DTH Operators Target Rural

Increasing desire of rural population for urban goods and services spells tremendous opportunities for Direct-to-Home (DTH) operators in India. Mohd Mustaquim reports on the changing scenario.
DTH Operators Target Rural

Direct-to-Home (DTH) television service, which has been an urban phenomenon, has found new markets in the hinterlands of the country. According to the findings of a market research firm, 70 percent of DTH subscribers are from villages and small towns in India. Surprisingly, only 2-3 percent of DTH subscribes come from major metros like Delhi and Mumbai.

The size of Indian DTH industry is expected to reach US $ 5.3 billion by 2020, three times more than the current market size. According to a Hong Kong based research company Media Partners Asia, the industry will reach US $ 3.9 billion by 2017. The revenue growth will largely be driven by the increasing subscriber base, which is expected to touch 76.6 million by 2020.

The report further states that the market is dominated by Dish TV with a market share of 27 percent; Tata Sky and Airtel Digital TV have 19 percent 18 percent of market share respectively.

Lack of cable network in the rural areas offers tremendous opportunities to the DTH service providing companies. Focusing on this opportunity, major telecom operators of the country have entered into DTH sector.  Currently, there are seven players operating DTH in India.

In the hinterlands of the country, DTH services are dominated by Dish TV and DD Direct. While the Southern market being dominated by Sun Direct DTH services.

With high-end services, reaching out to rural consumers is not easy as they are highly price sensitive. Chief Commercial Officer of Tata Sky, Vikram Mehra says, "Rural India is a price sensitive market. In India, customers have always based their buying decisions on the quality and service support of a brand along with high value proposition for the price being paid. Tata Sky, as an organisation, is built on these two very important pillars- High value proposition and excellent service quality. Hence, pricing at Tata Sky has been based on customer needs."

 Road to Rural
Advancing their focus on the rural consumers, leading DTH players are now increasing regional language channels. Dish TV, the largest player, recently added Maithili Channel, Sobhagya Mithila to its package.

Explaining the new initiative, the company’s chief operating officer, Salil Kapoor, states, "At Dish TV, we are always innovating and exploring new opportunities to bring wholesome entertainment to the masses. We are delighted to add ‘Sobhagya Mithila’ the leading Maithili Channel on the largest DTH platform with 16 million subscribers."

 The company caters to consumers through 1450 distributors and over 136,000 dealers, spanning across 8,358 towns in the country.

 Following the suit, its biggest competitor, Tata Sky, added 19 Malayalam Channels to its platform to attract southern audience. And going further, the company has now reduced the price of HD boxes from Rs 3,100 to Rs 2,000.

Last  Onam , Videocon D2H added 20 Malayalam channels to its platform to pull the viewers in South India.

Eradicating Media Darkness
Rural India was never courted with so much importance. However, increased television penetration has changed the landscape. Both the central and state governments’ efforts to electrify villages, increasing disposable income, urban exposure and increasing desire for urban goods and services are the factors which have helped increase the penetration.

 According to Mehra, "In the past few years, television penetration in rural India has gone up from 31 percent, in 2007, to 39.8 percent, in 2010. Currently, the total number of TV owning households in rural India is over 82 million. With digitisation being made mandatory, this number is likely to snowball over the next couple of years."

Television, with its customised reach and diverse content, has far reaching impact on the large rural population of the country. It has proven to be one of the most effective means of communication for governments and marketers alike. Be it reaching out to the rural masses on health and nutrition related issues, acceptance of the girl child or selling washing powder and toothpowder, television has in more ways contributed to the increasing awareness levels and the changes in market trends in the rural parts of the country.

Rural India traditionally had DD or cable operators in villages. They were only exposed to a limited set of channels, large number of black outs, power cuts, and no customer care service.

 Talking on the spread of Tata Sky, Mehra says, "Today, Tata Sky has strengthened its distribution and services in over 20,000 towns and villages. By paying marginally more, DTH is now affordable in these markets with higher transparency, more choice of channels, better and upgraded quality of viewing entertainment in the comfort of their homes."

Having the desire for urban products and services by rural mass and lack of appropriate cable network certainly open the door for DTH operators in the hinterlands of the country. However, pricing plays an important role in penetrating rural India, so there is the need to bring customised channels, useful for rural viewers at cost effective tariffs.

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The Changing Face of Rural India