Louise Duffy ©RapidTVNews | 16-09-2011

Direct to home (DTH) operators in Tamil Nadu will feel the force of the 30% entertainment tax the state government has imposed on DTH connections.

The Times of India reports that industry sources said the move would hurt Sun Direct the most as it is the largest DTH operator in the state. The tax has been imposed to deter people from migrating from the government’s unpopular cable TV network Arasu to DTH, they said.

Sun Direct controls 80% to 85 % of the DTH subscriber base in Tamil Nadu. The balance is shared by other operators like Airtel, Videocon, Tata Sky and Dish TV.

"The state government is targeting us by imposing 30% tax on DTH operators. It will also hit the DTH consumers badly because we have to collect at least a part of the tax from our subscribers. We have no other alternative," a senior executive with a DTH operator told the Times of India. He also said that they planned to go to court against the heavy tax imposition.

There are reports that DTH subscriber base had been fast picking up in the state in the past two weeks as people who were upset with Arasu Cable TV were shifting to DTH.

A marketing head in a DTH firm said, "Earlier, the market share of DTH was 20% to 25% of the total television viewers. In the past two weeks, it has touched 30%. DTH sales are highest in places where Arasu has started operations."