Cut-throat competition anticipated

The announcement of the commercial launch of the Reliance Jio GigaFiber has sounded the trumpet for a new war in the broadband sector. It seems that the telecom operator has plans of disrupting the broadband and DTH segment as it did for the 4G network back in 2016, and as part of its plans it is bound to release plans with attractive prices. (Zolpidem) Called Jio HomeTV, it may bundle broadband, TV, and home-security billing into a single service.

The rival broadband and DTH players like ACT Fibernet and even the conventional players like BSNL have been revising their broadband plans and increasing their efforts in the sector.

Airtel Digital TV is looking to acquire Dish TV, a significant DTH player along with Singtel. The Singapore-based telecom giant will buy a 60-percent stake in Dish TV along with Airtel. If the merger goes through, Airtel Digital TV and Dish TV will together make the world’s largest TV distribution company with 38 million subscribers and 61 percent DTH market share in India.

In March 2019, Dish TV’s market cap was valued at `7263.75 crore. Dish TV India Ltd. had reported a consolidated net loss of `1316.30 crore Q4FY19. The company had posted a net profit of `118.21 crore in the January–March quarter a year ago. Its revenue from operations during the quarter was `1398.75 crore. It was `1532.37 crore during the corresponding quarter of the previous fiscal. Meanwhile, Dish TV said its results were not comparable as Videocon D2H Ltd. had merged with it and all the assets and liabilities had been transferred in the company, on a going-concern basis with effect from the appointed date.

As for Airtel Digital TV, the company had 15 million subscribers by the end of Q3FY19. The revenue from DTH business stood at `1033 crore, with an EBITDA of `382.6 crore and margins of 37 percent. The ARPU for Airtel was higher and was calculated to be `231.

Tata Sky is also on the lookout for investors lately as Temasek and Tata Opportunities Fund, which together own 19 percent stake in the company, are also looking for a way out. However, Tata Sky faces a two-way threat from Reliance Jio as it will take the hit on DTH and broadband, both fronts. Under its latest move, the DTH and broadband service provider has now expanded its operations to 20 cities.

In its initial days, Tata Sky had started its operations by launching in 14 cities, where it introduced different plans and offerings. These 14 cities included Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Ghaziabad, Greater Noida, Gurgaon, Hyderabad, Mira Bhayandar, Mumbai, Noida, Pimpri Chinchwad, and Thane. In its next phase, Tata Sky expanded its broadband operations to three more cities, Kolkata, Pune, and Jaipur.

Now the operator has also expanded to three more towns, thus totalling the cities of service under Tata Sky broadband to 20. The three new cities under Tata Sky broadband include Surat, Navi Mumbai, and Lucknow.

DTH market data published in September 2018 by TRAI revealed that Dish TV (combined with Videocon d2h) has the upper hand in the market with 37 percent market share. Next is Tata Sky which boasts 27 percent market share and then Airtel Digital TV with 24 percent market share. In the quarter ending December 2018, Dish TV boasted having 23.6 million subscribers, and operating revenue of `1517.4 crore, EBITDA of `517.6 crore, and an ARPU of `200.