Bharti Expects To Be Number One In Satellite Pay-TV In India

[Satellite News – 5-8-08] Bharti Airtel, one of India’s largest telecommunications companies, wants to expand its business and is setting its sights on India’s burgeoning satellite pay-TV market.
    Bharti Airtel already serves about 62 million cellular customers in India and plans to use that base and its well-known brand to launch direct-to-home (DTH) services before the end of 2008, said Atul Bindal, president of telemedia services at Bharti Airtel.
    “We believe that we have an immense opportunity in the booming Indian DTH market,” Bindal said. “After all, today, India is the third largest cable and satellite market in the world. The changes in consumption habits, coupled with regulatory pressures, have propelled it to start migrating to digital platforms with a measure of success.”
    Simon Twiston Davies, CEO of CASBAA (Cable & Satellite Broadcasting Association of Asia), believes the potential for DTH services in India is huge. “In India, there are now three established DTH operators with 3 [million] to 4 million subscribers between them,” he said. “However, India also has 72 million cable households and the opportunity for DTH remains huge, especially when you have a cable environment which is largely underinvested in terms of digital services.”
    Players such as DishTV and Tata Sky already are established in the market, but there remains room for more, according to Twiston Davies. “The upside for satellite is quite clear,” he said. “At a recent CASBAA forum for members and government officials, we were actually debating whether there is room for eight DTH providers in India and whether that would be sufficient. That is mind-boggling. The industry is expecting [telecommunications companies] Reliance and Bharti are to launch additional DTH services within six months. That would take us to five. Another three players [in the DTH space] would not be inconceivable.”
    The market is expected to grow to 30 million DTH subscribers by 2010, and despite the numerous potential competitors, Bindal is confident that Bharti will be near the top of the market. “We will aim to acquire a dominant share of the new DTH subscriber growth of 5 million expected next year,” he said. “Our competitive differentiator will be customer experience — something that Airtel stands for and delivers. It is because of this differentiation that Airtel has been able to progress and grow across segments in [telecommunications], and this is what will lead our growth in DTH. We would compete on the basis of our differentiated product offerings, superior customer experience and reach of distribution.”
    Airtel also will offer advanced services as soon as possible, including personal video recorder offerings within the first year of launch. The operator also has plans to offer interactive services. “In the current market scenario, pay-per-view and interactive content are the only two content differentiators possible in DTH.”
    But Bindal admits the Indian market challenges despite the obvious potential for growth. “Firstly, you have the costs involved,” Bindal said. “The cable television viewing subscriber has to see value for money in migrating from his existing cable television connection to a digital television connection. For this migration, the two drivers are the one-time entry cost and the monthly subscription cost, which have to be made low and attractive. Additionally, the cost of content has to be made affordable for the subscriber. Secondly, you have the issue of content exclusivity. Globally, DTH operators have content exclusivity, which helps the operator differentiate its service. However in India, government regulations do not permit content exclusivity. We need to look at innovative ways of offering content to customers.”