Anil Ambani gets go-ahead for DTH

The government has granted a letter of intent to the Reliance-Anil Dhirubhai Ambani Group (R-ADAG) for operating direct-to-home (DTH) broadcast services in the country.

Christened Reliance Blue Magic, it will be the fifth DTH operator after Dish TV (part of the Zee group), Tata Sky (an 80:20 joint venture between the Tatas and Star TV), Doordarshan's plain vanilla free-to-air offering, DD Direct Plus, and the Kalanidhi Maran-promoted Sun TV. The platform is expected to become commercial by the middle of next year.

With over 3.25 million subscribers, DTH penetration is roughly 5 per cent of the 68 million cable and satellite homes. Subscriber numbers are set to take a quantum leap with Reliance's entry into DTH and the Tata Sky launch just over a month ago.

PricewaterhouseCoopers estimates this figure will rise to 10 million by 2010, while some other industry estimates peg it at 15 million.

R-ADAG's move into DTH is part of the group's strategy to straddle the entire range of delivery systems through which content can be delivered to customers.

The group is already working on IPTV to deliver TV channels through broadband, leveraging the company's fibre optic backbone. It also hopes to use data-rich CDMA as well as 3G services to deliver content on mobile phones.

It is for the same reason that the group has ventured into the multiplex and film exhibition business by buying a majority stake in Adlabs Ltd. It has also bid for and won 45 FM radio stations across the country.

The synergies are obvious. A movie shown in a multiplex can be offered on the DTH channel as pay per view, while its music can be played on FM radio.

R-ADAG is making a foray into the content business as well. Just a few days ago, it bought a majority stake in Synergy Communications, the company promoted by quiz master Sidharth Basu. It has also tied up with big producers like Ramgopal Verma to fund film production.