INDUSTRIAL ANALYSIS

OF

DTH INDUSTRY

CONTENTS

INTRODUCTION OF DTH INDUSTRY INTRODUCTION OF FIRMS

DISH TV TATA SKY SUN TV BIG TV AIRTEL DIGITAL TV

MARKET SHARE COMPETITIVE PROFILE MATRIX EXTERNAL FACTOR EVALUATION TRAI RULES & GOVERNMENT SIXTH FORCE CONCLUSION

GENERAL PERCEPTION INVESTORS POINT OF VIEW

BIBLIOGRAPHY

INTRODUCTION OF DTH (DIRECT TO HOME) INDUSTRY

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 9th Asian games which were held in 1982 in the country’s capital New Delhi

heralded the mark of color TV broadcasting in India. In 1991, Indian economy was liberalized

from the License Raj and major initiatives like inviting foreign direct investments, deregulation

of domestic business emerged. This lead to the in flux of foreign channels like Star TV and

creation of domestic satellite channels like Sun TV and Zee TV. This virtually destroyed the

monopoly held by doordarshan. In 1992, the cable TV industry started which lead to revolution.

Every city in the India had a complex web of co-axial cables running through the streets with a

new breed of entrepreneurs called as cablewallahs or Local Cable Operators (LCO) taking in

charge of distribution. The film industry was shocked by this sudden growth and there were even

organized protests for calling off the Cable TV industry. There were simply too many cable

operators in the country and the channels had a difficult time in getting its returns as the existing

system was a non-addressable and the operators could simply give a reduced number of

subscribers to amass profit. This lead to the emergency of a new breed of firms called as Multi

System Operators (MSO) who had heavy financial muscles to make capital investments. . The

MSO industry became highly monopolistic which warrants government participation to ensure

competition.

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 acrossIndia. 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 is an immense opportunity for DTH in the Indian market. The

opportunity in India almost 10 times that in developed countries like the US and

Europe. For every channel there is a scope for broadcasting it in at least ten

different languages. So every channel multiplied by ten, that is the kind of

scope for DTH in the country.

INTRODUCTION OF FIRMS (DTH INDUSTRY)

Dish TV  

Dish TV is the first private DTH satellite television provider in India, using MPEG-2 digital compression

technology, transmitting using NSS Satellite at 95.0. Dish TV's managing director and Head of Business

is Jawahar Goel who is also the promoter of Essel Group and is also the President of Indian Broadcasting

Foundation and Mr. Subhash Chandra is the Chairman of Dish TV. Dish TV is a division of Zee Network

Enterprise (Essel Group Venture). EGV has national and global presence with business interests in media

programming, broadcasting & distribution, speciality packaging and entertainment. Zee Network

incorporated dishtv to modernize TV viewing. By digitalizing Indian entertainment, this enterprise

brought best television viewing technology to the living room. It not only transmits high quality

programmes through satellite; but also gives a complete control of selecting channels and paying

DTH service was launched back in 2004 by launching of Dish TV by Essel Group's Enterprises. Dish TV

is on the same satellite where DD Direct+ is. Dish TV started its service in Pakistan with the collaboration

of Budget Communication. Dish TV was only DTH operator in India to carry the two Turner channels,

Turner Classic Movies and Boomerang. Both the channels were removed from the platform due to

unknown reasons in March 2009. Dish TV uses NSS-6 to broadcast its programmes. NSS-6 was

launched on 17 December, 2002 by European-based satellite provider, New Skies. Dish TV hopped on to

NSS-6 from an INSAT satellite in July 2004. The change in the satellite was to increase the channel

offering as NSS 6 offered more transponder capacity.

Tata Sky

Tata Sky is a DTH satellite television provider in India, using MPEG-2 digital compression technology,

transmitting using INSAT 4A at 83.0°. Tata sky is incorporated in 2004; Tata Sky is a JV between the

TATA Group and STAR. Tata Sky DTH endeavors to offer Indian viewers a world-class television

viewing experience through its satellite television service. Vikram Kaushik is present CEO of Tata Sky

Ltd. The TATA Group is one of India's largest and most respected business conglomerates. It comprises

93 operating companies in seven business sectors and diversified group: information systems and

communications, engineering, materials, services, energy, consumer products and chemicals. The TATA

Group has operations in more than 40 countries across six continents and its companies export products

and services to 140 nations.

The Group and its enterprises have been steadfast and distinctive in its adherence to business ethics and

their commitment to corporate social responsibility. This is a legacy that has earned the Group the trust of

many millions of stakeholders in measure few business houses anywhere in the world can match.  The

SKY brand, owned by the UK-based British Sky Broadcasting Group, brings to Tata Sky the reputation

of more than 20 years experience of satellite broadcasting. SKY is well known for the innovative products

and services launched by BSky, such as DTH broadcasting in 1989, digital satellite broadcasting in 1998,

interactive television services in 1999 and the SKY+ personal video recorder in 2001. Tata Sky joins an

international group of DTH businesses that includes platforms as far apart as the UK and Italy in Europe,

and Mexico and Brazil in Latin America. Tata Sky Ltd is the First Indian DTH provider to be awarded

the ISO 27001:2005 accreditation, the ultimate benchmark for information security. The assessment for

the certification was conducted by Intertek Systems Certification, the management systems registration

business unit of Intertek Group plc and is accredited by several internationally-recognized accreditation

bodies worldwide.

In October 2008, Tata Sky announced launching of DVR service Tata Sky+ which allowed 45 hours of

recording in a MPEG-4 compatible Set Top Box. The remote is provided with playback control keys and

is being sold with special offers for existing subscribers. Tata Sky was selected as a SUPER BRAND for

the year 2009-2010 by an independent and voluntary council of experts known as Super brands Council.

It is the only Indian DTH to have won this distinction.

