MUMBAI: While India has witnessed Phase I and Phase II of digitisation, the remaining two phases (i.e Phase III and IV) will go a long way in aiding more transparency. Direct to Home (DTH) platforms too are an enthused lot, hoping it will help them gain additional subscribers.
Speaking about the expected development Tata Sky CEO Harit Nagpal said, “As digitisation rolls out, we are hopeful that a large number of consumers will move to DTH because analogue cable is little less organised in Phase III and IV of digitisation.”
Nagpal said that the first two phases impacted approximately 15 per cent of the TV population. According to him, when it came to the process of conversion from analogue cable to digital, about 40 per cent of the analogue subscribers picked up DTH. Nagpal was speaking at the Asia Pacific Operators Summit (APOS) held in Balli recently.
Speaking about net additions, he said that the pace had not slowed down. “Even when we were acquiring close to 10 million subscribers as gross, we were getting three to four net additions. Today, the industry picks six to seven million gross, it still makes three to four million net.” Nagpal further added that this would be facilitated by digitisation in places where the first two phases were complete.
Nagpal believes that the top four DTH players will become cash positive very soon. “It’s on the horizon now. We have already been covering our operational costs. The investment that is really going into the business is going to fund the growth,” he said.
According to Nagpal, an investor wouldn't mind finding the growth because on a 10-12 per cent churn, the life of a customer is seven to eight years. As such if the pay back is three years, then an operator has about six to seven years cash life with the customer.
“Thus an investor is happy to invest and add the gross adds faster and does not mind paying for the investment,” he added.
While on the one hand, Videocon d2h CEO Anil Khera expressed his displeasure over premium content being distributed for free by Over The Top (OTT) platforms, Nagpal explained his point of view. “I treat myself, i.e. a content access provider, as a grocer. We buy soaps and cereals in bulk and sell them in small packets. If three generations in a single family want to consume bread, rice and pasta we have it stocked. Secondly, if these three generations ordered the food respectively via in shop, over the phone or placed an order online, I have to cater to that and make it convenient for customers.”
He further said that he would not go about cursing people as to why content is being given out for free. “I have to make it convenient for the customer to find everything at one place,” he stressed.
On the added service of video on demand (VOD), Nagpal said that four years ago when Tata Sky launched VOD, it had seen an investment of close to $10 million. Currently the operator was just breaking even on operating costs. “But we know it's a long term play. It's not necessarily a play of premium content. In fact, on our first VOD we made available Hindi movies and not English. The reason being English movies' rights holders were sceptical and insisted on minimum guarantees.”
On the issue of broadband bandwidth, Nagpal stated that going by the current world wide web phenomenon it was obvious that video cannot be carried by over the air as the last mile has to be connected by at least some form of wire. He hoped a new entity would cater to this business very soon.
“Currently there are a lot of entrepreneurs who provide broadband very well in some areas. They have just been constrained by expansion. We are hoping that in a year's time the landscape will change. Some funding will come in and then they will expand,” he concluded.
