A study on Indian Direct-to-Home Services Management research project I Submitted In partial fulfilment of the degree of Master of Business administration

n Semester III By Subhash Barot(02) Jayesh Kadchha(07) Mittal Chaudhary(45) Khyati Jha(50) Under the Guidance of: Prof (Dr.) Mahendra Sharma Director & Head, V. M. Patel Institute of Management. & Dr. Rohit Trivedi Co-ordinator, V. M. Patel Institute of Management. Submitted to: V. M. Patel Institute of Management, Ganpat University, Kherva.

December, 2009

CERTIFICATE BY THE GUIDE

This is to certify that the contents of this report entitled A study on Indian Direct-to-Home services by Subhash Barot(02), Jajesh Kadchha(07), Mittal Chaudhary(45), Khyati Jha(50) submitted to V. M. Patel Institute of Management for the award of Master of Business Administration (MBA Sem III) is original research work carried out by them under my supervision. This report has not been submitted either partly or fully to any other University or Institute for award of ant degree or Diploma. Prof. (Dr.) Mahendra Sharma, Director and Head, V. M. Patel Institute of Management, Ganpat University, Kherva. Date: Place:

CANDIDATES STATEMENT
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We hereby declare that the work incorporated in this report entitled A study on Indian Direct-to-Home Services in partial fulfillment for the award of Master of Business Administration (Sem III) is the outcome of original study undertaken by us and it has not been submitted earlier to any other University or Institution for the award of any Degree or Diploma. Date: 3rd December, 2009. Place: Kherva, Mehsana Subhash Barot ________________________ Jayesh Kadchha ________________________ Mittal Chaudhary ________________________ Khyati Jha
________________________

PREFACE

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The report contains the analysis of the DTH industry in the Indian market i.e. from its evolution to the current market scenario; the analysis of the key players who dominate the whole Indian market and what is their respective market share in this segment; the PEST analysis; the SWOT analysis of the industry. Based on the various articles that we have referred and based on the various internet sites that we have visited for our report, we have done the analysis of the DTH industries and we have tried our best to come out with recent news articles related to the industry. Based on the study and the articles, in the final part of our report, we have come up with the major findings of the industry and based upon that, we have given certain recommendations to the industry.

ACKNOWLEDGEMENT

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An act of acknowledgement is that which acknowledged the blessings of well wishers and supporting guidance of their rich experience, which enlightens, inspires and motivates to do something valuable. We are very thankful to our institute to give us an opportunity to get associated with the project. We also extend kind regards towards the Director of our college Dr. Mahendra Sharma and our faculty guide Dr. Rohit Trivedi, who were always keen to help us out in their best possible way.

List of tables
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4.1DTH player sprices 8.2 EFE Matrix evaluation

22 51

List of figures

4.1Five forces analysis 6.2 SWOT Framework 7.1 3 Ps

19 30 43

Abbreviations used

1. DTH- Direct to Home 2. LCO- Local Cable Operator

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3. MSO- Multi System Operators

4. CAS- Conditional Access System 5. HITS- Head end-In-The-Sky 6. CPE- Customer Premises Equipment 7. STB- Satellite Box

CONTENTS
Certificate by the guide ii
vii

Candidates statement Preface Acknowledgement List of tables List of figures and graphs Abbreviations used

iii iv v vi vi vii

Chapter 1 Introduction.1-8 1.1 1 1.1.1 History of Indian Broadcasting 1.1.2 DTH VS. Cable/CAS 1.1.3 Components of a DTH offer 1.1.4 Strategic and success Factors 1.2 7 1.3 8 References DTH make the people expect the unexpected 1 4 6 6 before Introduction to The Industry

Chapter 2 Research Objective...9 2.1Research Objective 2.2 Non financial analysis 2.3 References 9 9 9

Chapter 3- The current players in DTH industry 10-18

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3.1 Doordarshan Direct Plus 3.2 Dish TV 3.3 TATA Sky

10 11 12

3.4 Sun Direct 3.5 Big TV 3.6 Airtel Digital TV 3.7 Videocon D2H 3.8 References

13 15 16 17 18

Chapter 4- Porters Five Forces Model ...19-23 4.1 Michael Porters Five Forces Model 4.2 References 19 23

Chapter 5- PEST Analysis ..24-29 5.1 PEST Analysis Introduction 5.2 References 24 29

Chapter 6- SWOT Analysis.....30-37

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6.1 Introduction 6.2 Analysis of SWOT 6.3 Conclusion 6.4 References

30 30 36 37

Chapter 7- Service Marketing Mix/Extended Marketing Mix .38-46 7.1 Analysis of 7 Ps 7.2 References 38 46

Chapter 8- External Factor Evaluation (EFE) matrix .47-52 8.1 Introduction of EFE matrix 47

8.2 47 8.3 51 8.4 51 8.5 52

Steps

used

for

EFE

EFE

Matrix

evaluation

Conclusion

References

Chapter 9- Challenges 53-56

10 Chapter 10- Findings & Conclusion ................................57-58

11 Chapter 11- Recommendations 59

12 Chapter 12- Limitations60

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Chapter 1- Introduction 1.1 Introduction to the Industry:

Direct-To-Home television or popularly known as DTH services is defined as the transmission of satellite programme directly in consumers house using a personal dish. The history of DTH services in India started way back in 1996. But, the proposal couldnt get through policy hurdles due to concern over national security and threats to cultural invasion. However in July 2006, it was finally approved by Indian Government. Currently DTH customers base stands up to 14 million whereas still total cable TV households subscriber number is 75 million. That clearly shows the future growth perspective of this industry. With the Indian economy booming at a GDP growth rate of 9.4%. The average Indians disposable income and purchasing power has risen to never before levels. The Indian Entertainment & Media industry is also not far behind. It is currently estimated at a worth of Rs. 450 billion with a CAGR of 18% over the next 5 years. Terms which were alien to Indians like DTH, Digital Cable, and IPTV are suddenly finding presence in the countrys journals. A report predicts that India would overtake Japan as Asias largest DTH by near future. and be the Asia's leading cable market by 2010 and the most profitable pay-TV market by 2015. This growth presents a lot of interesting scenarios. In this paper, we shall analyze the challenges and opportunities present for the DTH industry within the Indian context. 1.1.1 History of Indian Broadcasting:

