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Is the Indian Broadcasting Industry Playing a Game of Dice?

The outlook and potential growth of the Indian television industry promises to be optimistic. With a healthy CAGR of 13 percent over the last 3 years, at a revenue of Rs. 47,000 crore in 2015, 35 percent of the large base of 253 million households ?remains untapped as these households do not own a television set. Of the 165 million TV households, 148 million have opted for pay-TV and set the path for a Rs. 65,000-crore industry revenue?by 2017-18.

Having said this, the industry is in a state.

The deployment of NOFN connecting 250,000 GPs continues to be slow. Only 30,000 GPs have been connected so far.

Twelve thousand gram panchayats, identified to be connected through high throughput satellites, are unlikely to see HTS over the Indian skies before 2020, considering the remoteness of their locations and low-population density.

Antrix and ISRO, occupying the central role in the satellite domain, continue to throttle the growth of this sector. With short 3-year foreign transponder contracts and lack of visibility in the current contracting process, Indian companies are unable to expand their businesses to match market opportunities. The ad hoc mechanism for grant of spectrum through WPC on a provisional basis, with no visibility of when the next spectrum allocations will be entertained, results in continued anxiety among the DTH and VSAT operators.

Limitations on the availability of Ku-band transponder capacity critically hamper the operations as well as expansion of DTH, which has had a CAGR of 10 percent over the last 3 years. With the increasing gap in shortage of transponder capacity, it seems highly unlikely that the DTH industry’s requirement of 200 transponders over the next 3 years will be met. The failure to have backup, a global practice of securing redundant satellite capacity for contingency planning, may sound the death knell for some DTH operators.

Investors and businesses need certainty of regulations and transparency in their implementation to make investment decisions and manage risks. The powers that be must not take away this right from the Indian industry.

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