SUN DIRECT

Sun Direct is a DTH satellite television provider in India, using MPEG-4 digital compression technology,

transmitting using INSAT 4B at 93.5°E. It is the country's first MPEG 4 technology DTH service

provider. Sun Direct is a DTH service in India headquartered in Chennai, Tamil Nadu. Sun Direct TV

was registered in February 16, 2005. However, the failed launch of INSAT 4C resulted in a lack of

transponders, delaying the launch. The service was finally launched on December 2007 after availability

of transponders from INSAT 4CR. Because of the lowest pricing of any DTH in India Sun Direct spread

rapidly all over the country. On December Sun Direct was launched in Mumbai and announced its pan

India launch. By 2009 it became leading DTH provider with 3 million subscribers. This makes it 4th

largest DTH service provider of India. In April 2009 Sun Direct officially launched its High-Definition

service in India.

Sun Direct uses the latest MPEG-4 based technology to increase broadcast capacity.

Sun Direct provide next-generation services in fast-growing and emerging markets quickly and

efficiently. Sun Direct selected Oracle based on its convergent multi-service capabilities and proven real-

time scalability allowing it to consolidate billing operations, enables powerful new service offerings and

improves visibility into customer information across services.

BIG TV

Reliance BIG TV is a DTH satellite television provider in India based in Navi Mumbai, using MPEG-4

digital compression technology, transmitting using MEASAT-3 91.5°east. It is the 5th DTH service

launched in India. Reliance BIG TV limited is a part of Reliance Communications Ltd., a subsidiary of

Reliance Anil Dhirubhai Ambani Group founded by the Late Dhirubhai Ambani, the Indian business

tycoon and owned by his son Anil Ambani. BIG TV started operations from 19 August 2008 with the

slogan "TV ho Tho BIG Ho" ("If you have a TV, make it BIG"). It currently offers close to 200 channels

and many interactive ones, 32 cinema halls (i.e. Pay Per View Cinema Channels) as well as many Radio

channels. The company plans to increase the number of channels in the near future to 400 and begin

High Definition (HD) broadcast. It is the first Pan-India DTH provider that uses MPEG-4 for

broadcasting. There are also plans to introduce services like i-Stock, i-News and other such interactive

services in the future.

Reliance BIG TV was launched on August 19, 2008 with the sole aim of providing the consumer with

quality and enriched home entertainment service at value-driven pricing. Reliance BIG TV's launch in

August was probably the biggest roll-out in home entertainment ever and deployed the most advanced

MPEG4 technology that enabled them to deliver best quality digital audio-video to the consumer. It also

got prepared for the future when Hi-Definition TV will be launched in India because only MPEG4

technology can support HD TV and not MPEG2 which is used by the earlier entrants in the DTH

industry.

Reliance BIG TV's retailer network is spread across 100,000 outlets in 6,500 towns in India. This was

literally unheard of in the DTH industry. They had effectively out-stripped the competition here. When it

came to pricing – packaging, their introductory offer stood at Rs. 1,490/- with 3 to 6 months of free

subscription. They also introduced 32 Pay-Per-View Movie Channels, the highest by any DTH player.

AIRTEL DIGITAL TV

Bharti Airtel Limited is the flagship company of Bharti Enterprises and is India’s largest

integrated and the first private telecom services provider with a footprint in all the 23 telecom

circles. As India's leading telecommunications company, the Airtel brand has played the role of a

major catalyst in India's reforms, contributing to its economic resurgence. Airtel since its

inception has been at the forefront of technology and has steered the course of the telecom sector

in the country with its world class products and services.

Airtel Digital TV is a DTH (Direct to Home) service from Bharti Airtel. It uses MPEG-4 digital

compression with DVB-S2 technology, transmitting using INSAT 4CR 74°E

Airtel digital launched on 8 October, 2008 with a 360 degree mega campaign 'Come Home to the Magic.

Since then it has launched 2 other campaigns: ‘Stars come home’ (March 2009) and ‘DTH Picture Clarity

(August 2009) has increased its channel base to 183+ channels. Airtel digital TV is now amongst the

fastest growing DTH brands in the country and is available across 5000+ towns in India. It has also been

ranked as the best DTH service by “Living Digital” magazine.

Airtel chief Sunil Mittal said that Airtel digital TV and other DTH players have a bright future in Indian

market as the people are getting more attracted towards DTH because of its quality and affordability.

MARKET SHARE

COMPETITIVE PROFILE MATRIX

Key success factors

Weight Dish TV

Score Tata sky

Score Sun TV

Score Big TV

Score Airtel TV

Score

Market share

0.21 4.00 0.84 3.00 0.63 2.00

0.42 2.00 0.42 1.00 0.21

Financial resources

0.17 3.00 0.51 4.00 0.68 3.00

0.51 2.00 0.34 2.00 0.34

Brand reputation

0.11 4.00 0.44 3.00 0.33 3.00

0.33 2.00 0.22 2.00 0.22

Distribution capacity

0.07 4.00 0.28 3.00 0.21 2.00

0.14 2.00 0.14 2.00 0.14

Advertising capabilities

0.11 4.00 0.44 4.00 0.44 2.00

0.22 3.00 0.33 3.00 0.33

Pricing 0.09 4.00 0.36 3.00 0.27 3.00

0.27 2.00 0.18 3.00 0.27

Quality of customer services

0.10 3.00 0.30 4.00 0.40 3.00

0.30 3.00 0.30 3.00 0.30

Technology 0.14 3.00 0.42 4.00 0.56 3.00

0.42 3.00 0.42 3.00 0.42

Total 1.00 3.59 3.52 2.45 2.35 2.23

EXPLANATION OF COMPETITIVE PROFILE MATRIX ( INDUSTRY)

Market Share:

Market Share Decides Which Company Has Good Positions InIndustry and It Is Very Much Needed While Evaluating Any Company. Market share depicts the correct position of the industry. It gives out the percentage of the share contributed in the market by the industry.

Thus this industry carries 0.21 Weights to This Factor.

Financial Resources:

Financial Resources Help To Develop Any CompanyWhich Is Very Much Needed In This Industry. We Can See That Mostly All TheCompanies Has the Good Background. More resources lead to the faster growth of the industry.Thus industry carries 0.17 Weights to This Factor.

Brand Reputation:

It Is Always A Good Factor For Any Company. As In ThisIndustry All Companies Have Their Own Brand Image. Good brand name builds a good place in the market. Like all other key success factors this is also of great importance.Thus industry carries 0.11 Weights to this factor.