The history of Indian Television dates back to the launch of Doordarshan, the countrys national television network in 1959. Television was then seen as a luxury item that could be afforded only by a chosen few. The transmission was in Black & White. The 9th Asian games which were held in 1982 in the countrys capital New Delhi heralded the mark of colour television broadcast in India. In 1991, Indian economy was liberalized from the License Raj and major initiatives like inviting foreign direct investment, deregulation of domestic businesses emerged. This lead to the influx of foreign channels like Star TV and creation of
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domestic satellite channels like Sun TV and Zee TV. This virtually destroyed the monopoly held by Doordarshan. In 1992, the Cable TV industry started. If one could list down the revolutions that happened in Indian entertainment industry, Cable TV would top the list. It has literally changed the way the average Indian watches the Television. The number of channels increased suddenly from 2 and the real entertainment started. Every city in India had a complex web of co-axial cables running through the streets with a new breed of entrepreneurs called as cable wallahs or Local Cable Operator (LCO) taking in charge of distribution. The film industry was shocked by this sudden growth and there were even organized protests for calling off the Cable TV industry. The industry survived but the sudden onset of growth made it as a disorganized sector. There were simply too many cable operators in the country. Carrying new channels on the existing infrastructure required new investments which the operators were reluctant to make. Also the Channels had a difficult time in getting its returns as the existing system was a non-addressable and the operators could simply give a reduced number of subscribers to amass profit. This lead to the emergence of a new breed of firms called as Multi System Operators (MSO) who had heavy financial muscles to make capital investments. They liaised between the cable operator and the Channels. MSOs provide the feed to the local operators for a fee. Soon the industry consolidated with each city having one or two MSOs operating. Most of the channels are carried by all the MSOs but sometimes certain channels are shown only on a specific MSO network. The MSO industry has become highly monopolistic which warrants government participation to ensure competition. Current estimates show that there are 6000 MSOs operating in the country feeding 60000 LCOs. In 1995, Government felt the need of regulation in Cable TV and passed the Cable TV networks (Regulation) Act. This was also the time when the state owned Doordarshan and All India Radio came under a new holding called as Prasar Bharati to give them enough autonomy. Even with the basic regulation in place, there were lots of distribution issues with Cable TV. The LCOs reported a lower number of connections where as the broadcasters demanded a higher rate. MSOs were finding it difficult to operate under these conditions. This lead to an amendment of the Cable TV networks (Regulation) Act in 2002 to provide Conditional Access System (CAS). With CAS, the last mile distribution could be addressable with accuracy and digitalization of broadcast was also possible. CAS was rolled out in 2003 starting from Chennai
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and later to parts of Delhi, Mumbai and Kolkata. On the DTH front, the United Front government had issued a ban on use of Ku band transmission. After a change of government, the ban got lifted finally in 2001 and TRAI issued the guidelines for operating DTH. Countrys first private DTH license was awarded to Dish TV in 2003 which started operations in 2004. Prasar Bharati also started its product DD-Direct+. In 2007, TRAI proposed a new initiative by name Head end-In-The-Sky (HITS)3 model as an alternative to the existing cable distribution. Instead of the MSOs providing the bundle, there will be a single HITS operator who will prepare the bundle of channels and beam it to the Headend in the satellite. The LCOs can receive this digitalized bundle and deliver to the individual homes. With HITS, country wide implementation of CAS becomes instantaneous and cost-effective. This benefits both the broadcasters and the customers by ensuring Addressability, Better quality of Picture. For example, Government of Tamilnadu has decided to float a state owned MSO to ensure competition. Consultation paper on Head end-In-The-Sky (HITS), TRAI, Jul 24 2007 In 2007, TRAI proposed a new initiative by name Head end-In-The-Sky (HITS)3 model as an alternative to the existing cable distribution. Instead of the MSOs providing the bundle, there will be a single HITS operator who will prepare the bundle of channels and beam it to the Headend in the satellite. The LCOs can receive this digitalized bundle and deliver to the individual homes. With HITS, country wide implementation of CAS becomes instantaneous and cost-effective. This benefits both the broadcasters and the customers by ensuring Addressability, Better quality of .For example; Government of Tamilnadu has decided to float a state owned MSO to ensure competition. Consultation paper on Head end-In-The-Sky (HITS), TRAI, Jul 24 2007.

1.1.2 DTH VS. Cable/CAS:

DTH

Cable TV-CAS

Technology

-DTH transponder down linking In addition to satellite down is digital and the set top boxes linking being analog, last mile are also digital. connection still remains analog in many cases. The set top boxes can be digital or analog depending on subscriber -Quality of reception may be preference. superior compared to Cable TVCAS. Therefore quality of reception may be inferior compared to DTH -It will be available (TRAI regulation makes it mandatory for the MSOs to set 24 hours customer services cells)

Consumer redressal -It is up to the individual facility for poor services providers to provide services quality this services (No TRAI Regulation).

Set Top Box

-No rental scheme is available -The set top box can be either for set top box. The viewer buys purchased or taken on rental a set top box (viewer is the scheme. owner of the set top box) -At present there are two rental schemes, (1) digital -While the antenna is provided by the services provider. For all the apartments in the same building, a single antenna can be used. set top box will be provided at a monthly rental of Rs30 / month plus refundable deposit of Rs.999 with a deduction of Rs.12.50/month, (2) set top box will be provided at a rent of Rs.23 (for analog) or Rs.45 (for digital) plus refundable deposit of Rs.250 with a deduction of Rs.3/month.

Number of STB for -Per TV one set top box but no -Per TV one set top box & a multiple TV separate antenna will be different cable connection required Household

Mobility MSO to another

from

one -New antenna as well as set top -New Set top box has to be taken box has to be taken if the if the MSO changes services provider changes.

Audio-Video Quality

-High as digital set top box is -Depends on the kind of set top used. box. If it is digital set top box then high quality Audio-Video possible.

Audio-Video Quality

-High as digital set top box is -Depends on the kind of set top used. box. If it is digital set top box then high quality Audio-Video possible.

Advertisement time

-Not controlled. regulation yet)

(No

TRAI -12min/hour (TRAI regulation). This will reduce the advertisement clutter, making television viewing more pleasant.

Channel charges

-The charges have not been fixed by TRAI. The broadcasters are free to determine the charges for their pay channels. The monthly subscription charges are lower if more than one set top box is installed in a house. Currently for Rs200/month, more than 100 channels are available.

-As per TRAI regulation, Rs77/month for FTA (minimum 30 channels) and 5/channel/month for pay channels (viewers would be anxious to know how long will it be before TRAI raises this cap on the demands of the broadcasters).

