Ankit A. Modi (23)

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An In Depth Study Of DTH Industry In INDIA

• Presented By
• Ankit A. Modi (23)
• Bhavya Patel (90)
• Fahad Ramporia (46)
• Neha Pandya (83)
• Prashant Malvaniya (21)

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Introduction

• Definition
• A digital satellite service that provides
  television services direct to subscribers
  anywhere in the country. Since it makes use of
  wireless technology, programs are sent to the
  subscriber's television direct from the
  satellite, eliminating the need for cables and
  any cable infrastructure.

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Product History

• Concept of satellite television started 64
  years ago in the mind of Arthur C. Clark.
• HBO moved first to satellite delivery of
  programming.
• DTH Satellite receivers were developed in the
  Early 1980.
• In 1981-85 dish fever grows faster in the world.
• In India STAR TV initiated for DTH plans in
  1997.

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Substitutes of the product

• Cable Operator
• IPTV
• (live television, time-shifted programming, and
  content on demand )

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Product Technology and service processing

• Television receive-only
• Direct to home television
• Programming
• Broadcasting centers
• Transmission
• The Dish
• The Receiver

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Industry Life Cycle
Year Subscribers (In million)
2003 0.00
2005 1.00
2007 4.00
2009 18.70
Source TV VEOPAR JOURNAL/ April 2009/ Page No40
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Global Scenario
Region/Country Players
   
The United States 11
Canada 5
Japan 2
Europe 23
France 4
Germany 1
U.K. 5
Italy 1
Spain 1
Rest of Europe 11
Asia-Pacific (Excluding Japan) 28
Middle East 2
Latin America 8
Africa 1
Total 80
Source http//www.strategyr.com/DTH_Satellite_TV_
Services_Market_Report.aspx
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Indian DTH Industry

• Permitted in 2000, Started in 2001.
• Private Players entered in 2003 (Dish TV).
• Current 7 players (1 Govt. 6 Private).
• Source Business Standards, 9-11-2009.

Company's Name Subscribers (In Million) Market Share
Dish TV 5.92 31.62
Tata Sky 4.50 24.04
Sun Direct 4.30 22.97
Airtel Digital TV 2.00 10.68
Reliance Big TV 2.00 10.68
Videocon d2h NA NA
DD Direct NA NA
Total 18.72 100.00
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Revenue Structure
Revenue Drivers Percentage ()
Sales 1.29
Subscription income 79.94
Processing Charges/Service Income 1.80
Other Operational Income 16.96
Total 100.00
Source ACCEQUITY
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Cost Structure
Cost Drivers Percentage ()
Raw Material Consumed 1.42
Power Fuel Cost 0.24
Employee Cost 4.33
Production Expenses 57.03
General and Administration Expenses 4.90
Selling and Distribution Expenses 29.03
Miscellaneous Expenses 3.05
  100.00
Source ACCEQUITY
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Political Factors
Factors Unfavorable Neutral Favorable
Political Parties v
Regulatory Role of Government v
Rules for licensing v
Trade Restrictions And Tariffs v
FDI cap v
Government Stability v
(Here, Unfavorable-1 Favorable-3) Weighted
Average (2143)/ 6 2.33 Thus the overall
effect of Political factors on this industry is
Favorable.
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Economic Factors

• (Here, Unfavorable-1 Favorable-3)
• Weighted Average (1153)/ 6 2.67
• Thus the overall effect of economic factors on
  this industry is Favorable.

Factors Unfavorable Neutral Favorable
Currency Stability v
Gross Domestic Product v
Inflation Rate v
GDP based on PPP v
Interest Rate v
Budget Impact v
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Social Factors

• (Here, Unfavorable-1 Favorable-3)
• (Here, Unfavorable-1 Favorable-3)
• Weighted Average (1253)/ 6 2.83
• Thus the overall effect of Social factors on this
  industry is Favorable.

Factors Unfavorable Neutral Favorable
Consumer attitudes and opinions v
Brand, company, technology image v
Buying access and trends v
Age distribution and lifestyle trend v
Family form and Population shift v
Cultural implications of DTH v
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Technological Factors

• (Here, Unfavorable-1 Favorable-3)
• Weighted Average (1263)/ 7 2.86
• Thus the overall effect of Social factors on
  this industry is Favorable.

