On key trends most likely to sustain the business

The key trends we see in the next few years will spin around three distinct areas. The first trend will be around HDTV - with the forthcoming Commonwealth Games to be streamed in HD format and the increasing availability of quality international entertainment channels in HD format, the segment will see availability of local HD content too (we already have our own HD content in Tamil and Telugu). Combining this with the growing popularity of HD/LCD television sets (we sell over a million sets annually) and we can clearly see the convergence of content, technology and broadcasting coming together on the DTH platform to make HDTV the most exciting phase of television entertainment. The second area which will see a clear trend in segmented customized content that will define growth in key regions. Though India is a large market, it displays very strong regional content preferences, baring the metro and large cities which anyways account for only 30 percent of the market size.

The third area for business growth will come from redefining VAS; market players need to look beyond generic VAS currently on play, and innovate on the strengths of the DTH platform to deliver real value to customers. For example, can we look at taking education to smaller areas where quality instruction is difficult, in partnership with local government or private sponsors? Niche players can immediately reach a large audience at a very optimal cost.

Readiness in the industry to leverage these opportunities

Though the DTH industry involves heavy capital expenses in the initial stages, the long term business growth will come from two paths - subscription from existing customers and adding new customer base. Existing subscribers will continue their loyalty, based on the entertainment value they get at the optimal price point. The customized flexible content packaging that we had pioneered continues to define the entertainment consumption pattern and is helping deliver new additions to the family while retaining and renewing the old base.

On growth in subscriber base vis-a-vis declining tariffs

The DTH market is in a similar influx point that the telecom industry displayed a few years back. In a growing market (we have barely touched 10 percent of all C&S homes), you need to display a flexible approach to managing your subscriber and tariff plans, watch it closely, and modify and rework, to maximize customer retention as well as make it an attractive buy-in for new customers. Lowering tariff plans to garner greater market share and grow the market is a normal practice in a growth phase industry. This will continue for the next 3-5 years when the DTH industry will have stabilized around the critical mass of customer base to propel the next stage of the business.

On Government support

It is an offer repeated assertion when it comes to government support for the industry; there are three areas where it is crucial for the government to support the DTH industry. First is in facilitating a level playing-field for different formats of entertainment-content delivery. Because, while the local cable operator can get away with lower subscriber declaration, we have a transparent system in place and declare the actual numbers. Undeclared subscriber base is a loss for not only the government in terms of taxes but also for the television channels. Secondly, we need government support in instituting a uniform single-tax; today we pay tax on the channels we buy from broadcasters as well as tax on the customer subscription. This needs regulatory intervention to address the anomaly. Thirdly, government should be more lenient in providing more bandwidth so that we can deliver sharper and focused entertainment value to our customers, HDTV, for example, calls for more space on the transponder. India, being a large market, we need to look at increasing the regional-content customization, which will allow for a robust and dynamic industry.