India to surpass U.S. in DTH sector by end of 2012 Date:   Wednesday , July 06, 2011 As per the latest MPA reports, India's fast growing, six-player DTH sector is expected to overtake the U.S. next year as the largest in the world, with an active subscriber base of close to 42 million. The local cable & satellite advertising market is expected to surpass China by 2017, to lead the APAC region with $5.6 billion in net revenues. With the DTH market on an upswing in India, Jayant Changrani, Country Head and GM, NDS India, talks about this booming market, opportunities, challenges and NDS’ roadmap for future. NDS supplies open end-to-end digital technology and services to digital pay TV platform operators and content providers. How is the current market landscape? India remains Asia's largest pay-TV market opportunity in which revenue, cost and capital expenditures are growing at a phenomenal rate due to various dynamics, including macro growth, competition and digitization. The active DTH subscriber base is predicted to grow from 23 million in 2010 to 64 million by 2015 and 83 million by 2020, implying a 44 percent share of the overall market by 2020. The main challenges are transponder capacity, high churn, subscriber acquisition costs and limited pricing power due to intense competition and regulations that mean that content has to be available to all operators on a non-exclusive basis. However, with better cost control and scale of operations, we do believe that some of the DTH players will start generating free cash flows by 2015. Also, the recent approval of Ministry of Information & Broadcasting on TRAI’s recommendation to increase the FDI from 49 percent to 74 percent for the DTH sector will further strengthen their expansion plans and resolve a lot of funding issues. How is the landscape going to change with the advent of IPTV? IPTV has been there in India for quite some time now the penetration is very low and the growth equally slow. However, in the long run IPTV will gain some momentum with increased high speed broadband penetration in the country. MPA estimates IPTV to reach more than 600,000 subscribers by the end of 2015. IPTV will not be a threat to the well established cable TV and fast growing DTH platforms, rather the companies most able to roll out IPTV are already operating DTH platforms. So one might expect to see hybrid DTH-IPTV services which offer the big choice of top quality high definition (HD) live content delivered over DTH and on-demand, highly interactive services delivered over a broadband network. What are the challenges posed by the Indian market, compared to the global picture? Many of the challenges are generally applicable across all sectors of both the Indian and global pay-TV sector: high quality expectations combined with a very price sensitive market and the need for highly scalable solutions with rapid rollout schedules, despite an underdeveloped infrastructure. A major challenge in India is the lack of previous investment in infrastructure, which has resulted in a low broadband internet penetration of approximately 4 percent according to MPA. This has hampered the rollout of two-way interactivity for many TV services and restricts the delivery of Video-on-demand and IPTV solutions. What is the future roadmap for NDS in India? NDS has been in the forefront of introducing innovative and cutting edge technologies in the growing DTH market in India. We have already seen a great response to DVRs in the DTH market and now with the high end HD and HD-DVRs the market has opened up to VAS like video on demand (VoD), home gateway solutions and other internet enabled services driven by convergence technologies. We also see a growing demand for state of the art user interfaces which not only helps TV viewers better navigate their linear TV channels but also helps the operators to provide value added services, innovative advertising options and convergence solutions. In India NDS enjoys a leading market share of 43 percent for its conditional access (CA) and set-top box software or middleware solutions – this is far ahead of its nearest competitor. Going forward we will continue developing the latest technologies and solutions to provide a competitive edge to our customers, improving the way people are entertained in the ever changing television landscape.