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Tata Sky, Dish TV are in trouble with Bandwidth
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#1
Early movers in the Direct-to-home (DTH) market, Dish TV and Tata Sky, are caught in a technology bind. They desperately want to increase bandwidth to host more channels and high-definition (HD) content. However, they may not be able to do so unless they migrate to a newer compression technology at a higher cost.

When the Indian Space Research Organisation (ISRO) launched the Indian National Satellite System, or INSAT, series of communications satellites for DTH service providers, the early movers (Dish TV and Tata Sky) got more transponders, while late entrants like Sun DTH, Big TV, Airtel DTH and Videocon d2H got fewer transponders.

Transponders are transceivers or repeaters on a communications satellite. They receive signals from the broadcasting (uplinking) centres, amplify the signals and send them back (downlink) to users (DTH subscribers).

However, Tata Sky and Dish TV started out with using the lower file compression platform of MPEG-2 in their set-top boxes. Sun DTH, Big TV, Airtel DTH, and Videocon d2h, on the other hand, use MPEG-4. MPEG is a file compression methodology. While both MPEG-2 and MPEG-4 are widely used for file compression, the latter has additional features.

In DTH operations, MPEG-4 offers better coding efficiency. Hence, the channel offerings of newer players are at par with that of the older players despite them having fewer transponders (in other words, they can add more channels despite having fewer transponders since the technology squeezes in more content).

On the other hand, Tata Sky and Dish TV would be able to offer more channels only if they migrate to the MPEG-4 platform. But that would come at a huge cost since they would have to cajole existing users to shell out more to migrate to these newer set-top boxes.

As broadcasters start offering more content in HD, however, the need for more bandwidth will only rise. Industry experts say with their present capacity, DTH operators can offer only up to a maximum of 280 channels.

“Older players like Dish TV and Tata Sky are on the MPEG 2 platform where more bandwidth is consumed compared to MPEG-4, the format used by newer operators,” concurs Devendra Parulekar, partner, media and entertainment practice, Ernst & Young.

Tata Sky MD and CEO Vikram Kaushik admits that new capacity is definitely an issue. “Spectrum is a limited resource and operators cannot indiscriminately go on adding channels. Newer compression methodologies like MPEG-4 are a reality but operators cannot just jump from one technology to another. There is a cost involved,” he adds.

He believes that as the prices of MPEG-4 set-top boxes (STBs) come closer to that of MPEG-2 boxes, operators might change the boxes but that might not happen in the next five to six years.

Salil Kapoor, chief operating officer of Dish TV, however, says there is no immediate need for switching over to the MPEG-4 technology. “At present, we offer over 250 channels and have added five HD channels. We do not have any capacity constraint with the 12 transponders we currently have,” he says.

Dish TV, though, has an advantage as the Doordardshan channel satellite is in the neighbourhood. Subscribers, therefore, get those channels without any bandwidth consumption on Dish TV’s transponders.

However, Parulekar of Ernst & Young cautions that terrestrial operators (cable operators) might just snatch the baton from DTH operators if they are not able to add channels. “Cable operators can directly relay the feed of local/regional channels whereas DTH operators don’t have a choice but to uplink their entire bouquet of channel offerings,” he points out.

“Changing the STBs does not look like a near time solution as it involves huge cost to replace the STBs of millions of subscribers. Only if the government launches new satellites will the operators have the opportunity to add more channels and offer newer services,” adds Parulekar.

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#2
Bandwidth has always been a problem that limits the capacity of channel addition. HD requires MPEG 4 and mostly the new STB's are MPEG4.
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