While TV advertising has really benefited from the country’s economic growth within the last few years, it now seems to be the turn of TV subscription to take off in a big way with the advent of new access technologies.

Whether it’s the digitization of cable TV services, the introduction of conditional access system (CAS), or IPTV and DTH, investments are pouring in for the creation of new infrastructure and the existing one’s upgrade. There is an ample evidence of India earnestly pushing for an image makeover in the TV broadcasting industry.

Concerns remain, related to regulation in the wake of digital convergence; restrictions on pricing under CAS; or the subject of rights exclusivity within DTH. But India has embraced new technologies with open arms to chart a revolutionary course.

The challenge to the existing analogue TV broadcasting system might not yet be a telling one, but new service providers are growing apace. And some of the companies do not refrain from sharing bullish sentiments.

For example, Zee Network and the Essel Group of Companies, whose Founder and Chairman Subhash Chandra is scheduled to deliver a keynote speech at MIPCOM this year, have charted out maps for their distribution ventures. These include Wire And Wireless India Limited (WWIL), India’s top multi system operator (MSO), and Dish TV, India’s first private company to start DTH satellite broadcast operations in the country. Earlier this year, the Essel Group highlighted that with 112 million TV homes, India is the third largest TV market in the world and it is expected to grow at 7-8% over the next five years.

So what does future holds for a market like India, which has 219 million households with 112 million TV homes?

“India in the next 3-4 years is set for huge internal growth plus (it) will attract world attention primarily due to its pace of growth. The key development for a country experiencing 9% growth; for a media Industry looking at 19% growth; and a young India where over 60% of the population is below 25 years of age, is that the Indian consumer has started to pay for the content they consume,” Ronnie Screwvala , the other MIPCOM ‘India Day’ keynote speaker and Founder and Chairman of UTV Group told Television Asia.

“And that’s reflected from the pay-TV market and DTH, to the home video market and the price of movie tickets growing fourfold. Not more than 11% of the surplus income was being spent on Leisure and Entertainment and that is slated to grow to 19% and that’s where India will be the spotlight of the world,” said Screwvala.

On the current stature of India in the global media and entertainment business, Reliance Entertainment’s President Rajesh Sawhney said: “Indian economy will grow at 9-10% per annum. Consumerism is on meteoric rise, which is fuelling advertising in general and on TV in particular. Digitalization of cable, DTH and IPTV induction will see multiple growth in declared subscribers and subscription revenues.”

The digitization of media brings with it new levels of technical sophistication and content production. It is being projected that India will have 90% penetration from an estimated 185 million television homes in 2015.

“India is on the cusp of change.A digital revolution. DTH, digital cable and IPTV are realities today. These three forces are backed by capital, corporatehorse power and regulatory willpower. However, the transition to digital technology will face tremendous challenges from entrenched trade, consumer apathy, but also intensive competition,” Sawhney told Television Asia.

Sharing his viewpoint on regulatory hurdles in developing a level-playing field in a burgeoning pay-TV market like India, he said, “Regulation has always been a challenge. I advocate self-regulation as far as content is concerned. Pricing of TV channels and bouquets is a tricky issue and the regulator has to see that there is no monopolistic or restrictive behavior. The interests of the consumer need to be balanced with the health of broadcasters as well as platform owners.”

As far as distribution players themselves are concerned, there isn’t any wait and watch policy.

Among the Essel Group companies, WWIL, currently present in 43 cities of India, operates through a set of 4,000+ franchisee local operators called LCO’s. The company, with a current market capitalization of US$611 million, is targeting to roll out in 66 cities within three years and targeting triple play services.

Dish TV India Limited, the first DTH Company to get listed on the stock exchange with market capitalization of over US$1billion, has content strength of 170 channels and a base of 2.1million registered subscribers by the end of June 2007. During the specific quarter, it added 180,000 new subscribers. It has a dealer universe of 30,000 outlets that caters to consumers across 4,300 towns. The organization is also supported by 1,000 call centre agents speaking ten different languages from seven different locations. Its gross revenue was around US$22 million for the first quarter (ending June 30 this year).

In July this year, the company introduced the first of its kind technology innovation – dishtv on computer. This special set top box when connected to the desktop PC, can alter between computer and live TV merely at the click of the button. This box comes at a price of around US$100 inclusive of equipment, installation and taxes. The product will be launched in a phased manner and is currently being made available at select top cities of Delhi, Mumbai, Bangalore, Kolkata, Pune, Ahmedabad and Hyderabad.

