Monday, July 13, 2015

OTT services Add-on to existing TV packages

DTH space has been benefiting from price discipline and quasi consolidation. Though there are six players, effectively it is only a four-player market. Also the DTH industry has seen lot of price discipline over the last three years, evident by the improvement of industry ARPUs. Company sees ARPU improving by at least 10pc this fiscal

Over The Top (OTT) will be an add-on: Not seeing much of threat from entry of OTT players/services as providing content over broadband is not cheap and will be 5x- 10x more expensive versus traditional pay TV services. No doubts these services will have demand but will be restricted to markets with reasonable broadband infrastructure. However the demand is likely to be an add-on service

Costs for High Definition (HD) boxes have come down sharply and the DTH industry is focussing on HD segment (while cable is not). Declining costs allow Videocon d2h to deploy HD boxes at the time of acquiring subscribers with scope to offer HD services at a later stage. The HD base for the company is c10% of the total subscriber base and 30% of net addition for the company in FY15

100 Mn Opportunity 75 new homes are yet to be digitised in Phase III and IV of digitisation. In addition 25m new homes will be added in the next four years. Unlike Phase I which was only 4 metro towns and Phase II which was 38 cities, Phase III is about 38m households spread across 700 urban towns. This scattered nature of Phase III favours DTH