Distribution Capacity: As This Is Service Industry and Customers Purchase Not Frequently This Service But Almost Every Month They Have To Do Recharge. So, Company Has To Provide It In Good Quantity. Facility of sitting at home and getting recharge being done is provided to customers Thus 0.07 weights to this factor are given.

Advertising Capabilities:

As This Is Emerging Industry and There Is VeryHuge Untapped Market in Various Segments. So, Company Has To SpendMuch Budget behind Advertising. Thus industry carries 0.11 Weights To This Factor.

Pricing

Pricing is one of the factor which results in the profits of the industry. Right ratio of the prices set of the product along with the cost incurred in acquiring services is very necessary. Once customer satisfied with the prices results in the growth of industry.Prices should be set in such a manner so that the industry also not suffers any type of losses and customers are also attracted. Dth industry is said to be the expensive company, prices should be brought down. This key success factor carries 0.09 weights

Implications:

As The Industry’s Attractiveness of DTH Service Industry Is Very Good. And DishTV Is the Leader of This Industry Followed By TATA Sky, Sun Direct TV, RelianceBig TV, and then Airtel Digital TV The Competition Between All This Companies Is Very Hard. DISH TV and DIST TV have a tough competition with each other.Sun TV, Airtel & Reliance Compete With Each Other. Dish TV Is Ahead Of All TheseCompanies.

EXPLANATION OF CPM (ACCORDING TO EACH FIRM)

DISH TV

MARKET SHARE

Dish tv has good hold on the market share of the industry. 32% of the market is taped by Dish TV. Dish tv was the first private player to enter the DTH industry. Dish TV has are a strong

presence all across the geography of India with consumer and pocket friendly gamut of services. Dish TV has main advantage as 70% of DTH users are in rural and small towns. These rural and semi-urban towns are expected to contribute bulk of sales in the industry.

BRAND REPUTATION

As it is a business unit of the Zee group, Dish TV has built itself as a commendable brand inThe market. Dish TV Is Leader Of The Industry. It Comes With Most Successful Slogan“Dish Karo Wish Karo” Through Brand Ambassador Shahrukh KhanThis Provide Them Most Successful To Grab Subscriber Base. They AreAlso Come With New 360 Dergee Approach In Marketing With Slogan“Ghar Ayi Jindgi” To Compete With Tata Sky And Big TV.

PRICING

Pricing strategy of dish tv is to be appreciated.with the wide range of channels, good picture and sound quality it is cheaper comparatively. This is also one force helpful in acquiring highest market share.

CUSTOMER SERVICESIts unique offerings of mobile dish with presence in all Kingfisher Airlines, navy war ships, mobile vans and selected railway stations in India shows the technological edge and differentiation it having with respect to other brands, stands exemplified. But the subscriber acquisition cost is still very high. Confusing channel packaging for beginner users.

TECHNOLOGY

Dish TV Is A Satellite Provider In India, Using MPEG-2 Digital Compression

Technology, Transmitting Using NSS Satellite At 95.0. Wereas others firms are using better technology.

TATA SKY

MARKET SHARE

Tata sky is holding largest share in the dth market after DISH tv. It is giving very close competition to the leader of the market.

BRAND REPUTATION

Leveraging on brand TATA and High brand recall. Tata Sky was selected as a SUPER BRAND for the year 2009-2010 by an independent and voluntary council of experts known as Super brands Council. It is the only Indian DTH to have won this distinction.

PRICING

Pricing of TATA SKY is comparatively higher than the other emerging firms. But still it is acceptable due to the superior sound and picture quality.

TECHNOLOGY

TATA sky updated itself with the changing technology. Tata sky launched TATA SKY + in the year 2006 to cope up with the changing technology and to provide better services to customers.

CUSTOMER SERVICES AND INNOVATION

Leads in introducing new packages & Services Customer queries are sought out at the earliest Rural penetration through ITC E-Choupal and Godrej Aadhar Interactive channels and program guides Innovative Product offering Tata Sky Plus

EXTERNAL FACTOR EVALUATION

Opportunities Weight Tata sky

Score Dish TV

Score Airtel digital TV

Score

Huge untapped market

0.20 3.00 0.60 3.00 0.60 3.00 0.60

Government in favor of industry

0.15 2.00 0.30 2.00 0.30 2.00 0.30

New supplements

0.05 3.00 0.15 2.00 0.10 2.00 0.10

Technology 0.15 3.00 0.45 2.00 0.30 4.00 0.60

Threats

Substitutes 0.15 2.00 0.30 1.00 0.15 2.00 0.30

Low switching cost

0.10 1.00 0.10 2.00 0.20 2.00 0.20

I.T Development

0.10 3.00 0.30 3.00 0.30 3.00 0.30

Lack of possibility of growth

0.10 2.00 0.20 3.00 0.30 2.00 0.20

Total 1.00 2.40 2.25 2.60

EXPLANATION OF EFE MATRIX

OPPORTUNITIES

Huge Untapped Market :

Industry observers, like dish tv believes that the dth market growexponentially to touch 37 million subscribers by 2010. Dth is the emerging industry in india and there is huge market to providethe dth service in india. Around 2500-3000 new subscriber are being added everyday to private dthoperators, whereas only 200-300 are added to dd’s free network. Suggestions are being mooted for the simultaneous release of movies, bothin theaters as well as on dth. There are several remote area in india where as dth services are moresuitable than cable connections.So, there is opportunity to grab untapped market for dth companies.

Govt. In Favors Of Industry:

Govt. Is Considering 74% FDI Capital In The DTH Sector And TaxationPolices Need To Be Friendly And Encouraging. The Growing Subscriber Base Will Definitely Bring Down The Prices Of Stbs(Set Top Box) In The Long Run And Import Duty Free On Stbs (Set Top Box). Government Reduces The License Fee, Which May Be Reduced From 10 PerCent Venues To 6 Per Cent Of The Gross Revenue Of The DTH Service Providers.

For, The Above Points We Can Say It Is Beneficial To New Entrance As WellAs Existing Companies.

New Supplements

LG LCD With New Blue Race Technology Which Can Record A Programe At ATime Of Broadcasting In CD /DVD. This Is Very Helpful To DTH Companies ToProvide Service To Customer. The DTH Service Providers Are Improving TheirTechnology For Their Product And Also Improvement In Their Service To ProvideTo The Customers..

