Business News/ Industry / Media/  RCom to shut down DTH business

New Delhi: Anil Ambani-led Reliance Communications has decided to shut down its direct-to-home (DTH) business under the brand Reliance Digital TV with effect from 18 November, according to an advertisement in a Malayalam publication.

The company, which started in 2008, cited expiry of its DTH licence as the reason behind the shutdown in the ad. “Since our licence is expiring, we will be shutting down our DTH service across India. We urge subscribers to make alternative arrangements to continue to watch their favourite channels," the advertisement said.

Responding to an emailed query, Reliance Communications confirmed the development and said that the company is working with three other DTH players to migrate its customers. “DTH operations are a non-core area for RCom (Reliance Communications), and we are currently working with three leading DTH operators for seamless migration of our customers, for them to enjoy uninterrupted services. A new scheme without any additional costs will be communicated to our customers in the next few days," a company spokesperson said.

Currently, there are six private DTH firms—Zee group-owned Dish TV India Ltd, Reliance Digital Ltd, Tata Sky Ltd, Videocon d2h Ltd, Sun Direct TV Pvt. Ltd and Bharti Telemedia Ltd. In addition to these, state broadcaster Doordarshan also runs a DTH platform for free-to-air channels called DD Free Dish.

Reliance Digital TV is the smallest player with a market share of 2% in the 65.31 million DTH subscriber market (as of June 2017), according to a report released by the Telecom Regulatory Authority of India.

Dish TV is currently the market leader with a 24% share, followed by Tata Sky with a 23% market share.

“Reliance has been debt-ridden and trying to get rid of its loss-making businesses. It also tried to merge with Sun Direct but it didn’t work out. In an industry where top three players control the market and there are talks of Reliance Jio entering the business with its predatory pricing strategy, it makes perfect sense for such a small player to shut the business altogether," said a media industry expert, who did not want to be named.

Reliance’s move comes a year after the initiation of a consolidation process in the DTH industry with Dish TV announcing the merger of its operations with Videocon d2h in November 2016.

Once formed, the new company will be called Dish TV Videocon Ltd. Dish TV will own 55% and Videocon 45% stake in the new company. The merger is pending before the information and broadcasting ministry.

According to a 2013 report on the Indian DTH market by Hong Kong-based research firm Media Partners Asia, revenues are expected to touch $3.9 billion in 2017 and $5.3 billion by 2020, up from $1.5 billion in 2012.

Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.

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Updated: 26 Oct 2017, 12:57 AM IST
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