Factors Unfavorable Neutral Favorable
Technology v
Govt. course of action towards Technology v
Technology Initiative v
Rate of Technological Change v
Industry RD Spend v
Technology Push v
Productivity Improvements v
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Five Force Model
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Threats of New Entrants (Moderate to Low)
Factors Low Moderate To Low Moderate Moderate To High High
Access to Distribution network (High) v
Advertising Marketing Activity (High) v
Regulation norms (Moderate To High) v
Capital Requirement (High) v
Cost Design (Moderate to Low) v
Industry Growth (High) v
Government Policy (Liberal) v
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Threats of Substitute Products (Moderate to High)
Factors Low Moderate To Low Moderate Moderate To High High
Determinants of substitution threat (Low) v
Costs of switching to substitutes (Low) v
Availability of substitutes (Moderate To High) v
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Bargaining Power of Supplier (Moderate to Low)
Factors Low Moderate To Low Moderate Moderate To High High
Backward Integration (High) v
Supplier Switching Cost (Low) v
Forward integration(Low) v
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Bargaining Power of Buyers (Moderate to High)
Factors Low Moderate To Low Moderate Moderate To High High
Buyer Switching Costs (Low) v
Brands Awareness (High) v
Availability of Substitute Products (High) v
Purchase Frequency (High) v
Innovative Services (High) v
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Inter Firm Rivalry (High)
Factors Low Moderate To Low Moderate Moderate To High High
Competition between Companies (High) v
Switching costs (Low) v
Demand Growth (High) v
Untapped Market (High) v
Promotional Activities (Moderate to High) v
Exit barrier (High) v
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BCG Matrix
Company's Name Subscribers (In Million) Market Share Relative Market Share
Dish TV 5.92 31.62 1.32
Tata Sky 4.50 24.04 0.76
Sun Direct 4.30 22.97 0.73
Airtel Digital TV 2.00 10.68 0.34
Reliance Big TV 2.00 10.68 0.34
Videocon d2h NA NA -
Total 18.72 100.00  

• Industry Growth Rate 30.
• Source Business Standards, 9-11-2009.

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GE 9 CELL Matrix
Business Strength Weight Dish TV Dish TV Tata Sky Tata Sky Sun Direct Sun Direct Airtel Digital Airtel Digital Big TV Big TV Videocon D2h Videocon D2h
  Rating Score Rating Score Rating Score Rating Score Rating Score Rating Score
Market Share 0.25 9.00 2.25 7.50 1.88 7.50 1.88 5.00 1.25 5.00 1.25 2.00 0.50
Financial Resources 0.20 7.00 1.40 8.50 1.70 8.00 1.60 7.50 1.50 7.50 1.50 4.00 0.80
Brand Reputation 0.15 7.50 1.13 7.50 1.13 6.50 0.98 7.00 1.05 7.50 1.13 6.00 0.90
Distribution Capacity 0.12 8.00 0.96 7.00 0.84 6.50 0.78 6.50 0.78 7.00 0.84 5.50 0.66
Advertising Capabilities 0.15 8.50 1.28 7.50 1.13 7.00 1.05 7.00 1.05 6.50 0.98 4.00 0.60
Ability to Compete with Rivals 0.13 8.00 1.04 7.00 0.91 7.50 0.98 7.00 0.91 7.00 0.91 5.00 0.65
  1.00 8.05 7.58 7.26 6.54 6.60 4.11
DTH Service Industry DTH Service Industry
Industry Attractiveness Weight Rating Score
Current Market Size 0.20 8.00 1.60
Regulatory Environment 0.15 7.00 1.05
No. of Competitors 0.12 6.50 0.78
Barriers To Entry 0.10 7.00 0.70
Market Growth Rate 0.13 7.50 0.98
Industry Profitability 0.15 8.00 1.20
Technology Change 0.15 7.50 1.13
  1.00   7.43
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ADL (Arthur D. Little) Matrix
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Driving Forces

• Internet technology applications
• Long term industry growth
• Product innovations
• Technological changes
• Regulatory influence
• Changing societal concerns, attitude lifestyles

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Key Success Factors

• Innovative Services
• Innovative Marketing
• Distribution
• Technology

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Strategic Factors

• Exploit Bottlenecks
• Move First
• Exploit Market Niche

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Diamond Model
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VALUE CHAIN ANALYSIS
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OT Analysis

• Opportunities
• Huge Untapped market
• Govt. in favors of industry
• New products comes in the market
• Company have own cable subscriber
• Technology development and Innovative Services
• Market developments
• Geographical, export, import
• Industry or lifestyle trends

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• Threats
• switching cost
• Government policy/regulations
• IT developments
• Competitor intentions
• Seasonality, weather effects
• Lack of possibility of growth

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Conclusion
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• THANK YOU..