Technology Development And Innovative Services:

Now DTH Companies Are More Concentrating On Their Services And SchemesThem. All The Players Are Always Ready To Innovative Their Services To AttractThe Customers Dish TV And TATA Sky Provide The A-LA-Carte Services MeansSpecial Channel That You Can Add As Per Your Choice. And Also MS ServiceProvides That Called Multi Services. These Both Are Benefit To Customer To SeeTheir Favorite Programs. In Short Time Internet Will Also Available On The DTHService.

Market Development

The Major Factors Which Contribute For The Imminent Growth Are –Economic And Low End Entry Fee, Free Offers, Value-Added Services,Matrimonial Information, Educational Kits Etc.The Players Can Easily Initiate And Develop Their Market If They HaveRequired Capital Availability.

Industry or Lifestyle Trends:

India has A Total Of Almost 90 Million Households Which Have Television.Out Of These, Cable Television And DTH Services Are Accessed In About 45Million (Half).In The Next Few Years, It Is Set to Increase by another 10. This Will ThenMake The Indian Market The World’s Biggest Cable Television Market.The Changing Life Style and Choice May Positively Affect to This Industry.

Implication:

DTH Industry Is At Growth Stage. Industry Has Huge Opportunity And Growth.Government Is More Concentrating On This Industry. As They Reduced ImportDuty On STB And Also Reduced License Fee. Out Of Six Players, Two CompaniesHave Own Cable Subscriber. This Could Be Benefit To Companies. As CompaniesAre More Focusing On Advertising Activity, Awareness About DTH Services IsIncreasing In The Market. There Is Huge Untapped Market. Existing Companies

Threats

Substitutes

Internet Protocol Television (IPTV) Is An Upcoming Threat To DTH, But Still InThe Nascent Stage. CAS, If Regulated And Implemented Properly, Could Pose A Threat To DTHPlayers In Future. IPTV And CAS Is Main Substitute Of DTH Industry. They Are Coming With NewTechnology And When It Implemented Right Way Then They Become ThreatFor DTH Industry.

Low Switching Cost:

There Is Not More Difference Between Package Price Charge By DTH And ItsSubstitute. Service Provides By DTH And Its Substitute Is Almost Same. So One CanTransfer From One To Another.So, Here Switching Cost Is Low For The Customers About The DTHService.

Government Policy/Regulations:

TRAI And Information & Broadcasting Ministry Is The Governing Body Of DTHService Industry. DTH Service Covered Under The Direct To HomeBroadcasting Services (Standards Of Quality Of Service And Redressal OfGrievances) Regulations, 2007.Government Has Imposed Strong Rules Like No Visiting Or Repair AndMaintenance Charges Against DTH Equipment During Warranty Period, TheDTH Operators Cannot Alter The Subscription Package During The First 6Months, Or Till Validity Expiry, Of A Subscriber's Enrollment, Etc.

IT Developments:

The Biggest Threat To The DTH Industry And Also To The Television Industry IsFrom The Growth Of The Internet And Other IT Developments Which May EnableViewers To Enjoy Their Daily Sops, News Etc. Direct Through Internal

Lack Of Possibility Of Growth:

At Present the Industry Is At Growth Stage, Numbers Of Peoples Are StillRemaining To Be Covered By The DTH.

But After Covering the As Many Numbers of the People As It Can, There IsNo Scope for the Industry to Grow Further In the Same MarketEven It Would Be Difficult To Attract the Users from One Service ProviderTo The Other Because Of the Lack of the Difference in the CoreCompetency.

Implication:

DTH Substitutes Will Become Strong By Adopting New Technology Nearby Future.And HITS (Head End In The Sky) New Technology Comes In To Market If ItSuccessful Than The It Is Harmful To DTH Industry. Competitors Are MoreConscious About Their Technological Development And Market Expansion By TheInnovation In Technology As Well As With The Innovative Products. The ClimatePlays Vital Role To Affect The Service. The Improvement In The Technology Affect

To The DTH Industry. Above These Factors Can Become Threat for DTH IndustryIn Future.

Porter’s Five Competitive forces: Direct to Home

Michael Porter’s Five Force Analysis

Threats Of New Entrants

There Are Many Factors Affecting Bargaining Power Of Buyers. Asthey Are Given Below:

Access To Distribution Net-Work:

For This Business Readily Availability Of Service To Target Segment Is Must. ForThat Companies Have To Build Strong Distribution Network. Companies Like AirtelDigital TV , TATA Sky Have Strong Distribution Network. Airtel Digital TV Has Only1day Processing Time. And Tata Sky Has Only 2day Processing Time.43 For NewCompanies Who Don’t Have Strong Distribution Network Or Not Able To MeetOrder In Least Time, This Business Is Very Tough Task For Them. So, It Is High.So, Threat From New Competitor Entry Is Low.

Advertising & Marketing Activity:

For This Starting Of DTH Service, It Is Required To Create Awareness RegardingBrand Name Among The People. For That It Required Strong Advertising Budget.Now A Days, There Is Trend Of Using Brand Ambassador To Promote Brand. TataSky Came Out With Aamir Khan, Dish TV Came Out With Shahrukh Khan , AirtelDigital Came Out With Saif Ali Khan & Kareena Kapoor,Etc. To Create AndMaintain Strong Present In The Market It Requires Efficient And Skilled SalesForce. It’s Required Huge Investment And Expertise To Maintain It And It Is NotFor Everyone’s Cup Of Tea.So, Threat From New Competitor Entry Is Moderate To Low.

Regulation & Norms:

TRAI And Information & Broadcasting Ministry Is The Governing Body Of DTHService Industry. DTH Service Covered Under The Direct To Home BroadcastingServices (Standards Of Quality Of Service And Redresses Of Grievances)Regulations, 2007. Government Has Imposed Strong Rules Like No Visiting OrRepair And Maintenance Charges Against DTH Equipment During WarrantyPeriod, The DTH Operators Cannot Alter The Subscription Package During TheFirst 6 Months, Or Till Validity Expiry, Of A Subscriber's Enrollment, Etc.So, The Threat From New Entry Is Moderate To Low.

