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| DTH firms losses may cross Rs 2,000 crore in 2008-09 |
| Ashish Sinha / New Delhi Dec 30, 2008, 00:42 IST |
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Gloomy outlook is projected for the direct-to-home (DTH) market in India, catering to over 11 million subscribers. The combined operating losses for 2008-09 may cross the Rs 2,000-crore mark, double of what they were in 2007-08 when the market was serviced by only two players — Dish TV and Tata Sky.
Currently, five private DTH players are offering their services — Dish TV, Tata Sky, Sun Direct, Big TV and Digital TV.
According to the latest projections by Hong Kong-based international media research agency Media Partners Asia (MPA), over $450 million in operating losses is projected between the five players this fiscal.
“We estimate that of the $450 million in operating losses, Tata Sky, Dish TV and Sun Direct will losses to the tune of $350 million while the rest will be shared between Reliance’s Big TV and Bharti Airtel’s DTH arm,” Vivek Couto, executive director, MPA, told Business Standard. “The losses of the new entrants are small because they launched their services in the last four months of 2008. Next year, the losses will be even higher,” said Couto.
In the 2007-08 fiscal, between Dish TV and Tata Sky, the combined operating losses stood at about Rs 1,100 crore, with Tata Sky incurring losses of over Rs 830 crore. In the 2006-07 period, the combined operating losses of both Tata Sky and Dish TV stood at around Rs 550 crore-plus.
According to industry experts, the DTH companies have to take losses on every subscriber they acquire, on account of heavy subsidy given on the hardware. While the range of subsidy varies from operator to operator, it is estimated that on every DTH subscriber acquired, the operator incurs a loss in the range of Rs 2,000-Rs 4,500.
Recently, Dish TV and Tata Sky crossed the 4-million and 3-million subscriber marks, respectively, while Sun Direct TV acquired 2 million subscribers.
“Each of these contenders is burning cash in order to grow subscriber base as part of a mass-market proposition and reach break-even within a five-year timeframe. However, each party will need plenty of more funding, which can be problematic in these constrained economic times,” the MPA report said.
Couto said Sun TV’s international partner Astro has invested more than $132 million in Sun Direct but remains concerned about higher costs as Sun rolls out in northern and western India. “The Astro’s portion of Sun losses is likely to reach $18-20 million in FYE January 2009,” he said.
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