Tata Sky closes in on 1 lakh users
Business Standard — September 14, 2006

Tata Sky was forced to add in more server space for its internet site — where you can apply for a direct-to-home (DTH) connection and get all the details of the service. The reason: it received seven million hits in the last three weeks of potential subscribers wanting to have a peak review. Of course it has not translated into new subscribers. But Tata-Sky hopes to hit the 1-lakh mark by the end of this month. And it has already roped in over 30,000 subscribers to the fold, less than a month of its launch. Ishaat Hussain chairman of Tata-Sky, the joint venture between Tatas and Star TV, said : "We should hit 1 lakh by end of September. The initial response has been very encouraging. And surely we never expected it to be so overwhelming."

Surely, the company is giving tough competition to Dish TV (part of the Zee group), which had monopolised the market for almost three years as the only private sector player. And it claims that its subscriber base is swelling despite competition. "Our business has picked by 40 per cent ever since the second DTH service was launched. Earlier, we were adding 100,000 connections per month and double that during the festival time but now it is roughly 35,000 per week", said Jawahar Goel, business head, Dish TV. Dish currently has 13.8 lakh subscribers and is gunning to rope in 25 lakh by this fiscal end and 40 lakh by 2008-09.

With Dish bringing on the bouquets of Sony and Star on its platform, metros are driving the volumes now as against the rural and semi-urban markets that had been the mainstay of the business so far, added Goel. But Hussain points out that the response for Tata Sky has been good despite the fact that it still does not have either the Zee or the Star bouquet in its platform. He says that while the west has been the largest market, the south understandably is a bit slow as the popular Sun bouquet is not available on their platform. While Dish and Doordashan's DD Direct Plus(which is the other player in the market) logged 32.5 lakh subscribers between them, the total figure is expected to touch 10 million subscribers by 2010.

Analysts warn that competition will heat up with Sun TV waiting in the wings and Reliance Anil Dhirubhai Ambani Group foraying into the segment with 'Reliance Blue Magic' by mid-2007. Add to this the conditional access system (CAS) rollout from January 1, 2007. "DTH is lapping up subscribers right under the nose of CAS players. Once CAS comes in, the fight for market share will become extremely aggressive with players offering lower prices, innovative schemes and focusing on brand building", said a media expert. In fact, discounts are have already begun rolling in to lure the customers. Dish is offering Star bouquet free of charge till December 31, 2007, as a promotional scheme, and even thereafter, it won't cost more than Re 1 a day. It is also offering a second connection in an existing Dish TV home at 50 per cent of the monthly subscription cost.