Capital Requirement:

There Is Low Capital Requirement In This Industry. It Is Just Rs.10 Cr Which Is

Non-Refundable. And Also Need To Investment In Technology. So, It’s Not EasyFor Any Corporate House. And Also Need To Invest In Technology. It Is High.So, The Threat From New Entry Is Low.

Cost Design:

In This Service Industry Low Cost Design Is An Important Factor. Dish TV Uses TheMulti Dwelling Unit (MDU). It Is Customized Solution For Connecting MultipleHouses Within The Same Multi Storied Building With A Single/ Two Dish AntennaeTo Receive DTH Services. In This Service, Common Dish Installed On The TerraceOf The Multi Storied Building Powers TV Sets In Multiple Homes In The BuildingThrough A Cable, Which Runs Into Each Flat.44 Thus, Dish TV Has Lo Cost Design.But, It’s Not A Cup Of Tea For Each And Every Company To Implement Lo CostDesign.So, The Threat From New Entry Is Moderate To Low.

Industry Growth:

Annual Compounded Growth Rate Of DTH Service Industry Is Around 30%, WhichShows Demand Is Increases Rapidly. Rising Per Capita Income, Changing LifeStyle, Etc. Have Driven Growth. So, Market Is Attractive For The New Players. So, The Threat From New Entry Is High.

Government Policy:

Government Is Providing Good Facilities To DTH Service Industry. As GovernmentReduced Import Duty To Zero Percent From 7.5% On Set Top Box. And AlsoReduced License Fee From 10% To 6% And The CVD (Counter Veiling Duty) IsReduced From 16% To 14%. This Shows Government Provides Friendly Policy ToDTH Service Providers. But, There Is Also Non-Refundable Fee Of Rs.10 Cr. At TheTime Of New Entry.So, The Threat From New Entry Is Moderate To High.

Summary:

Access To Distribution Is High So Threats Of New Entrants Are Low. Advertising &Marketing Activity Is Also High So Threats Of New Entrants Are Low. Regulations& Norms Are Strict So Threats Of New Entrants Are Low. There Is Low CapitalRequirement So Threats Of New Entrants Are High. In Respect Of The Low CostDesign Threats Of New Entrants Is Moderate To Low. There Is Low Level OfSwitching Cost So Threats Of New Entrants Are High. The Buyer Demand IsGrowing Rapidly So Threats Of New Entrants Are High. And Government Policy IsSomewhat Friendly So Threats Of New Entrants Are Moderate To High.The Overall Threats Of New Entrants Is, Moderate To Low

Threats Of Substitutes

Determinants Of Substitution Threat

In This Industry Mainly Four Type Of Substitute Available And They Are CloselyRelated To Dth Industry. Four Substitutes Are: IPTV, Cable Terrestrial, TelevisionAnd CAS.

IPTV Provide Services Have Been Very Attractive Levels With TheSubscription Charges Depending On City And Provide Set Up Box FreeWith Refundable Security Deposits. And They Provide Unique Features.IPTV Is Expected To Take Some Time To Catch Up S Infrastructure ToCover Wider Scale.

As We Know Cable TV Have Huge Market. 73 Million Households HaveCable Connection.

Doordharshan Is World‘S Largest Broadcast With Over 1400 TerrestrialTelevision Transmitters. And The Reach Provided By This Route IsPhenomenal With Provided Coving 88% Geographic Area Of India.

Introduction Of CAS By The Government In Specified Are Since 2007 AndThis Also Put Push Towards Digitization Of Cable. If Regulated AndImplemented Properly Could Pose A Threat To DTH Player In Future.

New Technology Accepted By TRAI Is Headend In The Sky (HITS). DTHHave End User Of Consumer, The HITS End User Is A Cable Operator. So, Threats From Substitutes Are Moderate To High.

Costs Of Switching To Substitutes:

Package Price Of Services Is Not More Different From Substitute To Substitute. SoBuyer Can Easily Switch From One To Another. They Charge Low Price So ThatCustomer Do Not Incur Big Cost. They Can Transfer To Substitute

IPTV Provide Subscription Charges Between Rs. 100 To Rs. 200 Per Month. AndDTH Services Have Lowest Price Rs. 90. (Starting Price) And Cable ProvideServices Starts With Rs. 250. So We Can Say Here No Huge Difference.So Threat From Substitute Is HIGH.

Availability Of Substitute Products:

HITS, The New Technology Is Being Looked At Positive By TRAI.HITS Has The EndNumber Of Cable Operator Who Delivers The Signals To The End No. Of

Consumers.

Mobile Television Is Also Coming Soon In The Market. DOORDHARSHAN Launched Its Mobile TV Pilot With Handset Major Nokia AndSamsung On DVB-H Platform.

LG LCD With New Blue Race Technology Which Can Record A ProgramAt A Time Of Broadcasting In CD /DVD. Its Affects To Videocon LCDSales.

Here Threats From Substitutes Products Are Moderate To High BecauseTechnology Used By Substitute.

Threats Of Substitutes

Summary:Threat From Substitute Is Moderate To High Because Substitutes Have Power OnMarket And Also New Technology Is Positively Taken By Government. There Is NoHuge Difference In Price. So, Cost Of Switching Cost Is Low. Because Of It ThreatIs High. And Availability Of Substitute Is Moderate To High In Market. So, Threat IsAlso Moderate To High.The Overall Threat Of Substitutes Is Moderate To HigH

Bargaining Power Of Suppliers

DTH Industry Relies On Three Major Suppliers:

1. Customer Premise Equipment (CPE)

2. Comprising Of The Satellite Dish

3. Set-Top-Box With The Necessary Access Card.

Satellite:

The Ku-Band Transponders Are In The Orbiting Satellites And Content Are FewLarger Suppliers. With India Set To Overtake Japan As Asia’s Largest DTH Market.But Government Launches INSAT 4A, India’s Most Powerful CommunicationSatellite. It Will Provide Direct-To-Home (DTH) Telecasts From Early 2006.The Ku Band Transponder Is Generally Provided By Astrix, The Commercial WingOf ISRO Either Through Its Own Satellites Or By Leasing Transponders FromSuppliers. With Only Two Domestic Satellite Launches Between 2007 And 2010An D Increasing DTH Players, Astrix Is In A Better Position To Use DTH. Also TheCrash Of INSAT 4C And NSS-8 Has Worsened The Situation Of DTH Players. AsThere Is Not Much Of Regulation Particularly In Terms Of Channel Pricing,Acquiring Content From The Broadcasters Is Also Difficult. DTH Vendors Are AtThe Mercy Of The Broadcasters.45

Indian DTH Service Provider Can Take Initiative Of Indian Satellite For Large AreaCoverage From India As Well As Take Home Base Secure Service Satellite.

