' Amitabh Kumar Director (Corporate), Essel Group of Companies

DTH has completed five years in India in October 2008. The five years, since Dish TV launched its services on Insat 3A satellite in October 2003, have seen the greatest changes that any pay TV market has seen at any stage in the world. The changes have transformed the entire cable TV industry in India, which saw challenges to its hegemony for the first time since its inception in the early 1990s. This has seen the industry to consolidate, to move to digital platforms, and be much more transparent and customer friendly, a change which even conditional access system (CAS) could not encourage.

Along with DTH came competition in the form of new DTH providers, and customers for the first time had a choice of selecting a TV provider, an option which was totally foreclosed in the monopolistic cable TV industry. The competition has also generated a slew of regulations and interconnect agreements making the Indian DTH industry one of the best regulated pay TV industries in the world. As compared to its regional peers, the Indian DTH industry outshines most markets and has content which is one of the most diverse serving rural and urban populations as well as all regions and languages.

Regulations

Despite DTH services (in fact the entire pay TV industry) operating in a very actively regulated environment based on consultative processes, the fact remains that the growth could have been much higher if severe regulatory restrictions were not placed on the sector.

In the absence of an independent broadcast regulator, the functions of broadcast regulations and licensing have been split among many organizations. For example, take content. Only those channels can be carried on a DTH platform, which have obtained a downlink license in India. Unfortunately this bars a number of first rate channels such as Euronews which had to go off the DTH platform owing to a lack of downlink license. The same applies to a number of channels from neighboring countries which have a community of interest in India but remain off the platform. But the very same regulations are not applicable for IPTV which is a comparative medium of delivery of TV channels.

DTH operators are also not allowed to provide two way services, which are treated as VSAT services. This precludes a range of interactivity services to be available on the platforms. Extension to mobile phones is an important facet of DTH platform such as Echostar. However, the regulations in India split all services under a separate license with DTH operators not even being eligible for providing terrestrial mobile services by virtue of sectoral caps. The sector also remains one of the most taxed ones with clarity on entertainment and service taxes being swept under the carpet. Making an uplink teleport operational for DTH is a prolonged process requiring upfront signing up for satellite capacity even though the process of making the teleport operational may take the best part of next one year.

The absence of a broadcast regulator has also led to a number of recommendations such as terrestrial broadcasting and mobile TV falling on the way side even though some of these could have served as extensions of the main platform. Carriage of radio channels on the platform is not allowed, for which there is a separate satellite radio policy in vogue. This has however not stopped the DD Direct Plus to continue carrying the All India Radio channels. This throws on the way side services such as MP3 broadcasts.

Resources

Entry of new operators in DTH put a severe demand on satellite capacity which is the basic requirement for operating a platform. This led to shortages in transponder availability with a sudden spurt in number of operators such as Videocon, Sun TV, Bharti, and Reliance in addition to Tata Sky, Dish TV, and DD Direct Plus. Today most operators are limited in their expansion capabilities owing to availability of transponders. Back-up satellites or satellite constellations of 8-10 satellites as used by operators such as Sky or Echostar cannot even be dreamed of in the current environment. The problems are being accentuated by the demands of HDTV which require much larger satellite resources to be allocated. The Wireless Planning Commission (WPC) Wing decision to get the 3.4-3.6 GHz spectrum, (presently used for extended C-band broadcasting to cable headends and VSAT networks) has caused the shortages to be accentuated with many broadcasters and VSAT operators having to shift uplinks to Ku Band. The non-availability of lower extended C-band is also restricting ISRO in launching new satellites. ISRO has done an exemplary job in such an environment but clearly much more needs to be done if the goals of catering to organic growth of channels, providing HD and interactive options to customers are to be met in the near future.

Technology

DTH has brought in a number of technology options which were not available to viewers in the heyday of analog cable TV. DTH can carry multiple languages (for example audio in eight languages used in sports commentary or other channels, interactive channels which save the boredom of linear broadcasting, and features such as tele-text and subtitling).

Pay TV technologies have traditionally presented a very rich environment for entrepreneurs to launch a slew of consumer products worldwide. Sling box, digital video recorders, multiple satellite feeds with satellite switching, and media room (wireless TV in the home integrating all devices) are a few examples of some consumer end products which are available in the developed markets. Regulatory environment and lack of resources such as spectrum have made options such as terrestrial extensions, IP streaming, or wireless delivery a non-starter in India. Convenience products for pay TV remain a dream and customers are solely dependent on the service provider for all products and services.

Distributors worldwide have had a field day with advanced implementation technologies such as optical fiber MDUs, extensions to wireless delivery, and advanced video-on-demand services which can be provided with interactive broadcasting. These opportunities are multiplied many folds with HDTV which is set to enter the stage in the next few months.

However, opportunities in India have been extremely subdued owing to proprietary devices, with commonality of channels on all platforms limiting the interest in multiple DTH platform reception. Limited satellite capacity has meant rudimentary VoD services and consequent implications on its popularity. The only credit to technology can be the introduction of MPEG4 (H.264/AVC) on new platforms, which however does not help the viewers in a significant way.

Market

There is now a growing awareness of the importance of DTH services in the country. This has no doubt come about by virtue of the market power the new operators wield owing to their direct access to a base of subscribers approaching 5 million, such as DD-Direct and Dish TV.

TV ratings of channels on DTH platform have now started and advertisers are willing to pay separately for TV channels which are carried on DTH as compared to the earlier practice of paying for cable subscribers, ignoring DTH. It is now possible for a new broadcaster to use DTH as a launch platform as it gives a ready base of subscribers and country-wide delivery. Movie distributors are also more willing to have their movies delivered using VoD features and work on a revenue sharing basis.

DTH presents a superior alternative as compared to cable in most markets owing to the highly split nature of industry despite pockets of digitization. DTH subscribers are expected to grow in excess ?of 30 percent per year through 2012, leading to the DTH representing nearly 20 percent of pay TV subscriptions.

Shape of things to come

Entry of new operators in DTH has transformed the markets by better user awareness and consumer choice and sharpened the competitive scenario. However, the 30 percent+ growth has prevented the new entrants from splitting the existing markets. On the other hand, all operators have reported buoyant growth even as the competition gets serious.

The markets in the immediate future will be governed by the addition of HDTV channels as DTH operators fulfill the demand of top end users with paying power. Introduction of HDTV will also lead to a distinction in DTH platforms and consequent desire of users to have multiple DTH installations in a single home. Networking of home devices such as HD-PVRs, HDTVs, and DVD-HD players will become a necessity and will be accompanied by IP-based services including voice and data. It will also give a fillip to the entertainment industry with Dolby Digital 5 home theaters, interface devices, and media players getting integrated into the DTH transmission environment.