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DTH companies shift to rural India for subscribers
The battleground for direct-to-home (DTH) companies is expected to soon shift to semi-urban and rural India. While players try to woo the urban cable and satellite (C&S) consumers, they have already set their sights on smaller cities, especially the non-C&S television homes.

Adding nearly 8-10 lakh new users per month during last 4-6 months, DTH is not just an urban phenomenon. For instance, Airtel Digital TV will be tapping its large telecom distribution channel to reach out to tier- II and III cities.

"Our initial strategy was to be present in the 250 large cities. Now we plan to reach out to additional cities and towns. Non-C&S homes and smaller towns will bring in an important chunk of future growth," says Ajai Puri, chief executive officer (DTH), Bharti Airtel.

Bharti Airtel is working on cost-effective subscription packages to woo consumers in smaller towns. Puri said the company will leverage synergies with the firm's telecom business. For instance, Airtel Digital TV recently launched schemes where new DTH subscribers get free talk time on their Airtel phone connections.

While telecom players that expanded into DTH such as Airtel and Reliance Communications (with Big TV) are banking on their pre-paid and fixed line customers in tier- II and III cities to broaden their base, others are working on low-cost set-top boxes (STBs) and offering tailor-made packages that suit rural consumers' interest. This also helps DTH companies lower prices of their channel bouquet.

DTH player Tata Sky has seen demand from smaller cities grow after the introduction of its electronic programming guide (EPG) in Hindi. EPG helps a DTH subscriber navigate between various channels and access other value-added services.

Vikram Mehra, chief marketing officer, Tata Sky, says, "It is a myth that DTH is going to be an urban product. Consumers in smaller towns and rural areas have very high aspirations and willing to pay for better options.

Market leader Dish TV had pioneered DTH in the country by launching it in non-C&S areas and is now turning back to its rural strategy. The DTH player is working on low-cost STBs and cheaper monthly subscription schemes to tap the 40-million non-cable and satellite TV homes in India.

"The next wave of growth for DTH companies will come from smaller cities as well as non C&S homes. We expect to consolidate our market share from the bottom of pyramid by the 2012." says Jawahar Goyal, managing director, Dish TV.

As per Intelligence Unit (TIU) estimates, India has about 145 million television homes, out of which 95 million homes have access to satellite cable. DTH is expected to touch 50 million user mark in the next 3 years from the current user base of about 15 million.

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