Tariff hike to help DTH operators log 6-8% revenue growth in FY24: Report
However, net subscriber addition to DTH sector is expected to remain flattish over the medium term, amid increasing uptake of digital and Doordarshan Free Dish platforms, and stiff competition from cable operators.
PremiumNew Delhi: The latest tariff hike by India’s direct-to-home (DTH) operators are likely to help them log a 6-8% growth in revenue to ₹19,500 crore in fiscal 2024, according to analytics firm Crisil. This would account for around 95% of the pre-pandemic fiscal 2020 levels.
However, net subscriber growth is anticipated to remain stagnant in the medium term due to the rising popularity of digital platforms, Doordarshan Free Dish, and competition from cable providers.
The ongoing recovery in the DTH sector comes after the amended New Tariff Order implementation on 1 February, 2023, leading to tariff hikes. Over the past three fiscals, there was regulatory constraint on hiking tariff even as subscription declined.
“Consequently, we expect the sector’s monthly average revenue per user (ARPU) to grow 7-8% to ₹300-305 this fiscal. This would the beam up the sector’s revenue, although it will still be 5% short of fiscal 2020 levels. Over the next few years, the sector should continue to grow moderately, driven by expectation of further revision in tariffs. That said, alternative platforms available to consumers for watching content may keep net subscriber additions flattish," Naveen Vaidyanathan, director, Crisil Ratings said in a statement.
While DTH operators have always been competing with cable distributors, the proliferation of digital or over-the-top (OTT) platforms and increased broadband connectivity are persuading a portion of affluent subscribers to cut the cord, or switch to digital and connected platforms from linear television. Besides OTT, there has been an increase in traction for Free Dish because of wider and free content availability with just one-time payment for set-top boxes.
“But pay TV DTH subscription is unlikely to be impacted much by rising demand for Free Dish, which is largely meant for rural consumers with low income. To be sure, a third of Indian households don’t have a TV connection, and we believe this underserved market will drive the growth of Free Dish. Moreover, we don’t see large-scale cord-cutting scuppering the DTH model anytime soon because the average cost of prime OTT subscription, including broadband, is still more than twice compared with the average subscription cost of linear TV," Rounak Agarwal, team leader, Crisil Ratings said in a statement.
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