Set-Top Box:

As Per A STB Equipment Provider Is Concern Indian Govt. Give An Advantage OfCustoms Duty On Set-Top Box Was Reduced To NIL In The Budget 2006,Whereas, Inputs Attract Customs Duty Of 5/12.5%.Most DTH Players Import Their Set-Top Boxes (STB) And Sell Their Products At ADiscounted Price To Consumers In A Bid To Grab Larger Volumes. A MPEG2 STBCould Cost A Company Between $32-50 And Its Consumer Acquisition Cost IsAround Rs 2,600-5,000 Per STB For The DTH Players. Similarly, MPEG4 STB CouldCost A Firm Between $50-62 Taking The Subscriber Acquisition Cost For A DTHPlayer Up To Rs 5,600 Per Set Top Box. So As A Service Provider Company CanImport STB Like Tatasky Import Sky Broadcastings STB From USA For Low CostAnd High Quality Service?46

Here The Production Of DTH Instruments, Cables And Other Materials Is VeryCostly For The DTH Service Provider Companies So They Have To Be DependentOn The Suppliers Of This Equipment. And Because Of This Reason TheirBargaining Power Is High.

There Are Some Points Which Are Affecting Bargaining Power Of Supplier:

Backward Integration:

Industry Players Can Get Qualitative Raw Material At Affordable Price. So, TheyCan Think To Do Backward Integration In Terms Of Set Top Box, Etc. And Also AllThe Corporate House Can Do This.So, Bargaining Power Of Supplier Is Low.

Supplier Switching Cost:

The Decision Of Switch From One Supplier To Another Supplier Is Very Critical ToAny Manufacturer. Because At That Time They Have To Check The Cost OfSwitching From One Supplier To Another. But In This Industry It Is Very Low.There Are Many Players Who Provide Dish And Set Top Box In The World.So, Bargaining Power Of Supplier Is Low.

Forward Integration:

Supplier Of Raw Material Providers Can’t Easily Entered In This Industry. BecauseThere Is Need Of Huge Investment Required While Starting The Business In ThisIndustry. So, Bargaining Power Of Supplier Is Moderate To Low.

Summary:

Bargaining Power Of Supplier Is Low Because There Is A Possibility Of BackwardIntegration. Inter Firm Rivalry Is High Because Market Share Of The Players HaveNot More Differences. Supplier Switching Cost Is Low So Bargaining Power OfSupplier Is Also Low. And The Determinants On Supply Power Are Not So Much.So, Bargaining Power Of Supplier Is Moderate To Low.The Overall Bargaining Power Of Suppliers Is Low.

Bargaining Power Of Buyers

There Are Many Factors Affecting Bargaining Power Of Buyers. As They Are GivenBelow:

Buyer Switching Costs:

The Cost Of Service In DTH Service Industry Is Not That Much High WhatConsumer Cannot Afford To Change. So In This Industry Consumer Can EasilyDivert From One Brand To Another. There Are Several Reasons To Change TheBrand Like Price Level, Quality Of Set Top Box, Etc. In That Case Service ProviderCan’t Take Any Strong Action To Make Consumer Brand Loyal Each & EveryPlayers Are Provide DTH Service At Near To Same Price. That’s Why ConsumerCan Easily Change The Brands. Due To Low Switching Cost From One Brand To Another, TheBargaining Power Of Buyer Is Moderate To High.

Brand Awareness:

Customers Are Becoming Literate And Take Interest To Get Aware About DifferentBrands And Their Services Which Are Available In The Market. In DTH ServiceIndustry There Are No More Players But They Provide Many Different Services.Mostly People Are Aware About Brands And Services, That’s Why They Can EasilyFind Out Which Product Is Good In Price, Quality Of Services, Etc. In This IndustryMostly Each & Every Service Providers Are Concentrating On High Advertising ToIncrease Awareness Of Their Brands And Services.Due To High Awareness Of Different Brands And Services, TheBargaining Power Of Buyer Is Moderate To High.

Availability Of Substitute Products:

In Recent Time We Can Easily Find Substitute Product In This Industry. SubstituteProducts Are Cable TV & IP TV. Customer Can Easily Get Both Of These ProductsWith Minimum Charges. Due To Easily Availability Of Substitute Products, TheBargaining Power Of Buyer Is High.

Buyers’ Purchase Frequency:

DTH Service Is Such Kind Of Products That Consumers Cannot Purchase It

Frequently. But, Consumer Has To Do Recharge Monthly. They Have To BuyMonthly Or Yearly Packages. Because Of These Reasons, Purchase Frequency IsHigh.Due To This, Bargaining Power Of Buyer Is Moderate To High.

Innovative Services:

In DTH Service Industry, Service Provider Every Time Launch Different ServicesVia Different Types Of Recharges. Consumers Can Easily Get Recharge AndMonthly As Per Their Need.Example: Reliance Big TV Provides 10 Different Types Of Monthly Pack.Due To This, Bargaining Power Of Buyer Is Moderate To High.

TRAI Rules

The Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007, were issued on 31st August, 2007. These regulations were issued to lay down the standards of quality of direct to home services and to protect the interests of direct to home subscribers. At the time of issue of these regulations, only two direct to home operators apart from Doordarshan were providing direct to home services in the country. Since then, three new direct to home operators have started commercial operations. With the evolution of the direct to home segment and the increase in the number of direct to home subscribers, new issues relating to quality of direct to home service have arisen. In order to address these issues the Authority has decided to amend the Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007. Rationale for making amendment to the Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007: The Authority noted that a large number of complaints have been received from the Direct to Home subscribers regarding dropping of channels from subscription packages offered by DTH operators. In case of subscription to DTH services, a subscriber subscribes to the service on the basis of specific channels included in the subscription package. If any channel is taken out of a subscription package and it is replaced by another channel then the DTH subscriber may be getting the same number of channels as earlier, but will be deprived of viewing the particular channel which has been removed. In case the channel which is removed is offered to the subscriber as an add-on package then the subscriber ends up paying more for viewing that channel which was earlier included in his subscription package. This subverts the tariff protection provided to DTH subscribers by Regulation 9 of the Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007. This calls for DTH subscribers to know about the following new rules.

