Bharti Airtel, RCom take rivalry to DTH television

Bharti Airtel, RCom take rivalry to DTH television
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First Published: Wed, Aug 20 2008. 11 05 PM IST
Updated: Thu, Aug 21 2008. 12 19 PM IST
New Delhi: The battle between Bharti Airtel Ltd and Reliance Communications Ltd (RCom), India’s two largest mobile phone firms by subscribers, will soon extend to the direct-to-home (DTH) satellite television turf, a market analysts say will almost double to 25 million households by 2012.
Both firms hope to leverage their large customer base (about 125 million combined), a nationwide retail presence, experience in managing infrastructure and telecom customer service in their ambitious drive into the new business.
These advantages will only somewhat smoothen their entry into an industry characterized by high customer acquisition and marketing costs that have saddled current market leaders with losses, some analysts say.
Reliance Anil Dhirubhai Ambani Group (R-Adag), which runs RCom, sees “obvious bundling opportunities” in DTH, said Arun Kapoor, chief executive officer of Reliance Big TV, as the DTH operator will be known.
“We have a 50 million subscribers of our telecom service, five million Reliance Energy Ltd consumers, who share a relationship with the group and get a bill every month... four million shareholders of R-Adag, and two million PCO partners,” he told reporters here on Wednesday. PCOs, short for public call operators, are phone kiosks.
Reliance Big TV is looking at cornering a 40% share of monthly additions to the DTH market. About half a million DTH customers are added a month in India presently.
The group has also announced plans to launch a broadcast network of about 20 channels through its entertainment arm, Reliance Big Entertainment Pvt. Ltd, and has interests in film production, distribution, FM radio, Internet and movie rentals.
Bigger rival Bharti Airtel has said it will launch its DTH services under the Airtel brand in the coming weeks.
In an interview earlier this month, Atul Bindal, president of Bharti Airtel, said the firm would be leveraging its one million retail outlets that also offer mobile phone recharge coupons across the country.
“We entered the consumers’ home with voice, then it was data and broadband, now we want to give them a ‘one knock at the door experience’ with one bill and one service provider,” he said.
His firm’s billing system serving some 75 million customers gives it an edge over stand-alone DTH operators, he added.
The three existing DTH players have synergies with broadcast groups, and one—Tata Sky Ltd, a joint venture between the Tata Group and Rupert Murdoch’s News Corp.—has a telecom affiliate in Tata Teleservices Ltd. Dish TV India Ltd is part of the Essel Group, which also runs the Zee network of channels. Sun Direct TV Pvt. Ltd is a joint venture between Chennai-based broadcaster Sun TV Network Ltd and Malaysia’s South Asia Entertainment Holdings Ltd.
A phone firm has advantages in distribution “but the most important challenge, which is the cost of subsidizing the set-top box, is the same for everyone”, said Smita Jha, an associate director at the media practice of consultant PricewaterhouseCoopers India, adding that conversions from their phone customer base to DTH users would be key.
Revenue from television distribution is estimated to grow to Rs38,000 crore by 2012 and DTH will have a sizeable share of it, according to a report by industry body Federation of Indian Chambers of Commerce and Industry and PricewaterhouseCoopers.
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First Published: Wed, Aug 20 2008. 11 05 PM IST
More Topics: DTH | BIG TV | Bharti Airtel | RCom | Telecom sector |