Cost of services

additional -Options of VOD etc. will come -Interactive features like VOD, at additional cost. internet facilities etc. will come at additional charges though it has not been decided yet.

1.1.3 Components of a DTH offer: 5

Content: The movies, news channels, sporting events, and/or general entertainment features that constitute an offer to consumers. Space: Ownership or access to sufficient transponders in the right orbital slot to broadcast an offer to a specific area. Ground: The ability to distribute, install and service dishes and set-top boxes (otherwise known as customer premises equipment, or CPE), combined with access to relevant technology and manufacturing capabilities.

Subscriber management: Ability to acquire and deactivate subscribers, bill and collect from them, activate pay-per-view movies and perform customer service. Financing: The provision of credit to customer seeking to buy or lease CPE. Government relation: Ability to navigate government procedures and regulations to obtain permits and so on.

1.1.4. Strategic and success Factors:

Exploit Bottlenecks:

In this market, content and transponder capacity are scarce and controlled by a few players. With content, access to unique local language material is critical. In a market like India, all a DTH player may need to do is repackage existing channels that are not universally available. In sports, some players have won an advantage through long-term rights purchases. Broadcasting rights to cricket in India, for example, belongs to ESPN for the next five years. It also controls the right to football for West Bengal (the most popular league) for ten years. The second obvious bottleneck is in transponder capacity. A modest DTH offering is likely to require a minimum of 10 to 15 transponders-almost a dedicated satellite. The number of satellite that can broadcast to a particular region is limited by physics.

Move First:

In the DTH industry, a credible and well managed first-mover service has a tremendous advantage over others. In India, a first mover may effectively shut out competition.

Exploit Market Niche:

In some markets, the segment of consumers who desire highly specific content may be large enough to form the core subscribership of a DTH service. An example of this could be again cricket in our country. A few things are assured in the DTH industry even in the face of paradigm shifts. First, the value of transponders is likely to fall as compression allows more and more content to go through the same satellite, and as more satellite are launched. Second, as bandwidth explodes, so will demand for content. Obscure sports and the like will become more valuable; conversely, much of the content that is currently valuable will face downward pricing pressure. Niche content providers will emerge. The industry is likely to be characterized first by a period of fragmentation and then by an increasing concentration of global consortia as unprofitable participants fold. What is clearer than ever is that satellite TV is here to stay and will play role in bringing television to mass around the world?

1.2 DTH make the people expect the unexpected before: The DTH players are all geared up. Not for providing cheaper prices this time, but something as equally important if not better, which is getting new feature. This is a list some features are looking forwarded to from DTH players. Recording facility: Tata Sky Plus already has this, and now it is expected from the other players including Dish TV and Airtel DTH to start offering their viewers with an option such as this so that they could also record their favourite programs in one go and watch them later. Internet: Big TV is giving out Internet trials on their STBs as well, and it can very well be
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anticipated that soon Internet on your STB will be a reality. Especially when it comes to players such as Tata, Big TV and Airtel who already have separate Internet services going on. It shouldnt be that big a surprise if they incorporate Internet into their STBs as well in the near future. Better Games: People can connect and play games with other DTH subscribers, and games that are of decent quality none the less. there are such plans being in development way too many times, and it is only a matter of time when one actually get this on our very own STBs. Many other things: This list could go on and on and on for a long time. DTH companies are sure gearing up for the upcoming competition as well as taking steps to stay in business with the existing ones.

1.3 References:
http://www.merinews.com/article/dth-industry-in-india/155841.shtml http://www.scribd.com/doc/18454053/DTH-Industry-in-India

Chapter 2- Research Objective

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2.1 Research Objective

The major objective of the project was to study and to know about the Indian market situation of the Direct To Home industry

2.2 Non financial analysis

The following were the main objectives under the non financial analysis of the industry.
Identification & analysis of Competitive forces of the industry on the basis of Michael

Porters five force model. Identification of strengths, weakness, opportunities & threat in the External business Environment with the help of SWOT (Strengths, Weakness, Opportunities, Threat) analysis.
In-depth analysis of factors affecting the business environment with the help of

Political, Economical, Social and Technological (PEST) analysis. Service Marketing Mix/Extended Marketing Mix: Service includes seven elements, which is known as 7 Ps of service mix
External Factor Evaluation (EFE) matrix.

Comparative analysis would be undertaken to know about the offerings or the products that the particular company offers to the market and also to know their rivals and the key players of this industry.

2.3References

Malhotra Naresh K, Marketing Research An applied orientation, fifth edition, Pearson education. http://en.wikipedia.org/wiki/Exploratory_research accessed on 20th november, 2009.

Chapter 3: The current players in DTH industry are:

3.1. Doordarshan Direct Plus:
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Doordarshan was the first media player to introduce DTH services in India. Its transmission is free of cost but comes with a limitation of lesser number of channels. Some of the channels are: News channels:

India News, News 24, News Live, Total TV, Azad news, NTV Telugu, P7 News, IBN Lokmat and PTC news. Music channels:

ETC Punjabi, Music India, MH1 Music, ETC music, B4U music and 9X Music Regional channels:

Jai Hind TV, Amrita TV, Kairali TV being Malayalam, Kalaigna, Makkal and Mega TV being Tamil and Star Jalsha being Bengali. Besides these channels all Doordarshans channels such as DD1, DD news, DD sports DD saptagiri and many DD regional channels will also be there. There is a one-time and only one time fee of Rs.3000 for installing the satellite dish and the Set top box in your home after which there will not be any recurring fee every month.

3.2. Dish TV:

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Dish TV was the first private player in DTH industry to provide entertainment services. It transmits around 180 digital channels straight from the satellite to our homes. Dish tv is Indias first direct to home entertainment service that has digitalized Indian entertainment to bring the best in television viewing through the latest in digital technology. It not only broadcasts high quality programmes straight from the satellite to your home, but also gives absolute and complete control of what one watches and pays for. It is almost like having own satellite up in the sky. Dish TV is an Essel Group venture. Essel Group has a vast range of national and global business interests that include media programming, broadcasting & distribution, speciality packaging and entertainment. The businesses have close synergies in the areas of content, distribution and infrastructure. Continuing with the same path-breaking tradition, the group now brings to you a new era of digital quality TV viewing.

