26 Stakeholders/
Representatives. An Open House Discussion Was Also Held On The 6th
February, 2009 In Kolkata With Representatives Of Stakeholders To Further
Deliberate On Various Issues Raised In The Consultation Paper.
Issues For Consultation

The Issues Which Were Raised For Consultation In The Consultation Paper Are As
Under:-

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S. V. Institute of Management, KADI 2008-10
i) Whether The DTH Operators Should Be Specifically Prohibited From
Dropping Of Channels From A Subscription Package For A Subscriber For
Six Months From The Date Of Enrolment Of That Subscriber, If The
Channel Continues To Be Available On Their Platform.

ii) Within This Period Of Six Months, In Case The Channel Ceases To Be
Available On A Particular DTH Platform, Then Whether It Would Be
Appropriate To Have A Mechanism Of Reducing The Subscription
Charges By An Amount Equal To The Wholesale A-La-Carte Rate Of That
Channel. Alternatively, Can You Suggest Any Other Methodology For
Such Compensation To The Subscriber? Should Such Compensation Be
Paid/Adjusted Even When One Channel In A Package Is Dropped, And It
Is Replaced/Substituted By Another Channel So That The Total Number
Of Channels In That Package Is Not Affected?

iii) Whether The Subscribers Should Also Be Required To Subscribe To Any


Channel/ Package For A Certain Minimum Subscription Period As In CAS
Areas. If Yes, What Should Be Such Minimum Subscription Period?

iv) Whether There Is Any Justification For Visiting Charges For “No Signal”
Complaint By The Subscribers? If Yes, Should There Be A Ceiling On Such
Visiting Charges For Complaints Of “No Signal”?

v) Similarly, Should Any Ceiling Be Placed In Respect Of Visiting Charges For


Repair And Maintenance Of CPE For DTH Services? Alternatively, Should
DTH Operators Be Required To Offer Annual Maintenance Contracts
(Amcs) To Their Subscribers?

vi) Can You Suggest Some Form Of Amcs For DTH Service Covering All Aspects
Such As Repair & Maintenance Charges For CPE, Visiting Charges,
Attending “No Signal” Complaints, Etc.?

vii) Whether The Service Providers Should Be Required To Make Available Toll-
Free Numbers For Recharge Calls For Prepaid Accounts?

viii) Whether The Request For Suspension Of Service For Full Calendar
Months Only Should Be Entertained?

ix) Whether Tariff Plan Or Subscription Package Changes Requested By The


DTH Subscriber Should Be Accepted And Implemented Immediately Or
From The Start Of Next Billing Cycle For DTH Subscriber.

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x) Whether Advance Notice Of Minimum 30 Days Should Be Given By DTH
Operators To A DTH Subscriber Before Terminating His Existing Tariff
Plan Provided That No Tariff Plan Can Be Terminated Within The
Contracted Period, If Any, For That Package Or Within Six Months Of
Enrolment Of That Subscriber To That Package.

Analysis Of The Responses Received During The Consultation Process

Dropping Of Channels From A Package


The DTH Operators Have Suggested That The Freedom Of Adding/ Dropping The
Channels Should Be With The DTH Operator. On The Other Hand The Consumers
Have Demanded That Protection Should Be Available Not Only For Six Months,
But For The Entire Contract Period Of Subscription Package, If Such Period
Exceeds Six Months, So Long As Advance Payment Has Been Made By The
Subscriber. The DTH Operators Have Expressed A View That There Need Not Be
Any Reduction In Subscription Charges In Case Of Any Channel Being Withdrawn
From A Subscription Package. However, The Consumers Have Taken A Stand That
In Case Of Any Channel Being Withdrawn From A Subscription Package, The
Subscribers Should Be Compensated By Way Of Reduction In Subscription Fee.
Further,
Some Consumers Have Demanded That In Case A Channel Is Substituted By
Another Channel, The Choice Of Subscribing To The New Channel Or To Get A
Reduction In Subscription Fee Should Be With The Subscriber. Minimum
Subscription Period.

The Broadcasters And The DTH Operators Have Favoured Imposition Of A


Minimum Subscription Period For Any Channel/ Package Similar To The 4 Month
Period Prescribed In Quality Of Service Norms For CAS. However, The Consumers
Are Divided On The Issue And While Some Of The Consumers Agree With The
Concept Of Minimum Subscription Period, Others Have Opposed It. Maintenance
Of Customer Premises Equipment.

