India Broadband Forum

Vasundra

Direct-To-Home (DTH) operator Tata Sky will focus on segmentation and differentiated product offerings to expand its clients and spread its reach outside Tier-I cities across the country.

Value for money

Stating this at a press conference here on Tuesday, Vikram Kaushik, Managing Director and Chief Executive Officer, said that Tata Sky would always strive to acquire ‘quality customers’. In this context, he explained that Tata Sky would not be so much focussed on the ‘bottom of the pyramid’ clients, who tended to come on to the DTH network and remain active customers only for a transitory phase until the currency of a particular event like the Indian Premier League (IPL). There was a huge initial cost for acquiring such clients. Besides this, there was operating costs for such clients, he said.

Mr. Kaushik said it made no sense for Tata Sky to drive its business by concentrating its efforts around clients with lower ARPU (average revenue per user). In this context, he said DTH should be considered more as an infrastructure industry for pay television rather than a pure entertainment business. He made it clear that the focus of Tata Sky would be on providing value for money for customers who were either at the top or the middle of the pyramid. Mr. Kaushik said the DTH players had to contend with an unequal play field vis-a-vis the cable operators, who could afford price wars due to various factors. While admitting that mandatory digitalisation of the cable television could make the playing field somewhat level, the MD called upon the Government to bring down the incidence of taxation on the DTH industry.

Rising customer base

Further, he wanted the Centre to take a realistic look at the current revenue sharing model.

Mr. Kaushik said there were about 13 million pay channel customers. Tata Sky, which launched its service in August 2006, had a customer base of 3.7 million. In the last one year alone, it had added 1.6 million customers to its network. He expected Tata Sky to add more than 1.6 million customers to its base this year. DTH, he said, was a long-haul business. It would take a minimum of five years to break-even, he pointed out.