Packages Dish TV India offers: Dish Welcome Offer Dish Freedom Plus Offer Silver pack Gold pack Platinum pack Titanium annual pack Child pack

3.3. TATA Sky:

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TATA group launched their DTH services under the brand name of TATA sky. Their offer packages and customer services is very popular among DTH subscribers. Incorporated in 2004, Tata Sky is a JV between the TATA Group and STAR. Tata Sky DTH endeavours to offer Indian viewers a world-class television viewing experience through its satellite television service. The TATA Group is one of Indias largest and most respected business conglomerates. It comprises diversified businesses in sectors such as materials, engineering, services, energy, information systems & communications, consumer products and chemicals. The Group and its enterprises have been steadfast and distinctive in their adherence to business ethics and their commitment to corporate social responsibility. This is a legacy that has earned the Group the trust of many millions of stakeholders in measure few business houses anywhere in the world can match.

It is one of the pioneering DTH services in India. Among the first few DTH players Tata Sky was launched in 2006. Tata Sky is a joint venture between the Tata Group of companies and the Star Group. DTH service (best DTH service in India) makes use of the brand name UK owned SKY TV. Though Tata Sky is one of the earliest DTH players, you can find Tata Sky in relatively few homes in India. The obvious reason is the cost. While all the other DTH service providers (Are DTH Service Providers Tricking The Customers?) modified their pricing structure to the expectations of the Indian TV viewers, Tata Sky is yet to match the expectations of the Indian mass. It tries to survive through expensive advertisements. It is yet to penetrate the market. As more number of DTH service providers come into the market it is only going to get difficult for Tata Sky to get the market share and to penetrate further. The new players will make their services more enticing and also cheaper to get hold of the market as they enter like what Sun Direct DTH did. Unless Tata Sky reduces its cost it will find the battle really tough. It is best to do it
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now rather than wait for the new players like Videocon come into the picture. Packages TATA Sky TV India offers: Annual Mega Pack (Rs 5,500 per annum: 172 channels* + 12 Showcase movies) Base packages Super Value Kids Special pack (104 channels*) Super Saver Pack (124 channels*) South Starter Pack (75 channels*) South Value Pack (99 channels*) South Saver Pack (109 channels*) South Jumbo Pack (139 channels*) Add-On packages**

3.4. Sun Direct:

Sun Direct is another DTH player in India that mainly caters to the entertainment needs of southern India. Its offers variety of packages based upon languages like Tamil package, telugu package and kannnada package. Sun Network, India's largest media conglomerate has power packed Twenty TV Channels with the reach of more than 95 million households in India. Sun Network channels can be viewed in 27 countries including U.S.A, Canada, Europe, Singapore, Malaysia, Srilanka, South Africa,
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Australia and New Zealand. It also has Forty Six FM Radio Stations, Two Daily News Papers Dinakaran the No.1 morning Tamil daily news paper with sales of over 1.1 million copies a day, Tamil Murasu No.1 evening Tamil daily, Four Magazines, Sun Direct one of the largest DTH (Direct To Home Satellite TV service) service provider in India having more than 4 million subscribers and Sun Pictures the film division of Sun Network which produces / releases at least 8 movies every year. The response to our programmes and the viewership of our news has been phenomenal. Every single South Indian channel that boasts of a No. 1 slot among its viewers belongs to the Sun Network. Millions of people all over the world watch a channel of Sun Network. With every programme a sell-out, every single transmission digitized, every serial a hit, for millions of viewers all over the world every day is indeed a Sunday. Sun Network believes in giving you wholesome fare. Be it news or entertainment, it is there first. If it is happening south of Vindhyas, its on Sun Network.

Packages Sun TV India offers: Shine Pack Bengali Shine Pack Oriya Shine Pack J&K Shine Pack Add-on Packs: Jumbo Packs:

3.5. Big TV

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Reliance BIG TV limited is a part of Reliance Communications Ltd., a subsidiary of "Reliance Anil Dhirubhai Ambani Group" founded by the Late Dhirubhai Ambani, the Indian business tycoon and owned by his son Anil Ambani. BIG TV started operations from 19 August 2008 with the slogan "TV ho Toh BIG Ho" ("If you have a TV, make it BIG"). It currently offers close to 200 channels and many interactive ones, 32 cinema halls (i.e. Pay per View Cinema Channels) as well as many Radio channels. The company plans to increase the number of channels in the near future to 400 and begin "High-definition television" High Definition (HD) broadcast. It is the first Pan-India DTH provider that uses MPEG-4 for broadcasting. There are also plans to introduce services like i-Stock, i-News and other such interactive services in the future. Reliance Big TV surpassed the 1 million subscribers mark within 3 months of its launch, with major subscribers coming from Southern states of India. BIG TV is a DTH service from Reliance group of companies. (Anil Ambani). Big TV revolutionaries DTH viewing in India. They are using the latest MPEG 4 technology to tra Reliance is excited to present the next landmark of TV entertainment in India. With Reliance BIG TV Digital Service, one can experience spectacular entertainment, blockbuster movies, up-to-the-minute news, and your favourite programs at the click of a button. Transform your home with Reliance BIG TV Digital Service, powered by MPEG 4 technology for the first time in India. Reliance BIG TV has fantastic features like pure digital viewing experience, more channel choice, many exclusive movie channels, easy programming guide, interactive services, parental control, 24x7 Customer Service and lots more Ensure a never before viewing experience with unlimited hours of fun and entertainment for viewers.

Subscription packages: 1. Rs 1,490 plan: Free installation, 3-months free subscription, free 1-month video on demand along with 64 channels.
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2. Rs 2,190 plan: Free installation, 12-month free subscription, free 3-month video on demand along with 64 channels . 3. Rs 2,690 plan: 120 free movies and 6-month premium pack of 99 channels. 4. Rs 100 monthly subscription plan: 10 pay channels along with 10 free to air channels. 3.6. Airtel Digital TV

Airtel too recently launched their DTH services across 62 cities in India. Airtel Digital TV is alone using MPEG 4 technology for transmission of digital signals. They are currently offering two packages to subscribers namely the Gold package and the South Platinum package. Airtel Digital TV is a (Direct to Home) service from Bharti Airtel - the largest telecom operator in. It uses MPEG-4 digital compression with DVB-S2 technology, transmitting using INSAT 4CR 74E. Universal remote: Unique to Airtel. Allows customers to enjoy the convenience of one remote for both TV & DTH. ITV Services (Interactive Services): iTV is a unique and interactive service that allows a viewer to shop, plan holidays, see horoscope forecasts, book movie tickets, order a pizza, watch news, sports with on-demand facts and analysis and much more, all at the press of a button. The viewer can choose from the variety of applications based upon individual needs. These services include- iLearn, iNews, iShop, iMatinee, iTravel, iNet, iCity, iAstro, and iSports, iPizza. Recently Airtel launched a new service called iPizza that allows customers to order pizza via digital TV. Widgets: This helps the customer to get information like Weather, Stock news while watching
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TV with a single click without moving away from the TV programme being watched. PPV (Pay per View) movies: With Pay Per View movies on Aitel Live, customers can watch the latest Movies in Hindi, English and other regional languages. The blockbuster show, Hannah Montana was also featured there. The Indian DTH industry players look forward to a seven times multiplication of its market, about 40 million subscribers by 2015, from a total of 165 million pay TV households. Subscription packages:

Plan 1 - Rs.1750- channel included 88 Plan2 - Rs. 1800- channel included 131 Plan3 - Rs. 1900- channel included 140 Plan4 - Rs.2150- channel included 147

3.7. Videocon D2H:

They provide awesome digital entertainment, crystal clear pictures, ultra sharp sound and state of art technology which uses the revolutionary MPEG -4 with DVB S2. This means youll be able to notice the minutes of details on your favourite celebrity. And hear every scream, every sound. Even if it were a faint sigh. They will provide unique active services, multi lingual user interface, more movies on demand channels, radio channels, cross genre tickers and many more value added services. Their interactive Direct to Home (DTH) Services will be available through Satellite LCD, Satellite TV, Satellite DVD as well as a Satellite Box (STB).
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They bring cutting edge technology through their services.The Products i.e. Satellite LCD, Satellite TV, Satellite DVD are owned and marketed by UDCL. The DTH services and Satellite Box are marketed by BBCL subject to terms and conditions of Customer Agreement. Subscription packages: GOLD PACK DIAMOND PACK Add-On packages

3.8 References:

http://www.airtel.in/digitaltv accessed on 22nd October 2009. http://www.sundirect.in/sundth.php accessed on 22nd October 2009. http://www.bigtvdth.in/ accessed on 22nd October 2009. http://www.tataskyplus.com/ accessed on 22nd October 2009. http://www.tataskyplus.com/ accessed on 22nd October 2009. http://www.d2h.com/WSC/index.aspx accessed on 22nd October 2009. http://www.indiabroadband.net/videocon-dth/ accessed on 22nd October 2009.

Chapter 4: Porters Five Forces Model

4.1 Michael Porters Five Forces Model

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[Figure 4.1 Five Forces Analysis] Threat of Substitutes DTH faces stiff competition from the Terrestrial, Cable and IPTV. As per the industry estimates, there are 120 million TV homes, of which 71 million are served by cable and around 6 million served by DTH with the remaining taken by terrestrial transmission. As IPTV is a new entrant, there is not much data on its subscriber base. Terrestrial Television Doordarshan is the worlds largest terrestrial broadcaster with over 1400 terrestrial TV transmitters. The reach provided by this route is phenomenal with Doordarshan covering 88% of Indias geographical area. Covering the remaining 12% area required substantial capital investments which does not outweigh the benefits. The transmission was done originally in Analog mode but beginning from 2002, Doordarshan has partnered with BBC resources the consulting wing of BBC, in offering digital terrestrial television. The transmission could be received using a low cost Yagi antenna. Even with the wide reach and low cost approach that is possible with this technology, due to the lack of attractive content, we do not see it as a
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formidable threat Cable TV Cable TV currently operates in 2 modes viz. Through CAS covering cities such as Chennai, Parts of Delhi, Mumbai and Kolkata, and through Non-addressable system in the rest of the country. As seen in Fig 2, Cable TV enjoys a big share in comparison with other mediums. In case of CAS controlled areas, the subscriber has to either buy or rent the Set Top Box (STB) to see the pay channels. Of course, he can also do without that and see the 70 odd Free-to-Air (FTA) Channels. On the other hand, in areas where non-addressable system is used, all the channels are available without the necessity of any separate receiver. Irrespective of whether CAS or not, the subscriber can comfortably see the channels by paying anywhere between Rs.100 to Rs.300 per month depending on the place where he live Due to the phenomenal reach of the Cable TV, it poses a serious threat to the growth of DTH industry. Also there would be resistance from the LCOs lobby as DTH totally displaces them. Internet Protocol Television (IPTV) IPTV is a service where television signals are digitally sent over the telecommunications line. It is often presented as a bouquet of Video (IPTV), Audio (Telephone) and Data (Broadband Internet) services. With widespread adoption of Broadband in the country and the growing techno savvy population, IPTV has a potential to become a huge success. Telecom companies such as BSNL and MTNL have spotted these earnings potential and have already started with trial implementation in cities like Bangalore and Kolkata. Companies like Reliance Communications and Bharti Airtel are also planning to follow soon. IPTV takes the interactivity to a newer level. In regular mediums, all the channels are pushed to the consumer regardless of his preference. IPTV encourages a two-way request-response model where the consumer chooses the program he wants to view. Right now this medium is totally unregulated and hence there is a chance for customers being taken for a ride. Cable companies are urging the TRAI to issue a consultation paper process to include IPTV under the aegis of Cable TV act. Even if strict regulations are enforced on, we see IPTV as a considerable threat to DTH in Urban and Semi Urban areas where broadband has made its mark.
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Bargaining Power of Suppliers DTH industry relies on three major supplies: Customer premise equipment (CPE) comprising of the Satellite Dish, Set Top Box with the necessary Access Card, the Ku4 band transponders in the orbiting satellites and content. With India set to overtake Japan as Asias largest DTH by next year5, the bargaining power of Indian DTH operators with CPE suppliers have been steadily increasing. However, the availability of transponders is increasingly becoming difficult. The KU band transponder is generally provided by Astrix, the commercial wing of ISRO either through its own satellites or by leasing transponders from suppliers like Panamsat, LMI ABS and Singapores ST1. With only two domestic satellite launches between 2007 and 2010 and increasing DTH players, Astrix is in a better position to use DTH as its cash cow for the next 5 to 10 years6. Also the crash of INSAT 4C7 last year and Dutch SES New skies NSS-88 in the beginning of this year has worsened the situation of DTH players. As there is not much of regulation particularly in terms of channel pricing, acquiring content from the broadcasters is also difficult. DTH vendors are at the mercy of the broadcasters. Bargaining Power of Buyers We would take the entire broadcasting industry for analyzing the bargaining power of the buyers. With enough options to choose both from the point of alternate mediums like Cable, IPTV and Terrestrial broadcast and from the point of increasing DTH operators, the consumer is at his will to decide. Customers will continue to have a high bargaining power until DTH platforms try to differentiate them as superior players with better content and clarity Inter Firm Rivalry: With 7 operational players and, the Inter firm rivalry is quite high. The competition from state owned DD-Direct to private players is negligible from the content point of view as the number of channels offered by DD-Direct is very limited. However, DD-Direct does not charge any
21