The Issue Of Visiting Charges Payable By The DTH Subscribers For Visits Made By
Personnel Of DTH Operators For Repair And Maintenance Of CPE Also Divided The
Consumers. While Some Consumers Opposed Visiting Charges Or Wanted A
Ceiling On The Visiting Charges, Others Did Not Agree With Them. It Was Pointed
Out By An Individual That “…Warranty Does NOT Include Transporting Charges
For Individuals And Hardware. Therefore For Customers Of All Categories,
Itemized Bills Must Be Issued Detailing The Breakdown Of Payments Sought. …”.
The DTH Operators Did Not Favour Any Kind Of Regulation Of Visiting Charges.

Almost All The Stakeholders Were Of The View That The DTH Operators Should
Offer Annual Maintenance Contracts For Maintenance Of CPE To Their
Subscribers. Different Suggestions Were Also Received Regarding The Form Of
Annual Maintenance Contracts. Onedth Operator Has Suggested That All DTH
Operators Must Have Their Own Annual Maintenance Contracts. Toll Free
Number For Recharge Calls.

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The Proposal Has Been Opposed By The DTH Operators And The Consumers Have
Unanimously Favoured The Proposal. Only One DTH Operator Has Suggested That
All DTH Operators Should Make Provision For Toll-Free Numbers For Calls Made
For Recharging Their Prepaid Accounts. Suspension Of Service Or Change Of Plan
On Request Of Subscribers.

All The DTH Operators Have Suggested That The Request For Suspension Of
Service For Full Calendar Months Only Should Be Entertained. It Has Been Pointed
Out By The DTH Operators That The Broadcasters Are Paid On The Basis Of
Calendar Months And Accordingly, Any Suspension Of Service For Part Of The
Month Results In Financial Burden On The DTH Operator. It Was Also Suggested
By An Operator That “…Either It Should Be Done From The Calendar Month Or
The Operator Should Be Allowed To Charge A Service Fees For Extending This
Service…”. The Consumers Were Divided On The Issue.

As Regards Timeframe For Carrying Out Changes In Tariff Plan Or Subscription


Package On The Request Of A DTH Subscriber, The DTH Operators Wanted To Be
Permitted To Levy Administrative/ Additional Charges For Such Changes. Further,
It Was Pointed Out By Some DTH Operators That Any Upgradation Is Possible
With Immediate Effect, But Downgradation Of A Package Can Be Done From Next
Billing Cycle Only As The Broadcasters Have To Be Paid For Supply Of Content.
The Consumers Were Divided On This Issue. Some Of The Consumers Suggested
That The DTH Subscribers Should Be Billed On Pro Rata Basis But There Should
Not Be Any Administrative Charge. Notice Period For Termination Of A Tariff Plan.

Most Of The Consumers Wanted A Notice Of Minimum 30 Days To Be Given By


DTH Operators To A DTH Subscriber Before Terminating His Existing Tariff Plan.
Some Of The Consumers Wanted A 60 Days Notice, While Others Suggested That
The DTH Subscriber May Be Warned About Such A Change 15 Days In Advance Of
Exhaustion Of Credit Limit. The DTH Operators Opposed Any Such Notice.
Rationale For Making Amendment To The Direct To Home Broadcasting Services
(Standards Of Quality Of Service And Redressal Of Grievances) Regulations, 2007

The Authority Noted That A Large Number Of Complaints Have Been Received
From The Direct To Home Subscribers Regarding Dropping Of Channels From
Subscription Packages Offered By DTH Operators. In Case Of Subscription To DTH
Services, A Subscriber Subscribes To The Service On The Basis Of Specific
Channels Included In The Subscription Package. If Any Channel Is Taken Out Of A
Subscription Package And It Is Replaced By Another Channel Then The DTH
Subscriber May Be Getting The Same Number Of Channels As Earlier, But Will Be
Deprived Of Viewing The Particular Channel Which Has Been Removed. In Case
The Channel Which Is Removed Is Offered To The Subscriber As An Add-On
Package Then The Subscriber Ends Up Paying More For Viewing That Channel
Which Was Earlier Included In His Subscription Package. This Subverts The Tariff
Protection Provided To DTH Subscribers By Regulation 9 Of The Direct To Home
Broadcasting Services (Standards Of Quality Of Service And Redressal Of
Grievances) Regulations, 2007.

