RCom talks to television vendors for DTH launch

The battle for subscribers in the direct-to-home (DTH) market is hotting up with Reliance Communications (RCom) close to finalising a bulk deal with the country's leading TV manufacturers "" LG Electronics, Samsung India and Sanyo "" which will be offered to customers at a hefty discount bundled with a DTH package.

The telecom company, which has already started a soft launch of its DTH services under the name Big TV, is expected to launch it formally sometimes in June this year.

Under the scheme being prepared, customers will be offered a choice of an array of LCD set, which will be around 25 per cent cheaper than the market price of the model, and will come bundled with a DTH service offer for a certain number of years.

A senior LG executive said: "Reliance Communications had asked us to submit our quotiation for the 26-inch LCD television sets, which we have already done." LG insiders, however, add that the order range could be as large as 30,000-40,000 LCD sets initially.

The LG 26-inch LCD televisions have a maximum retail price of about Rs 34,000, but because of such large orders, Reliance Big TV may actually acquire them 25-30 per cent discounted rates, LG executives added.

Sources in Samsung also admitted that talks are on for a bulk deal. A RCom spokesperson, however, declined to comment on the issue.

Industry experts say that schemes between DTH operators and consumer electronics companies have been tried by others though no one has offered discounts on the TV sets.

The country's largest DTH company, Dish TV, has offered similar schemes to the consumers before with LG and others where if the consumers bought a particular LG television set, a Dish TV connection came free.

Even Tata Sky, the second largest DTH operator, has had similar tie-ups with Korean electronic major Samsung for its LCD and plasma television sets.

Last year, Tata Sky came out with an offer where, depending on the size of the television sets, the consumers got discounts on the set-top box.

For example if consumers bought a 21-inch television from Samsung, they got that much of a discount (they would get 21 per cent off) on their Tata Sky connection.

Meanwhile, Reliance is also talking to contract manufacturers in Korea and Taiwan for offering even a branded Big TV LCD set in the market by next year that will be priced even cheaper than LG and Samsung models.

Industry sources say that the estimated LCD market in the country for this year is just less than one million but it is virtually doubling every year.

Sources point out that they expect Reliance to pick up an order of around 100,000-200,000 to begin with and that Reliance will get it at a volume discount.

The move by Reliance to bundle LCDs comes close on the heels of cut throat competition, which is expected to be seen in the DTH service business. Exisiting players "" like Dish TV "" have already announced attractive offers, which includes offering connections free of cost to face the impending competition.

With a subscriber base of around 5.5 million, the DTH services business is expected to face tough completion with new players like Reliance, Bharti and Videocon joining the fray in the next few months. With more DTH players joining in, industry experts say that the existing subscriber numbers may double within the next 12-18 months.

Big TV is currently undergoing a test launch under which it's serving close to 45,000-50,000 customers. The test offering has been offered to employees and select associates at an entry cost of Rs 1,000 and a monthly subscription fee of Rs 325. In the monthly fee, Rs 100 worth of pay per view is bundled in free.