monthly subscription fee, which poses a threat to the private players who charge monthly subscription charges. Among Dish TV, Tata Sky, Big TV, Sun TV, Airtel DTH and Videocon there is an intense rivalry exhibited by price wars and discount schemes offered to new connections. Being the First mover, Dish TV had price advantage in both the STB as well as in procuring the transponders. On the other hand, Tata Sky claims its STB offers superior DVD quality video due to its advanced STB.After that Big TV, Sun TV, and Airtel also playing big role into the industry. While Dish TV is planning to spend Rs. 850 crores9 over the next 3 years, the rival Tata Sky is willing to spend Rs.2000 crores10 over the medium term. The companies have also set ambitious targets with Dish TV aiming to reach 4.5 million subscribers in the next 18 to 20 months while Tata Sky aiming for 8 million subscribers by 2012. Tata Sky has been quite aggressive in the past by giving 1 million connections within 12 months where as Dish TV nearly took 20 months to reach the same. DTH players - Prices Provider 1 DD-Direct+ Initial Charges ( Rs) 3000 3550 2599 2990 1250 1990 2590 (In Monthly Charges ) ( Rs) 0 100 125 525 250 150 Number of Channels 33 TV + 12 Radio 85 TV3 63 TV + 8 Radio 115 [Tabel-4.1-DTH players prices]

2 Dish TV 3 Tata Sky 4 Big TV 5 Sun TV 6 Airtel DHT 7 Videocon DHT

Other than the price wars and intense competition in increasing customer base, there is also a competition at acquiring the content. Dish TV, Tata Sky and Sun Direct are part of big groups that also have popular bouquet of channels like Zee, Star and Sun respectively. The current set of litigations can be grouped into two categories: The channels indirectly refuse content for DTH operators by charging exorbitantly or mandating that all the channels of their bouquet to be transmitted when the vendor is already capacity constrained. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) is the legal body which administers such claims.
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These kind of interconnection issues affect the expansion plans of DTH providers. For example, while Tata Sky acquires 2,600 subscribers per day, the contribution from South India accounts only for 200 subscribers. This is mainly attributed to the non availability of popular regional content of Sun TV channels under Tata Sky platform. Unfortunately TRAI neither regulates the pricing of channels nor the channels that must be carried for DTH platform. However, TRAI has recently started a consultation process which would address these concerns in the near future. Threat of New entrants With already 7 players in the DTH space, threat of new entrants is relatively low. There is already enough competition which will discourage new firms to enter this business. While getting a license is relatively easy, the barriers to entry are high when it comes to pricing of CPE and getting the required transponders. There is a definite First mover advantage which can be inferred from Table 1, by comparing prices of Dish TV vs. Tata Sky. So any new entrant will face a high cost when it comes to equipment and transponders.

4.2. Refrences:

Thompson, Strickland, Gamble, Jain; 14th edition; The Five Forces Model Of Competition; The McGraw-Hill companies; Page No:51.

Chapter 5: PEST ANALYSIS:

5.1 PEST Analysis:

Political:

Current legislation home market :

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 There are certain rules and regulations for the DTH industry by govt.which are

highly affecting the industry.

Like, I&B minister said the government has already strengthened the mechanism

for monitoring DTH programs and is considering maintaining a record of the programmes rather than asking TV channels to furnish it.
The use of DTH service for anti-national activities would be construed as an

offence punishable under the Indian Penal Code and applicable law and will attract immediate termination of license. In certain quarters concerns had been raised over DTH services in the country, especially those relating to security and availability of pornographic content through such a service.
The positive legislations can give the industry to grow rapidly while some

legislation may also hinder the growth of the industry.

Regulatory bodies and processes :

Revenues for the India's television industry are expected to more than double over

the next four years, but price controls and regulations such as content-sharing for DTH operators will cap profits and force consolidation.

Entry fee and foreign investment :

There are various laws regarding the entering into the particular industry. Like, the total foreign investment in the DTH broadcasting sector shall not be more

than 49% of which the share of foreign direct investment will not exceed 20%.
This may become the obstacle in the growth of the industry.

Government term and change : At present, imported digital set top boxes attract a special additional duty at the rate of 4% as well as a countervailing duty at 8%. Together these two raises the cost of set top boxes by 12%. The I&B ministry feels that both the duties should be cut for the next five years which will help boost growth of the industry.
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Funding, grants and initiatives :

The DTH service providers are eligible for deduction of 100% profit and gains

derived by them in providing digital services for first five years and thereafter 30%of further on profit and gains for further five assessment years in block of 15 years.(financial express, June 18,2009) Such initiatives are very positive for the future of the industry.

Political factors affecting to this industry is shows the positive future of this emerging and highly competitive industry.

Economic:

Home economy situation: As people have now started to cut on their entertainment expenditure and instead of viewing movies at theatres, they prefer to stay at home with their television sets. The industry is anticipated to add nearly 5 Lakh subscribers per month during 2009

Taxation specific to product/services : The industry is dogged by four levels of taxation - service tax, VAT (value-added tax), licence fee and entertainment tax. But it gets the several grants and initiatives from the government for the rapid growth. The direct-to-home (DTH) industry is demanding a duty free regime for imported set top boxes as the industry feels that import duties on these are resulting in increase in cost being borne by the consumer and hence slowing the pace of expansion of the industry.

Seasonality/weather issues
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 The service is depending on the quality of the picture and which is depending on the waves the dish catches through the satellite. In the rainy and cloudy whether the service providers are facing the problem regarding the locating the signals. This issue become the negative point for the industry compare to the competitor the local channel provider.

Customer/end-user drivers Free offers, value-added services like,

o o o o o o

Matrimonial information Educational kits Astrology Gaming zones Job search facility cooking recopies

All the services are the motivation for the customers to get something more than just entertainment.

Except the weather issues, most of the economic factors favors the industry and shows the green signal for the future opportunities.

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Social:

Lifestyle trends:
The life style trends are based on the many factors like, income ,social

surroundings, beliefs, culture and many others.

