Financial Express (India)
© Indian Express Pty. Ltd.
Statistics are said to reveal the suggestive and hide the vital. A study has found that nearly a third of the subscribers of the ‘fast growing’ six-player DTH industry are inactive.
According to industry estimates, the inactive users will contribute around Rs 1,350 crore to the over Rs 5,300 crore loss that the DTH players will make in the current fiscal.
“The inactive DTH subscribers, called the churn in the DTH industry, are a major cause of worry for the operators due to mounting financial losses even as the gross numbers continue to shoot up,” says MPA executive director Vivek Couto.
The inactive subscribers aggregating nearly 10 million have not renewed their subscription after the end of the promotional offer period. Most DTH operators provide a package of television channels free for 3-6 months while selling the set-top box.
Says Dish TV MD Jawahar Goel: “Churn is there but it is not that big. In the US and the UK markets too the average churn or inactive subscribers are 12-15% of the gross subscribers. As the DTH numbers grow to become more than half of the 90 million cable homes, churn will minimise.”
What makes it worse for the industry is that the DTH companies have invested over Rs 15,000 crore and provide set-top boxes at heavily subsidised prices.
“Managing the churn is a big challenge for the industry as customer lost is equal to investments lost. However, it is not a worry for us. But it is likely to increase because of availability of subsidised boxes in a non-contracted environment,” says Tata Sky CEO Harit Nagpal.
Overall, 68% customers are still subscribing to DTH services.
Old-hands Dish TV and Tata Sky lead the pack with an average 80% active subscribers, while the new entrants Videocon D2H, Reliance Big TV, Airtel Digital TV and Sun Direct TV together have only around 62% active subscribers.
Among the new players, Bharti Airtel enjoys the highest active subscriber base of 73%, the third-highest overall, reveals an analysis of data complied by Media Partners Asia (MPA), a Hong Kong-based international media research agency along with updates from the DTH industry.
So far, the DTH subscriber numbers are not provided by the sector regulator Telecom Regulatory Authority of India (Trai) as private DTH operators do not share their numbers with it.
Dish TV numbers are in the public domain as it is the only listed DTH firm among the six.
The other five — Tata Sky (a Star-Tata joint venture), Sun Direct (Sun TV), Digital TV (Bharti Airtel), Big TV (Reliance ADAG) and D2H (Videocon) – are privately held companies.
As a result of nearly 10 million inactive subscribers, some of the private DTH operators have stopped sharing their subscriber numbers, sources revealed. DTH operators say customers switch to cable TV as they can provide only the permitted channels whereas a numbers of illegal or unauthorised channels are available on the cable platform. Goel expects the churn to subside during the World Cup cricket as more people opt for a DTH connection. In order to encourage the inactive subscribers to renew their packages, the DTH players have been launching new schemes and products. Tata Sky recently introduced Tata Sky HD-plus services at Rs 3,999 where the box will record 600 hours of content and also receive HD signals.