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S. V. Institute of Management, KADI 2008-10
Further, The Authority Has Also Noted That The DTH Operators Are Offering
Annual Or Fixed Period Subscription Contracts Also To DTH Subscribers. To
Protect The Interests Of The DTH Subscribers Who Have Entered Into Annual Or
Fixed Period Subscription Contracts With The DTH Operators, It Is Necessary To
Ensure That The Channels Offered To The Subscriber At The Time Of Entering Into
The Subscription Contract Are Not Removed From The Package During The
Validity Of Subscription Contract.

However, On The Other Hand It Must Be Recognized That The DTH Operators
Have To Tailor Their Packages According To The Changing Demands Of Their
Subscribers. Accordingly It Was Not Considered Advisable To Completely Prohibit
The DTH Operators From Making Changes To Their Subscription Packages. To
Balance The Interest Of Service Providers And Subscribers, The DTH Operators
Have Been Prohibited From Changing The Composition Of Any Subscription
Package For A Minimum Period Of Six Months From The Date Of Enrolment Of The
Subscriber For Such Subscription Package, If The Channel Continuous To Be
Available On Their DTH Service Platform From The Broadcaster In Any Other
Subscription Package. In Cases Where The Existing Subscription Contract
Between DTH Subscriber And The DTH Operator Is For A Period Longer Than Six
Months, Such Prohibition Would Apply For The Complete Term Of The
Subscription Contract.

In Case Any Channel Has To Be Removed From A Subscription Package By The


DTH Service Provider During The Contracted Period Of The Subscription Or Six
Months Whichever Is Later Due To The Channel No Longer Being Available On
The DTH Service Platform In Any Other Package, Then The DTH Operator Would
Be Required To Compensate The DTH Subscriber By Way Of Proportionate
Reduction In The Subscription Charges For A Minimum Period Of Six Months From
The Date Of Enrolment Of The Subscriber For Such Subscription Package Or For
The Remaining Period Of Subscription Contract Whichever Is More. However, The
DTH Operator May Replace Such A Channel By Another Channel Of The Same
Genre And Language In The Subscription Package Without Reducing The
Subscription Charges. This Will Enable The DTH Operators To Include More
Popular Content In Their Offerings And Package The Content To Suit The Needs
Of Their Subscribers. However, The Option To Choose The Modified Subscription
Package With Reduced Charges Or The Modified Subscription Package With The
Replaced Channel Shall Remain With Direct To Home Subscriber. Further, It Has
Been Mandated That The DTH Operators Should Give Prior Notice Of Fifteen Days
Before Changing The Composition Of Any Package To All The Subscribers Who
Have Subscribed To That Package.

Presently There Is No Restriction On The Direct To Home Operators About


Offering Any Channels/ Packages On Quarterly/ Annual/ Any Other Basis. The
Direct To Home Operators Have Been Designing Their Packages As Per The
Demand Of Customers And Terms And Conditions Of Their Interconnection
Agreements With The Broadcasters. Accordingly, The Authority Is Of The View
That Currently There Is No Need To Bring In Any Regulation Requiring The Direct
To Home Subscribers To Subscribe To Any Channel/ Package For A Certain
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S. V. Institute of Management, KADI 2008-10
Minimum Subscription Period As In CAS Areas. The Direct To Home Operators
Have Also Been Mandated To Offer Warranty For CPE Acquired By Their
Subscribers On Outright Purchase Basis From Them. Although Offering Of AMC By
DTH Operators Is Not Being Mandated, It Is Expected That Some Competition
Among The Direct To Home Operators Would Ensure That The Repair And
Maintenance Services Are Available To The DTH Subscribers. Even Presently,
Some Of The DTH Operators Are Already Offering Amcs For DTH CPE.

Presently, Some Of The Direct To Home Operators Are Not Charging Any Visiting
Charges For Repair And Maintenance Of CPE While Some Are Charging. The
Authority Is Of The View That Market Forces Will Take Care Of This Issue. The
DTH Operators Have To Compete With Cable Networks And No Such Charges Are
Levied By Cable Operators. Further, There Are Five Pay DTH Operators In The
Country And Therefore There Is Some Level Of Competition Among DTH
Operators Also. Hence It Was Not Found Necessary To Prohibit, By Way Of
Regulation, The Direct To Home Operators From Charging Any Visiting Charges
After The Warranty Period Is Over, As It Was Felt That Competition And Market
Forces Will Work On This Issue To Ensure That The Interests Of Direct To Home
Subscribers Are Protected.