The DTH services provide the convenience in and give the opportunity to the

viewers to select theit channels on their own. so the people who requires some addition to only just a channel in their TV and specific channels are choosing such service in behalf of the traditional channel providers.

Demographics: Demography includes many sub points inside it. Like, o Income level o Education o Age o Gender etc. Income level, age and residential are some of the important factors that affect the industry.

Consumer attitudes and opinions :

The DTH services provide something more to the consumer than the traditional

local cabal connection. People have their own priorities regarding picture quality,expenses,easy availability etc.

27

 Therefore, such all things may change the attitude of them towards the products and industry. However, we are only the evidence that the industry has got the good acceptance level from the consumers.

Media views: The success of the industry is also depending on the publicity it gets from media. It creates the impression in the minds of the potential customers and also affect their views. DTH is one of the booming industries now days and the players of it are also well known established corporate. Media story, company article, industry news affect to the growth.

Fashion and role models:

Using known personality in to the advertisement, the selling of DTH services

increases.
Like, Dish TV-Shahrukh Khan Airtel Digital TV-R.Madhavan, Kareena Kapoor etc.

The social factors, mainly the changing life style, are the favorable for the industry for further growth.

Technological

Competing technology development :

28

They have started to offer a number of value-added services such as 'movie on demand',

live recording of TV content, matrimonial matchmaking, etc.

It is also expected to have internet on DTH. Associated/dependent technologies :

The technology factor affects the association plans between the companies. Like, in the initial phase, growth of DTH industry in India was restricted because of

refusal of some television networks like Sony and Star to share their content with Dish TV as it was form the stable of Zee TV.

Information and communications: The service is depend on the technology so the users are required the regular and timely information regarding any change in the value added services,methodto recharge their accounts etc.
Proper guidance and appropriate communication can attract the customers.

Innovation potential :
As all the players are the close substitutes of each other and providing the same core

service to the consumers, the only thing that can be differentiate everyone is method to use of the technology. Customers are highly attracted by the more digital and technical products. The technological factors can be considered as both, the opportunity and the threat from the internal competition. The use of the technology can decide the future of the industry.

Conclusion:

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From the pest analysis one can draw conclusion that all the four factors are mostly in favour of the industry. Only the Technological factor has some possibility to hamper the growth. But in general, the industry is expected the bright future.

5.2. References:

http://www.livemint.com/2008/11/14234417/UBL-SAB-Miller-sue-AP-govt-on.html Accessed on 13th November, 2009. http://findarticles.com/p/articles/mi_m3190/is_/ai_66383875 accessed on 13th November, 2009.

Chapter 6: SWOT ANALYSIS:

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6.1 Introduction:
SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The following diagram shows how a SWOT analysis fits into an environmental scan.

Situation Analysis / \ Internal Analysis External Analysis / \ / \ Strengths Weaknesses Opportunities Threats | SWOT Profile

[Figure-6.2-SWOT Framework]

6.2. Analysis of SWOT: Strengths:

Advantages of proposition :
As people have now started to cut on their entertainment expenditure and instead of

viewing movies at theatres, they prefer to stay at home with their television sets. The industry is anticipated to add nearly 5 Lakh subscribers per month during 2009.

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Ever expanding user base: As this industry is in the introduction stage, many people are unaware about the After getting the recognisation, industry could cover vast number of the

use and facilities provided by the players.

population.

Competitive advantages :
They have started to offer a number of value-added services such as 'movie on

demand', live recording of TV content, matrimonial match-making, job search, games etc. This all features give competitive advantage to the industry from the traditional local cable.

USP's (unique selling points) : It means something that is the most important for differentiating particular product.
In case of this industry, High picture celerity with sound quality is the unique

features that are not available from the local cable.

Experience, knowledge, data:

The player of the industry is experienced and reputed ones. All have various strategies and availibity of funds, knowledge and customer base. Data required for the industry is also easily available like consumers preferences,

priorities and expectations from the service.

Financial reserves, likely returns :

As our one of the limitation is that the financial data is not available of the players

as the unavailability of the books of accounts, regarding the financial reserves no information is available.
As there is a huge cost associated with the establishment of the system, but after

covering these fixed costs.

32

 Each rupee will be the net profit for the firm. So the returns after covering the fixed

costs, are regular and fixed.

Marketing - reach, distribution, awareness : These factors plays important role in to the selling purpose, that in which way customers easily gate information to aware about product.

Innovative aspects :
Each players of this particular industry are the close substitutes so they must have to

differentiate themselves by providing some innovative aspects of the service. Consumers associated with this industry are willing to accept every change which add value to their service.

Location and geographical: DTH services as the technology can be used to offer DTH services in remote location, where setting up of cable networks seems impossible

Price, value, quality:

DTH system provides better values to their customers with multiple facilities,

Established itself as the prime cost-cutting tool of the day.

As customers themselves decide the channels, which they want, they can get better

value for their expenditure.

Weaknesses:

Disadvantages of proposition: The greatest disadvantages are DTH system provides poor services in cloudy atmosphere and also not possible connection for two TV sets with only one SET TOP BOXES, there is required separate STB for each TV sets.
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Lack of competitive strength:

As the main objective or core competency of all the players is same, there is a lack

of competitive advantage.
Most of the people are generally taken the decision of choosing particular service

provider on the basis of the price charged by him and noton the basis of the additional value added services.

Cash flow, start-up cash-drain:

The establishment of the service is required a huge cost for setting up the system

and other equipments.

The initial cash flow shows the negative net income as the fixed cost is very high

and required numbers of years to be covered.

Effects on core activities, distraction:

The service providers could not provide the service at the time of the cloudy

weather and rainy season. This would affect the core activities of the players negatively.

Opportunities

Market developments:
The major factors which contribute for the imminent growth are economic and

low end entry fee, free offers, value-added services, matrimonial information, educational kits etc.

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 The players can easily initiate and develop their market if they have required capital availability.

Competitors' vulnerability :
The most important vulnerable factor to fight with the competitor is reduction in the

prices.
Additional services can be considered also as the vulnerable factor which could

change the scenario of the player of industry.

Current situation: "There is a huge opportunity, as less than 5 percent of all TV homes in India are DTH,"
While there was opportunity in urban markets that have a high penetration of cable

TV, the real growth would be in smaller towns and villages that lack cable services.

Industry or lifestyle trends:

India has a total of almost 90 million households which have television. Out of

these, cable television and DTH services are accessed in about 45 million (half).
In the next few years, it is set to increase by another 10. This will then make the

Indian market the worlds biggest cable television market.

