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Media: CAS vs. DTH (Part II) - Views on News from Equitymaster
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  • Sep 12, 2007

    Media: CAS vs. DTH (Part II)

    In an earlier article we had described the CAS and the DTH technologies and the benefits of the digitisation process. In this article we will compare CAS and DTH on the basis of pricing, picture quality and value added services.

    Pricing: CAS service is offered by the multi service operators (MSOs) such as WWIL in conjunction with the local cable operators while DTH is offered by DISH TV, Tata Sky, DD Direct.

    CAS offered by WWIL DTH offered by DISH TV
    Entry Cost Rs 999 (Refundable Deposit) plus Rs 30 Rs 3,999
    monthly rent
    Or Rs 250 (Refundable Deposit) plus Rs 45
    monthly rent
    Monthly Charge Rs 30 or Rs 45 Plus Rs 77 for Free to Air Various packages ranging
    channels plus Rs 5 per pay channel chosen from Rs 100 to Rs 300
    Minimum charges/month Rs 107 (30 +77) or Rs 122 (45+77) Rs 100 plus taxes

    In its latest scheme, Dish is offering six months of free subscription on every new connection. On multiple connections in the same household customers can receive 12 months of free subscription. Against this, Tata-Sky is offering 3 months of free subscription on one connection and 5 months on two connections. Dish TV offers 170 digital channels and management is targeting 200 channels by end FY08. Thus, while CAS is cheaper than DTH, it offers better transmission quality.

    Recently, Telecom Regulatory Authority of India (TRAI), the regulator for the media sector, has issued a set of regulations pertaining to DTH broadcasting services. As per these regulations DTH operators can carry only the popular channels and refuse to carry the unpopular channels that are a part of the bouquet. Thus the DTH players will be able to offer DTH services at lower rates which may lead to a further reduction in the DTH subscription rates.

    Convenience: DTH operators deal with their consumers directly. The middleman - the local cable operator - is eliminated. DTH also scores over cable in terms of geographical mobility. If a DTH subscriber is shifting his residential or office location, he just needs to relocate his dish and set top box and re-install them at the new location. DTH satellites have a national footprint and can reach anywhere in the country. With a cable box, one needs to encounter hassles of having to switch his cable operator, get the refund and acquire a fresh connection.

    However, DTH service may not work properly in poor atmospheric conditions such as heavy rainfall. However cable transmission is not susceptible to poor atmospheric conditions. The biggest advantage that cable (CAS) has is the reverse path that does not exist in the satellite based DTH. The cable box is highly interactive and one can give commands for content that can be fetched from the server immediately. DTH operators will have to use a phone line for interactive commands. The only trouble is that MSOs in India have no experience in building special content and the reverse path advantage may be lost. Several value-added services such as electronic programme guide, commercials-free films channel, gaming, child lock are similar in the two systems.

    To sum it up... Both CAS and DTH have their own advantages and disadvantages. CAS is cheaper than DTH but the latter offers better picture quality and eliminates the need for the local cable operator. However, DTH service may not work properly in poor atmospheric conditions such as heavy rainfall. Thus a viewer may have to settle for a lower budget or preference for picture quality and content.

    DTH is a capital-intensive business and it will take time for DISH TV to break even. The entry of Reliance ADAG, Bharti group in the DTH space is likely to lead to a further reduction in prices. At present, DISH TV (the only listed player) has the highest market share in DTH but Tata Sky is fast catching up. MSO's, which will bring more local cable operators under their network and are able to have a pan India network, will succeed in the long run.



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