29-05-2013, 11:34 AM
Market Structure :Indian DTH Industry
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Introduction
Direct To Home (DTH) is a distribution platform for multichannel TV programmes on Ku
band (high frequency of 11.7 to 14.55 Gigahertz) by using a satellite system which transmits
signals directly to subscriber premises
The term predates DBS satellites and is often used in reference to services carried
by lower power satellites which required larger dishes.
DTH Industry in India
In earlier days there was only one TV channel in India the “Doordarshan”, Channel doordarshan was owned and operated by government of India. In those era every home which had a TV set used to have its own antenna to capture the signals.
The Cable Television Ordinance Law was paased in January 1995. This enabled cable operators to feed channels and later on private companies were allowed to air their own channels and this led to the explosive growth in number of TV channels and number of cable operators.
The growth of TV channels & cable operators created a big industry and market opportunities.
Untill few years back there were as many as 1,00,000 cable operators across India. However the services provided by cable operators were poor.The strikes, increase in tariff plan, selective broadcast and poor services were major cause of dissatisfaction among the customers. This has created an opportunity for DTH, which serves an immediate threat to the high-end cable networks. Some of the key player in the industry are DishTV by Zee group, TataSky joint venture of Tata & Star TV, Big TV by Anil Dhirubhai Ambani Group, Digital TV by Bharati Telemedia, SUN Direct from the promoters of Sun TV.There are some other companies who are comtemplating to start their own DTH like Videocon.
Structure of the Indian DTH industry
The structure of the DTH industry in India can be categorized as an “Oligopoly”.
The word Oligopoly is derived from the Greek for few (entities with the right to) sell.
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists).
An oligopoly is a market dominated by a few large suppliers. The degree of market concentration is very high. Firms within an oligopoly produce branded products and there are also barriers to entry.
Analysis of Indian DTH industry:
Indian DTH industry is still at nascent stage. In the year 2003 DD Direct+ was launched since DD Direct+ is non commericial and free DTH service ( www.financialexpress.com& www.wkipedia.org) hence we would focous our discussion on private players in the industry.
As of now DishTV, TataSky, BigTV, AirTel Digitel TV, Sun Direct are in the industry. There are some other players like Videocon, who want to join this highlu lucrative industry. Since there are only 3 major players and the market concentration is very high Indian DTH industry is oligopolistic.
Recent entries in the industry
The DTH industry in India is still at nascent stage and recently three companies have entered in the industry Big TV from ADAG(Anil Dhirubhai Ambani Group),Sun DTH by promoers of SUN TV and Digital TV from Bharati telemedia.
DTH industry in India offers immense potential of growth.It is one of the fastest growing DTH market in world.
Economic drivers of this decision for BIG TV by ADAG
The total number of TV owning households in India is estimated at 120 million. This represents a 54% penetration of TV in Indian households. Out of this, Cable and Satellite households are 68 million. Television households are estimated to grow to 165 million in 2011, resulting in an annual compounded growth rate of 6.5% p.a. The DTH industry is currently pegged at 2.6 million subscribers.
The DTH Industry revenue is expected to grow at 80% compounded per annum over the
next 5 years and will be in the range of Rs.100 billion in 2011. Due to the continued buoyancy in the Indian economy and an annual growth rate of over 9%, the country's gross domestic product is touching US$ One trillion. This, coupled with increasing penetration of TVs, will give a boost to the demand for better quality products like DTH. In terms of sheer numbers, DTH subscribers are expected to touch 27 million in 2011 and 61 million in 2015.
Big TV, which is targeting five million customers to begin with, seeks to capture 40% of the current DTH market in the next 12 months. Currently, there are 120 million television homes out of which 80 million are cable and satellite (C&S) homes and a measly six million pay-TV DTH homes, comprising less than 5% of the domestic television market.
Economic impact of the decision:
BIG TV DTH was the largest retail rollout of a home entertainment Service in India.
BIG TV, achieved the 1 million subscriber mark, within 90 days of its launch. This has helped BIG TV to capture the share of 15 per cent in just 3 months in the fast-evolving Indian DTH sector. It has become the 3rd largest player in very short time and is positioned to challenge DishTV and TataSky. This is very significant considering the fact it took years for DishTV & TataSky to reach the same number of subscribers. AirTel Digital TV was launched on 9th October but they could not become as big as BIG TV.