Videocon to launch DTH service in Feb 2009

Vipin Bajaj - Televisionpoint.com | New Delhi
Venugopal Dhoot, chairman, Videocon Industries, has decided to advance the launch date for two of his much-talked about businesses - direct-to-home (DTH) and cellular services, to February 2009.

Dhoot said the group should be in a position to roll-out both the DTH and telecom services in the current fiscal itself, contrary to the earlier prevalent view that the launches would take place only in 2009-10.

While the Videocon boss declined to reveal specifics in terms of investment and the strategy being put in place to counter competition, he, however, said the original plan of taking both the new businesses national within a short period of time remained on course.

Differences with his business partner in the case of telecom and a series of issues on the DTH front prevented Dhoot from adding these businesses to his portfolio in 2008.

Although a high-profile business, the cost of launching a DTH business, unlike telecom, does not need much money. Putting the DTH infrastructure in place normally costs around Rs 70-80 crore. The bulk of the expenditure comes in the form of advertising costs.

"We are presently recruiting sales and service staff as we prepare for the launch of D2H through our media arm, Bharat Business Channel Limited (BBCL). We will use existing group synergies to ensure its competitiveness, with our sales force now mapping out various territories in India." said Dhoot.

Videocon will be the seventh company to enter the DTH space in India even as existing players are making losses to the tune of Rs 1 crore per day on account of subsidised set top boxes and subscription plans. The recent entry of two more players has driven down the price of these set top boxes, adversely impacting the profitability of the ventures.

Dish TV, the first to offer DTH services in 2003, was followed by Doordarshan (DD) in 2004 and Tata Sky in 2006. The entry prices for a dish antenna and STB were then around Rs 5,000 while subscription plans ranged from Rs 250 for some channels to Rs 600 for a full bouquet of channels.

The recent entries of Sun Direct, Reliance Big TV and Airtel Digital have sparked a price war, with entry prices going as low as Rs 1490 and subscription plans starting at Rs 99.