1. No visiting or repair and maintenance charges of DTH equipment during warranty period. TRAI: The DTH operators have been prohibited from charging any fee towards visiting charges or repair and maintenance charges of DTH Consumer Premises Equipment during the period of warranty for such DTH Consumer Premises Equipment acquired on outright purchase basis.

2. The DTH operators cannot alter the subscription package during the first 6 months, or till validity expiry, of a subscriber's enrollment. TRAI: The DTH operators have been prohibited from changing the composition of their subscription packages during first six months of enrolment to the subscription package or during the period of validity of a prepaid subscription package, whichever is longer.

3. In case a channel is removed from a subscription package in the first 6 months of enrollment, the DTH operator must reduce the price proportionately, or replace the removed channel with one of the same genre and language. TRAI: The DTH operators have been mandated to proportionately reduce the subscription charges for a package from which any channel is removed for first six months of enrolment or during the period of validity of a prepaid

subscription package, whichever is longer or to replace the channel with a channel of same genre and language.

4. The option of choosing the package with reduced charges or the package with replaced channel has been given to the subscriber.

5. In case a removed channel needs to be replaced, the replacement option will be in the hands of the DTH operator. TRAI: Option to select the channel of the same genre and language in a subscription package to replace a channel which has become unavailable on the DTH platform, has been given to the DTH operator.

6. Your DTH operator needs to give a prior notice of fifteen days to you before changing the composition of any subscription package.

7. Subscribers are allowed to request their DTH operator to suspend their services for up to 3 months. However, this suspension period should not comprise the same calendar month. TRAI: DTH operators have been mandated to entertain requests of DTH subscribers for suspension of services if requested period of suspension does not exceed three calendar months and does not comprise part of a calendar month The above rules are compulsory for DTH operators to adhere to.

GovernmentRules For Licensing:

1. No. Of Licenses Issued: There Will Be No Restrictions On The Number OfDTH Service Provider To Issue The License, The License Issued By Any NewService Provider Who Fulfils The Terms And Conditions Which AreRegulated By TRAI (Telecom Regularity Authority Of India).a. TRAI Also Regulated The Security And Technical Clearances ServiceProvide To The DTH Service Holders By The Appropriate AuthoritiesOf The Government.

2. Validity Of License: Wireless Planning And Coordination Wing Of MinistryOf Communication, The Rules And Regulation Of The Government TheLicense Provide To The DTH Service Provider Which Is Valid Up To 10 YearsFrom The Date Of Issue Of Wireless Operational License.

3. DTH License Fee Reduction: The Ministry’s Move To Reduce The LicenseFee For DTH Players From 10% Of Gross Revenue To 6% May Soon BearFruition. Secretary Singh Said The Ministry May Be Able To Announce ThisSoon. This Process Has Been On For Nearly A Year. Due To The MultiplicityOf Agencies—Telecom Regulator TRAI, I&B Ministry And The Finance

Ministry Are Involved In This Decision—The File Seems To Have BeenMoving Back And Forth For Nearly An Entire Year. One DTH Industry Source,Who Has Followed The Policy Change Closely, Told Us That The First TimeAround, The Finance Ministry Had Some Reservations About The ChangeAfter I&B Ministry And TRAI Had Approved The Change. So The Ministry HadTo Make Some Amendments And Get TRAI Recommendation Once AgainAnd The File Has Gone Back Again To The Finance Ministry. Singh’sReiteration Of The Decision May Be An Indication That The Ministry IsExpecting The Finance Ministry’s Nod Soon.

4. Laws For The Termination: Either Party Has A Right To Terminate ThisAgreement On Immediate Written Notice To The Other In The Event Of:

5. Material Breach Of This Agreement By The Other Party Which Has Not BeenCured Within Thirty (30) Days Of Being Required In Writing To Do So; TheBankruptcy, Insolvency Or Appointment Of Receiver Over The Assets OfThe Other Party;

6. The DTH License Or Any Other Material License Necessary For DTH Co. ToOperate Its DTH Service Being Revoked At Anytime Other Than Due To TheFault Of DTH Co.

7. GBN Shall Have The Right To Terminate This Agreement On Written NoticeTo DTH Co. If DTH Co. Breaches Any Of The Anti Piracy Requirements AndFails To Cure Such Breach Within Two (2) Days Of Being Required In WritingTo Do So, Or GBN Discontinues CNN-IBN With Respect To All Distributors InThe Territory And Provides DTH Co. With At Least Ninety (90) Days PriorWritten Notice.a. DTH Co. Shall Have The Right To Terminate This Agreement OnWritten Notice To GBN If DTH Co. Discontinues Its DTH Business AndProvides At Least Ninety (90) Days Prior Written Notice.

8. Termination Of This Agreement Shall Not Affect Any Continuing ObligationsOf Each Of The Parties, Including Any Rights And Obligations Relating ToIndemnification And Audit.

Trade Restrictions And TariffsRationale For Making Amendment To The Direct To HomeBroadcasting Services (Standards Of Quality Of Service And RedressalOf Grievances) Regulations, 2007:

1. No Visiting Or Repair And Maintenance Charges Of DTH Equipment DuringWarranty Period. TRAI: The DTH Operators Have Been Prohibited FromCharging Any Fee Towards Visiting Charges Or Repair And MaintenanceCharges Of DTH Consumer Premises Equipment During The Period Of

Warranty For Such DTH Consumer Premises Equipment Acquired OnOutright Purchase Basis.

2. The DTH Operators Cannot Alter The Subscription Package During The First6 Months, Or Till Validity Expiry, Of A Subscriber's Enrollment. TRAI: TheDTH Operators Have Been Prohibited From Changing The Composition OfTheir Subscription Packages During First Six Months Of Enrolment To TheSubscription Package Or During The Period Of Validity Of A PrepaidSubscription Package, Whichever Is Longer.

