DTH rates set to tumble

After years of suffering capricious cable operators, cable and satellite households will finally enjoy the upper hand.

With three more direct-to-home (DTH) operators set to enter the market by the year-end, subscribers can expect services at even cheaper rates.

Jawahar Goel, who heads Zee TV's DTH operations, Dish TV, reckons that prices will be down 20 to 30 per cent once Bharti, Reliance and Sun TV join the fray.

That's great news for the 25 lakh DTH homes in major cities but not so for the two existing players, Dish TV and Tata-Sky, the latter a joint venture between the Tata group and Star TV.

Although both DTH players have an edge over Conditional Access Service (CAS) providers, they suffer high customer-acquisition costs because they subsidise hardware purchases and monthly subscription bills to bring in volumes.

Industry sources say Tata Sky pays Rs 450-Rs 500 per subscriber for the 100-odd channels on its platform and charges subscribers Rs 300. Dish TV's per subscriber channel cost is Rs 220-Rs 250, but it charges only Rs 150.

Set-top box subsidies range from Rs 1,000 to Rs 2,000, depending on the model, against a rack rate of Rs 2,000 to Rs 3,500.

Overall, industry estimates suggest that the two would have forked out Rs 550 crore in subsidies to gain customers. This is over and above the Rs 2,500 crore both have invested to set up DTH infrastructure.