The Authority Has Decided Against Mandating The Direct To Home Operators To
Make Available Toll-Free Numbers For Recharge Calls For Prepaid Accounts. The
Main Reason For This Decision Is That Ultimately The Cost Of Operational
Expenses Of Providing Direct To Home Service Gets Passed On To The Direct To
Home Subscribers. Any Additional Expenditure By Direct To Home Operators In
Making Available Toll-Free Numbers For Recharge Calls For Prepaid Accounts Will
Result In Increase In The Subscription Charges In The Long Run Negating The
Benefits From The Toll Free Number. However, It Is Expected That The Telephone
Number Provided For Recharge Calls For Prepaid Accounts Should Not Have
Premium Charges.

The Direct To Home Operators Have To Pay The Broadcasters On The Basis Of
Number Of Viewers For The Entire Calendar Month. Any Suspension Of Service
For Part Of The Month Puts A Direct To Home Operator At A Loss Because Even
Though The Direct To Home Subscriber Is Not Required To Make Payment For The
Period Of Suspension, The Broadcasters Have To Be Paid For The Entire Calendar
Month. Accordingly, The Direct To Home Operators Have Been Permitted Not To
Entertain, At Their Discretion, Any Request For Suspension Of Service For Part Of
Calendar Months. However, It Has Also Been Mandated That The DTH Operators
Should Entertain Requests For Suspension Of Service For A Period Which Does
Not Comprise Part Of A Month And Which Does Not Exceed Three Calendar
Months.

The Issue Of Change Of Tariff Plan Or Subscription Package On The Request Of A


Direct To Home Subscriber Is Also Linked With The Payments That A Direct To
Home Operator Is Required To Make To The Broadcasters. Accordingly, Any
Downgradation Of Subscription Package Entails Discontinuance Of Supply Of
Certain Channels To The Direct To Home Subscriber. However, The Broadcasters
1
S. V. Institute of Management, KADI 2008-10
Whose Channels Have Been Discontinued Have To Be Paid For The Entire Month/
Billing Cycle. Therefore, Such A Downgradation Is Normally Done From The Next
Billing Cycle. The Authority Has Noted That The Upgradations Are Done By The
Direct To Home Operators Immediately. Therefore, No Regulation Is Being
Brought In Regarding This Aspect.

The Issue Of Advance Notice To A Direct To Home Subscriber Before Terminating


His Existing Tariff Plan By The Direct To Home Operator Is To Be Seen In The
Context Of Tariff Protection Being Made Available To The Direct To Home
Subscriber. The Present Amendment Regulations Have Extended The Protection
Available To The Direct To Home Subscriber Regarding Composition Of A
Subscription Package For Six Months From The Date Of Enrolment Or Contracted
Period, Whichever Is Longer. However, An Advance Notice Will Enable The Direct
To Home Subscribers To Make An Informed Choice Out Of New Subscription
Packages Available Once The Existing Package Is Discontinued After The Period
Of Tariff Protection (Six Months From The Date Of Enrolment Or Contracted
Period, As
The Case May Be) Has Expired. Accordingly, A Prior Notice Of Fifteen Days Has
Been Mandated For Change In Composition Of A Subscription Package.

1
S. V. Institute of Management, KADI 2008-10
Bibliography
Reference Books Magazines
Jr., A. A. (Special Indian Edition).
Crafting And Executing Strategy. Tata TV Veopar Journal
Mcgraw Hill Pub. Co. Ltd. Fortune India
Business World
Jr., O. C. (5th Edition). Marketing Capital Market
Stretegy. Tata Mcgraw Hill Pub. Co. Marketing Mastermind
Ltd. 4p’s
Pitch
Brand Reporter
Philp, K. (13th Edition). Marketing
Management. PEARSON.
Web Sites
News Papers
Www.Mib.Nic.In
Economic Times Www.Dishtv.In
Business Standard Www.Tatasky.Com
Financial Express Www.Sundirect.In
Timres Of India Www.Airtel.In/Digitaltv
Www.Bigtv.Co.In
Www.Videocond2h.Com
Search Engine Www.Indiabroadband.Net
Www.Indiatelevision.Com
Google Www.Indiainbusiness.Nic.In
Yahoo Www.Strategyr.Com
MSN