3. In Case A Channel Is Removed From A Subscription Package In The First 6Months Of Enrollment, The DTH Operator Must Reduce The PriceProportionately, Or Replace The Removed Channel With One Of The SameGenre And Language. TRAI: The DTH Operators Have Been Mandated ToProportionately Reduce The Subscription Charges For A Package FromWhich Any Channel Is Removed For First Six Months Of Enrolment OrDuring The Period Of Validity Of A Prepaid Subscription Package, WhicheverIs Longer Or To Replace The Channel With A Channel Of Same Genre AndLanguage.

4. The Option Of Choosing The Package With Reduced Charges Or ThePackage With Replaced Channel Has Been Given To The Subscriber.

5. In Case A Removed Channel Needs To Be Replaced, The ReplacementOption Will Be In The Hands Of The DTH Operator. TRAI: Option To SelectThe Channel Of The Same Genre And Language In A Subscription PackageTo Replace A Channel Which Has Become Unavailable On The DTHPlatform, Has Been Given To The DTH Operator.

6. Your DTH Operator Needs To Give A Prior Notice Of Fifteen Days To YouBefore Changing The Composition Of Any Subscription Package.

7. Subscribers Are Allowed To Request Their DTH Operator To Suspend TheirServices

8. For Up To 3 Months. However, This Suspension Period Should Not CompriseThe Same Calendar Month. TRAI: DTH Operators Have Been Mandated ToEntertain Requests Of DTH Subscribers For Suspension Of Services IfRequested Period Of Suspension Does Not Exceed Three Calendar MonthsAnd Does Not Comprise Part Of A Calendar Month.a. The Above Rules Are Compulsory For DTH Operators To Adhere To.i. The Licensing Norms Of This Industry Is Not So Much Strict.Because Of This Norms Provide Easy Entry And Exit To DTHPlayers. But, The Service Norms Are Somewhat Strict.Companies Have To Give Good Services To Their CustomersEspecially To Set Top Box. They Don’t Take Any Repairing

Chargers During Warranty Periods. DTH Providers Also Can’tChange The Composition Of Subscription Of Customer’sSchemes Till The Expiry Date Of Their Enrolment.

Foreign Direct Investment:The Ministry Of Information And Broadcasting (I&B) Reiterated That It Is WorkingTowards Raising The FDI Cap In The Media Distribution Platforms Like Direct-To-Home (DTH) To 74% From The Current 49%. “We Are Considering The Case OfRaising The FDI Ceiling In DTH To 74%”- Said By Uday Verma, AdditionalSecretary, At The IDNS Conference.By The FDI (Foreign Direct Investment), The Quality Of Domestic InstitutionalEnvironment Has Been Improved. An Effective Education And Training SystemUpgrades The Skill Level Of The Workforce And Improves The Socio-PoliticalClimate In The Country. FDI Includes Infrastructure Availability, Quality Of TheBanking System, Market Size, Repatriation Of Profits, Characteristics Of TradeAnd Competition Policy Consistency And Predictability. Ministry Of Information &Broadcasting Has Requested The Authority To Give Its Recommendations OnForeign Investment Limits For Various Segments Of Broadcasting Sector. ThisConsultation Paper Raises Issues Relating To Foreign Investment Limits ForBroadcasting Sector. The Telecom Regulatory Authority Of India (TRAI) SolicitsThe Views Of All The Stakeholders On The Issues Raised In The ConsultationPaper.

Government StabilityThe Era Of Coalition Politics Had Arrived, And It May Be Some Time Before ASingle Party Government Comes Into Power. The Regionalization Of Indian PoliticsHas Also Led To State-Level Innovation And Greater Competition Between TheState Governments To Attract Foreign Capital.There Is Change In The Political Party And Their Rules For The Particular CompanyAnd Its Service Provides Style. Instability In Rules And Regulation By TheGovernment As A Ruling Party, As Evidenced In The Pattern Of Shifting AlliancesAnd Collapsing Governments That Has Marked Recent Policies.

SIXTH FORCE

The sixth force in the Dth Industry or the complimentor to the DTH industry are the television channels . without the support of the broadcasting channels it is impossible to survive for the DTH industry. Viewing the channels is broadly all about what the services of DTH are.

Broad casting rights of the channels or particular shows are provided by the government. Dth industry had to depend on the broadcaster for the broadcasting of the channels.

Largest number of television channels is displayed by DISH TV. All the competitors of the DTH firms are trying to get the broadcasting rights to view more and more channels.

Television sets are the other complimentary good for DTH industry. Now the TV sets are coming with advanced technology. For example Plasma TV, LCD TV etc.Consumer electronics and TV manufacturers association (CETMA)Television sales clocked 21 per cent growth in last year year with 4.6 lakh set sales against 3.8 lakh in year before. The growth in sales of TV sets would definitely lead to higher sales of DTH.

CONCLUSION

GENERAL PERCEPTION

Among all the DTH firms dish tv is highest rated as it is the oldest player in the market and acquires highest market share. factors like advertisement , brand reputation , pricing , technology etc are also responsible to make dish tv no 1 n grab the market.

TATA SKY is giving tough competition to the dish tv. To maintain no 1 position dish tv should update itself technologically.

AIRTEL DIGITAL TV ranks last due to many reasons, Late entrant – Most of the market has already been captured by other players. The prices are high.

From the OT Analysis, the Opportunity for the Players to Enter As Well As ToEnvelop the Market Because the Market Is Untapped and the Policies From TheGovernment Are Much More Liberal for the DTH Service Providers Provide To The Customers. So, It Is the Win-Win Situation for Both the Parties Like, DTH Service Providers and Customers. There Are Also Some Threats for the DTH Service Providers by the Improvements in the Technology, Climate Condition, Substitutes Also Affect To the Rivals of the Industry Because the cable operator covered the market.

BIBLIOGRAPHY

www.financialexpress.com www.bigtv.co.in www.tatasky.com www.indiabroadband.com www.sundirect.in www.indiatelevision.com www.moneycontrol.com www.docstoc.com www.dishtv.in