Chennai: The direct-to-home (DTH) television service promoted by Chennai-based Sun TV Network Ltd founder Kalanidhi Maran, Sun Direct TV Pvt. Ltd will invest at least Rs3,000 crore over three years beginning fiscal 2010 as part of an ambitious expansion drive, a senior company official said.
The investment is part of a target to add 2 million subscribers annually over that period; Sun Direct currently has more than 1.5 million subscribers, with a 3 million target for the current fiscal.
“We have estimated our investments to be in the range of around Rs1,000 crore per year but it would depend on the economic conditions” such as import costs, said Tony D’Silva, chief operating officer of Sun Direct.
The rupee has fallen by a fifth against the dollar this year, making imports more expensive. Sun Direct imports most of its requirements, such as set-top boxes required for DTH service installations. “So, these factors would play an important role in determining our investment plans,” D’Silva added.
Sun Direct, which launched in December 2007, is an 80:20 joint venture between the Kalanidhi Maran family and Astro Group of Malaysia, and was only the third company to enter the segment after Tata Sky Ltd, an 80:20 joint venture between the Tata Group and Star Group, and Dish TV India Ltd, an Essel Group company.
The firm hopes to break even in about five-and-a-half years, D’Silva said. This year, it is spending around Rs150 crore on marketing and branding.
Reliance Big TV, part of the Reliance-Anil Dhirubhai Ambani Group, and Airtel Digital TV, launched by Bharti Airtel Ltd, the country’s largest mobile phone service firm by subscriber base, have also launched DTH services.
At the end of fiscal 2008, the gross subscriber base of Dish TV was 3 million, while Tata Sky had around 2 million subscribers as of May 2008. Big TV in October announced that it had acquired 500,000 subscribers since its launch two months ago. Airtel entered the DTH market only about a month ago.
Direct DD Plus, a free-to-air DTH service launched in 2004 by public broadcaster Prasar Bharti, has an estimated subscriber base of about 6 million, said a Prasar Bharti official who didn’t want to be named. The figure is based on the sale of set-top boxes and no survey has been done, this official said.
Sun Direct launched its service at a much lower monthly fee, which is still low at Rs75, forcing Dish TV and Tata Sky to revise their own prices.