1
S. V. Institute of Management, KADI 2008-10
Source Addresses

1
S. V. Institute of Management, KADI 2008-10
1
Dream Satellite TV Shanghai Service Center (www.dreamsatellite.com) product FAQ’s.
2
Wikipedia.com http://en.wikipedia.org/wiki/Direct_To_Home
3
Wikipedia.com http://en.wikipedia.org/wiki/Direct_To_Home
4
http://www.satelliteretailers.com/dish_installation.html (by Harry W. Thibedeau, edited by Alex
Breckon)
5
http://www.indiantelevision.com/dth/dth12.htm (Posted on 7 April, 6:00 PM)
6
http://fjallfoss.fcc.gov/edocs_public/attachmatch/FCC-07-189A1.txt through Wikipedia.org
7
Wikipedia.com http://en.wikipedia.org/wiki/iptv
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Sag.org http://www.sag.org/content/new-media-glossary
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http://www.indiainbusiness.nic.in/industry-infrastructure/service-sectors/media-
entertainment.htm
10
www.mumbai.mtnl.net.in/iptv/index.html
11
http://mumbai.mtnl.net.in/iptv/index.html
12
http://www.calcutta.bsnl.co.in/iptv/index.php
13
http://www.rcom.co.in/iptv/
14
www.mumbaispace.com
15
http://www.indiabroadband.net/direct-home-satellite-cable-iptv/15016-airtel-iptv.html
16
http://www.indiainbusiness.nic.in/industry-infrastructure/service-sectors/media-
entertainment.htm
17
http://www.indiainbusiness.nic.in/industry-infrastructure/service-sectors/media-
entertainment.htm
18
http://en.wikipedia.org/wiki/Satellite_television edited...
19
TV VEOPAR JOURNAL/ April 2009/ Page No:40
20
http://www.apexinfotech.co.in/technology.html
21
http://voicendata.ciol.com/content/service_provider/106050106.asp
22
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23
http://www.researchandmarkets.com/reportinfo.asp?report_id=600090&t=t&cat_id=
24
http://www.indiantelevision.com/special/sperep1.htm, Posted on 5 June
25
http://www.indiantelevision.com/dth/dth12.htm
26
http://www.tvnext.in/news/155/ARTICLE/1760/2008-12-01.html December 1st, 2008
27
Source: ACCEQUITY Financial and Statistical database software.
28
www.tradingeconomics.com
29
Macroeconomic and Monetary Developments Second Quarter Review 2009-10
30
www.indexmundi.com
31
www.cia.gov/library/publications/the-world-factbook/geos/in.html
32
Antenna: An electrical device that sends or receives radio or television signals
33
DTH: Direct from government: The Indian Express Mrs. Ila Patnaik Posted: Dec 28, 2005
34
http://pib.nic.in/focus/foyr2001/fomar2001/dth_glines.pdf
35
Satellite: Man-made equipment that orbits around the earth or the moon
36
Ku Band: key-you Band Satellite
37
http://www.tech-faq.com/ku-band.shtml which is taken from Ku-Band Satellite TV: Theory,
Installation and Repair
38
http://www.indiantelevision.com/satreckon/satelliteindia/satellitesoverindia.htm
39
http://www.zeetelevision.com/html/AboutZee.asp?Content=14
40
Sun Direct official website www.sundirect.com
41
http://www.lyngsat-maps.com/maps/in4b_ecc.html
42
http://www.dishtv.in/mdu.aspx
43
Project report on “Sales and Distribution Effectiveness: A Comparative Study of Tata Sky & Airtel
DTH.”
44
http://www.dishtv.in/mdu.aspx
45
http://sivasundaram.com/wp-content/uploads/2007/08/dth-industry-in-india.pdf
46
DTH cos call for licence fee cut, 2 Jan 2009, Meenakshi Verma Ambwani, Economics Times
47
business Standard News Paper Monday 9th November 2009 page no.2
48
Business Standards News Paper, 9-11-2009
49
http://www.valuebasedmanagement.com
50
Business Standard News Paper Monday 9th November 2009
51
http://www.indiainbusiness.nic.in/industry-infrastructure/service-sectors/media-entertainment.htm
52
http://www.naukrihub.com/india/media/overview/categories/television/