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Competition to affect Arpus in DTH space
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Mumbai: Though direct-to-home (DTH) players are positive on garnering better average revenue per user (Arpu) in 2010, a Ficci-KPMG study suggests that ARPUs in 2010 will remain flat due to excessive competition, not only from other players but from other platforms as well. Currently, the industry Arpu is Rs 150, same as it was in 2009.

The flat trend can be compensated by the growing subscriber base for the players. Currently, the DTH market is 22 million subscribers-strong and is expected to touch 43 million by 2014.

For instance, Tata Sky, a joint venture between the Tata Group and Star, is pushing value-added services to maintain its leadership in Arpus. The company is shifting as many existing base subscribers as possible to the value-added service (VAS) so that ARPUs don't suffer. It has launched interactive service like active learning, active games and active mall, which has helped the company notch up its subscriber base. Of the 22 million strong market, Tata Sky has 5 million subscribers.

Tata Sky chief marketing officer Vikram Mehra said, "Currently, our ARPUs are over Rs 200 and we will be launching a slew of interactive services over the next few months. Our interactive services, which come at an extra cost to the subscribers, have been gaining popularity among viewers."

Even for Airtel Digital TV, increasing subscriber base is crucial. Bharti Airtel director & CEO (DTH) Ajai Puri said VAS will be the key driver. "We are working on a platform wherein we can integrate television, mobiles and the internet to provide services across the value chain," Puri said. The company is already present in each of these segments individually, as it offers broadband services and DTH services through Airtel Digital TV, in addition to its mobile connectivity. The company claims to have a 25% market share in the business.

Analysts say that DTH players will be able to justify their existence either in terms of quality or price. A silver pack at Dish TV is priced at Rs 125 and offers 160 plus channels and Tata Sky's super hit pack offers 65 channel at Rs 160. Airtel Digital TV's premium pack costs Rs 399 and offers 139 channels. Players are continuously evaluating new products to reduce their churn rate. Churn is defined as the number of subscribers leaving a particular operator if not satisifed with the service.

Source: The Financial Express

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#2
Tata Sky is maintaining its leadership in ARPU by their interactive service(VAS). With its increase in subscriber base and maintenance of ARPU the brand will do pretty well.
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