Regulatory issues hurt DTH business: Bharti Airtel's Gopal Vittal
During the company's Q4 earnings call, vice-chairman and MD Gopal Vittal said different distribution systems-like cable TV, DTH, and broadband-are governed by different regulations, despite serving the same set of consumers, with DTH facing stringent rules such as cross-holding restrictions and pricing caps.
'The DTH industry is going through its moment of reckoning-not just due to legitimate technological disruption, like IPTV and broadband-enabled connected boxes, but also because of how it has been regulated,' Vittal said, adding, 'Today, three neighbouring homes-one with DTH, one with cable, and one with broadband-operate under entirely different regulatory constructs. DTH faces price controls and cross-holding restrictions; cable has a different set of rules, and broadband is completely unregulated.' He also pointed out the impact of DD Free Dish on the pay-DTH universe, which he said was launched by the government for entirely different purposes.
'Then there's the rise of DD Free Dish, which offers strong entertainment content at little to no cost. These are some of the other headwinds that the industry is facing,' he said, pointing out that the original intent of DD Free Dish was to provide educational programming in domains like agriculture in rural areas.
Despite these headwinds, Vittal believes DTH still has a future, as home broadband won't reach every household-out of 260-270 million homes in India, which includes 150-160 million TV homes. 'Perhaps 75-80 million will have broadband in the next five years. That leaves a significant market for linear TV, where DTH will continue to play a role. And there's still an opportunity to grow from cable,' Vittal said.
On May 3, Airtel announced that it and Tata Play-70% owned by Tata Sons-had mutually agreed to end their discussions, having failed to reach a satisfactory resolution. The deal, if consummated, would have created India's leading pay-TV operator.Airtel has also done away with subsidies on set-top boxes (STBs) to reduce capex in DTH. In FY25, the company's capex on digital TV, which also includes IPTV from Q4, rose 16% to ₹1,665 crore.'We've taken a brave call and done it. We're waiting for the competition to follow, and we hope sense will prevail to strip those subsidies out-because there's no point in subsidies that just rotate your customer,' he said.
Airtel Digital TV, the DTH brand of Airtel, competes with Tata Play, Sun Direct and Dish TV in the DTH industry, which had 58.22 million paid DTH subscribers as of December 2024.
'We've now launched IPTV, which will further enhance our customer experience drive. Convergence has also lowered our capex spend on the box,' Vittal noted. Airtel's digital TV business added 76,000 customers in Q4, largely aided by the IPTV launch.
In March, Bharti Airtel launched its IPTV service in 2,000 Indian cities, offering 600 TV channels, high-speed Wi-Fi, and on-demand content from 29 streaming apps.
'Our IPTV launch has seen an encouraging response from customers. IPTV delivers enhanced convenience with a better user experience and flexibility to watch on demand as well as catch-up content, in addition to linear broadcast content,' he noted.
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