Indian pay-TV landscape remains dynamic

November 1, 2012 08.24 Europe/London By Broadband TV News Correspondent

India has celebrated its first “D-day” or digitalisation day in four metro regions: Delhi, Mumbai, Chennai and Kolkata.

Meanwhile, the pay-TV landscape in the country continues to remain dynamic. In the ‘dash to digitalisation,’ phase one will set the stage for the rest of the India, as cable and DTH platforms do battle to enable a new-era of television for Indian subscribers.

Mentioned in NSR’s Global Direct-to-Home (DTH) Markets, 5th Edition, the digitalisation of cable MSOs has spurred increased investment in terrestrial cable networks and will create a stronger long-term competitor.

Whereas MSOs have an almost non-existent marginal cost for adding additional channels, DTH operators continue to face cost and availability pressures for more capacity. Looking forward to 2021, NSR’s DTH5 report finds South Asia adding only 48 TPEs of Ku-band capacity for DTH platforms. With capacity constraints, channel counts are not expected to significantly increase through 2021.

DTH platforms are only expected to add another 200 HD channels in total across the entire South Asian region – a number terrestrial services will well exceed. Led by growth in advanced services such as HD or DVRs, the path to growth for DTH platforms in the region will not come from significant boosts to channel offerings, but rather from leveraging their size, experience, and the near-term growing pains of cable MSOs. In all, DTH platforms will need to look beyond channel counts to win-over terrestrial subscribers.

New set-top box installations approached 50,000 a day in the week leading up to the October 31st deadline in India, whereas DTH STB installations reached 8,000 a day – up from 2,000 a day only a few weeks ago.

Covering approximately 9 million TV households, data continues to suggest that there is not a significant defection of analogue cable subscribers to digital DTH platforms in India, which DTH platforms had hoped would occur. With digitalisation nearing 90% according to India’s Ministry of Information and Broadcasting, phase one gives all indications that DTH platforms will need to ramp-up their efforts to win-over newly digitalized cable subscribers.

To combat MSOs, DTH platforms have size and experience on their side. They already have large back-office and technical support networks, and continue to expand their dealer networks into more customer-facing locations. With DTH platforms covering larger service areas than the regional-centric MSOs, upstream improvements in back-office systems translate across their entire customer base quickly, with better pay-back periods.

Already well into operating advanced digital networks, DTH platforms also have more experience with customer-facing support than MSOs for VoD, PPV, and other advanced services. Experience, size, and previous investments will be the key factors to help DTH platforms grow subscribers and revenues through the near-term.

Near-term growing pains for cable MSO platforms in India will provide the growth opportunity for DTH platforms. DTH platforms in India will need to leverage current investments in back-office support and their customer-facing experience to differentiate themselves from cable operators. Once the dust settles, however, advancing terrestrial MSOs will challenge long-term growth prospects for Indian DTH platforms.