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DTH industry sees rise in churn rate
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#1
Direct to home (DTH) television service, may have 17 million subscribers, but now with price wars, operators are not just pushing for acquiring new subscribers, they are also slowly cutting into each other’s subscriber base.

No wonder the churn rate for this young industry has already reached 5 per cent every month and operators are finding ways to deal with it.

But there's a catch 22 situation. If they go for a price war, average revenue per user or ARPU, will be under pressure. And if they don't then there is always a risk of other DTH players and even cable wallahs eating into the pie.

"No doubt ARPU is under pressure but with intense competition there’s no option but for players to go for aggressive campaigns. And all this will lead to consolidation after few years," said Jehil Thakker, leader media and entertainment at KPMG.

DTH subscriptions are expected to more than double in the next few years and India is one of the most competitive markets globally.

So, you can expect your idiot box to air more aggressive media campaigns going forward and DTH connections being sold at slashed prices. But it also leads to burning holes for the operators through subscribers churning away!

Source: NDTV Profit

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#2
Aggressive promotion strategy will be beneficial for customer to obtain cost benefit out of competitive pricing.
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