Other than Star India, new players in the DTH and IPTV are set to challenge the Essel Group in a big way.

Tata Sky Ltd., the JV between the Tata Group and Star, recently shared that the DTH service crossed the one million connections mark in its first year of operations. This milestone marks the fastest first million reached by any DTH platform in the world.

According to Vikram Kaushik, Managing Director and CEO, Tata Sky Ltd., the company’s endeavor is to cross the eight- million mark in the next five years.

Among the performance highlights was Tata Sky attaining 87% brand awareness within the first six months of launch. It expanded its distribution network from 300towns and 10,000 dealers at the time of launch in August last year to 4,500 towns and 30,000 dealers across the country. Star’s MSO venture, Hathway Datacom Pvt. Ltd., offers cable TV (in 10 cities), digital cable TV and Hathway Cable Internet in

eight cities.

Overall, the progress made by CAS, after being implemented in a phased manner in three cities including Delhi and Mumbai is as follows: 512,000 STB’s have been reported to be deployed by MSO’s/ cable operators at the end of July this year , according to the Ministry of Information and Broadcasting. While sharing the figures, the Ministry stated that the extension of CAS requires evaluation of first phase (introduced in January this year) and large scale consultations with stakeholders, consumer organizations and States, and hence, no time limit could be given.

Other than CAS, the DTH will soon have new players including Anil Dhirubhai Ambani Group’s(ADAG) Reliance BlueMagic and Bharti Group’s venture. The relatively new IPTV services launched by state run telecommunication firms in Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL), too, have been in the news.

One of the much awaited ventures is ADAG’s Reliance Entertainment, which is spearheading the group’s foray into the media and entertainment space, focusing upon building significant presence in the entertainment eco-system: across content and distribution platforms. The key content initiatives are across movies, music, sports, gaming, Internet and mobile portals, leading to direct opportunities in delivery across the emerging digital distribution platforms: digital cinema, IPTV, DTH and mobile TV. The company has made an entry into FM Radio through Big 92.7 FM.

“We want to be in the entire distribution chain of delivering entertainment content. And we want to be the number one player in each segment,” said Sawhney.

Companies like Reliance are taking a plunge at a stage when the DTH satellite market is expected to grow from 2.6 million subscribers in 2006 to 38 million by 2015.

So will DTH will be a force to reckon with considering its relatively early introduction and aggressive marketing?

Sawhney said, “DTH is an exciting market in India. It will also be a tough market with six serious players in the battle. I expect DTH to provide a new platform for new and innovative content to flourish in India. Content has been key to the success of DTH platforms in other markets. We will see how this plays a role in the evolution of DTH in Indian market.”

In the IPTV arena, MTNL, the first company in India to launched an IPTV service in October 2006, is targeting a subscriber base of 80,000 by around March 2008. Recently, BSNL introduced the same service in Bangalore and Kolkata with plans to deploy the triple-play service in as many as 28 cities over the next two years or so.

BSNL and MTNL and telecom sector on the whole have been engaged in expanding their network for triple play services.

For example, BSNL commissioned a world class, multi-gigabit, multi-protocol, convergent IP infrastructure. The broadband service is available on DSL technology, on the same copper cable that is used for telephone connection, in a large number of cities/towns on country-wide basis.

The Ministry of Communications and Information Technology has set a target of providing nine million broadband connections by this year-end and 20million connections by the end of 2010. BSNL, as part of their action plan, envisage adding an average of 500,000 broadband connections per month from January 2008. MTNL envisages providing one million broadband connections by the end of this year and adding an average 100,000 connections per month from January, 2008. The level of broadband customer base of BSNL and MTNL is at least 900,000 and 420,000, respectively.

On how quickly services such as IPTV might reach a critical mass to challenge CAS and DTH, Sawhney said, “State-owned incumbents have a natural advantage. They own a 50 million subscribers copper factory, but so far they have not shown much enterprise in making the copper factory evolve to provide triple play services. I feel private sector participation is key to growth of IPTV in India, which is around the corner. I feel IPTV has a great future in India in long term, however in short term, it will be DTH that will be key to driving consumer penetration.”

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