Indian DTH Focus On VAS

Competition is ramping up for India’s DTH platforms, with Sun Direct and Reliance Big TV both announcing first-in-the-market services.

Sun Direct launched India’s first regional language VOD service in Telugu starting January 9, creating an additional revenue stream in a bid to raise ARPU.

The company owns more that 2,000 movies in the Telugu language and has started the service with the film “Shankar Dada Zindabad”, starring the popular South Indian actor, Chiranjeevi. Each movie is priced at Rs25/US$0.55, and has a flexible showing time starting at 11am, 4pm, and 8pm on Saturdays and Sundays.

The move is part of a greater plan to boost the positioning of DTH and create a specific release window for satellite TV, between that of the theatrical and DVD releases.

“With the lifespan of films in theatres reducing to an average of two to three weeks and piracy eating away the revenues, DTH platform on television will emerge as an attractive alternative for production houses,” COO Tony D'Silva, said in a statement.

Reliance Big TV meanwhile, the DTH arm of telco major Reliance Communications, is to offer gaming services in collaboration with Indiagames, UTV Software’s gaming unit. The games will be part of the platform’s focus on interactive content, and it promises to offer eight different games across many genres.

VAS currently makes up for less than 5% of Big TV's business revenue, but the company expects this to double over the coming months. Gaming will make up around 10% of VAS revenues. In five years, it forecasts VAS revenues to reach Rs1 bil./US$21.8 mil.

In line with its focus to monetize VAS opportunities, Big TV is focusing on its pay-per-view offering, as well as developing interactive services and advertising revenue. It is expecting 2.5 mil. subs at the fiscal year ending Mar. 2010, vs. 2.1 mil. at end-Dec. 2009.

Leading the charge
In total, India’s gross DTH customer base reaches nearly 20 mil., versus 70-80 mil. cable homes. Sun Direct, along with Bharti, is one of the fastest growing DTH players, adding ~500,000 subs over three months to end-October 2009 according to MPA – at the expense of ARPU, which remains low at Rs90 per month.

The company is still operating in the red, reporting a Rs1.5 bil. loss in the same three-month period. Sun and Malay satellite major Astro will fund the business moving forward, with the latter having invested US$120 mil. to date. Breakeven is expected by 2014.

DTH Tracker, end-Dec. 2009 numbers

OPERATOR	Gross subs (mil.)	Market Share (%)
Dish TV	6.2	31.8%
Sun Direct	4.8	24.6%
Tata Sky	4.6	23.6%
Big TV	2.1	10.8%
Bharti	1.8	9.2%
Total	19.5	100%
Source: MPA analysis