The changing life style and choice may positively affect to this industry.

Technology development and innovation: All the players are always ready to innovate their services to attract the customers.
In short time, internet will also available on the DTH service.

Geographical, export, import:

35

 Fed up with poor, unpredictable cable television across small towns and cities, people are switching over to DTH entertainment for their television at the speed of light. This can be justified because India has a varied Geography and population distribution. So cable television is not available everywhere, particularly in remote hills, villages, farmhouses etc. These are the places where the demand for satellite television is rising.

Threats
Government policy/regulations:
Government is charging higher licence fees from the players, which may hinder the

entry of the new players.

IT developments:
The biggest threat to the DTH industry and also to the television industry is from

the growth of the internet and other IT developments which may enable viewers to enjoy their daily sops, news etc. direct through internet.

Competitor intentions:
After the higher charges on licence and availability of the capital, it is very easy to

the firm to enter in the industry. The deductions and relieves provided by the government may also attract the new players.
This may make the competition stiffer for the existing plays.

Seasonality, weather effects:

The major obstacle faced by the industry is lack of the proper signals in bad

weather.

36

 Therefore, in hilly or rainy areas the industry is unable to provide the services at its

best.

Lack of possibility of continuous growth:

At present the industry is in the introduction stage, number of the people are still

remaining to be conversed by it.

But after covering the as many numbers of the people as it can, there is no scope for

the industry to grow further in the same market Even it would be difficult to attract the users from one service provider to the other because of the lack of the difference in the core competency.

6.3 Conclusion:
By studying the industrys strength, weaknesses, opportunities and threats, we can say that industry is having the strength which can overcome its weaknesses. And industry is having the opportunities which it can grab easily and enjoy the bright future by avoiding the threats. If we want to list out the major factors,

We can say that the most favoured strength is innovative aspects and price, value and quality balance.

The weakness which required to be removed is the inefficiency in telecast during the bad weather.

Opportunity which may the most favourable for the industry is innovative value added services.

The threats which may hinder the growth are highly competitive market and technological changes.

6.4 References:
http://www.quickmba.com/strategy/swot

http://www.netmba.com/strategy/swot/ accessed on 20th November, 2009.

37

http://en.wikipedia.org/wiki/SWOT_analysis accessed on 20th November, 2009. http://in.reuters.com/article/businessNews/idINIndia-36308220081104 accessed on 20thNovember, 2009.

:Chapter 7: Service Marketing Mix/Extended Marketing Mix

7.1. Analysis of 7 Ps:

Service includes seven elements, which is known as 7 Ps of service mix. DTH is one of the service provider industry, for which the 7 P analysis is as under: The service marketing mix includes:
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Product Price Place Promotion People Process Physical evidence.

Product:-

In case of the service Performance is considered rather than a Thing. When they purchase manufactured goods, customers take title to physical objects. All service organizations face choices about the types of products to offer and the operational procedures to use is creating them. In a customer-focused organization, these choices are often driven by market factors. Service marketers must always remember that customer do not buy any product. They buy attributes that are converted into benefits like other consumer Goods.

Herein case of the DTH services the core benefit the users are getting by utilizing the service is clear picture quality and easy availability of the channels which they choose. Therefore, the picture quality is considered as the product for the buyers. The fully satisfied core benefit attracts more customers. The additional services provided by the DTH providers are the additional attributes, which can retain the users. the core benefit is the most important thing considered by the consumer while he decides to experience any new service.

So the product attribute is important to generate new customers.

Price:39

Pricing is the mechanism by which sales are transformed into revenues. In many service industries pricing was traditionally driven by a financial and accounting prospective, which often used cost- plus pricing. Pricing is typically more complex in services than in manufacturing because there is no ownership of services. The inability to inventory services places a premium on bringing demand & supply into balance, task in which pricing has a key role to play. The pricing goals of service marketers vary but typically the pricing goal of the most is to maximize profits for each sale not necessarily the wisest practice. The methods for deciding prices are: 1) Cost- based pricing:Cost based pricing is to identify the labour, materials, and machine time, storage and shipping costs associated with producing a physical good cost based pricing consist the fixed costs, variable costs, semi variable costs, contribution , determining and allocating economic costs. Costs have nothing to do with value, which is established by the market and in the final analysis by the degree of customer acceptance.
2) Value based pricing:-

When customers purchase a service, they are weighing the perceived benefits obtained from the service against the perceived costs they will incur. Value based pricing consists pricing strategies to reduce uncertainty, relationship pricing, low cost leadership and managing the perception of value. Non monitory costs of service can be grouped into time costs are inherent in service delivery, physical costs, psychological cost, and sensory costs with four categories. 3) Competition based pricing:Price competition increase with I. Increasing number of competitors II. Increasing number of substituting offers III. Wider distribution of competitor and/ or substitution offers
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IV. Increasing surplus capacity in the industry. Especially when one or more of the following circumstances reduce price competition with the non price related costs of using competing alternatives are high, personalization, customization and switching costs matter and time and location specificity reduce choice. In summary, pricing in service oriented enterprises is usually demanded oriented with many sellers charging what the traffic will bear. Marketing in general is not a great strength of service oriented firms and pricing in particular may be their weakest and least developed marketing skill. It is now or never for the five DTH players as they intensify price war to grab the maximum subscribers. Almost all DTH operators are offering discounts in the form of lower or zero installation charges for the equipment besides waiving off monthly subscription fees for the first few months.
The fight is over grabbing a larger share of the estimated 10 lakh new subscribers who

are expected to get on board in one month. in 2007-08, DTH industry had added an estimated 7-8 lakh subscribers during the one month. Some companies have waived off the subscription fees for three months and some others are offering zero fees for viewing up to 141 channels during the first six months to attract new customers.
Thus because of the highly competitive environment, the industry follows the

competition based pricing model to survive in the market.

Place: How should service managers make decisions on the places where service is delivered and the times when it is available? The answer is likely to reflect customer needs and expectations, competitive activity, and the nature of the service operation.

The distribution strategies used for DTH some of the supplementary service elements may differ from those used to deliver the core product. Deciding where to locate a DTH service facility that will be visited by customers involve very different considerations from decision related to locating the backstage elements, where cost considerations, productivity and access to labor are often key determinants.
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The service place is also an important factor for attracting and retaining the customers. In case of DTH service providers, all the players have their own main head problem solving office and a contact number. The user can also communicate through e-mail and get the answers for their query in short time. The new customer can get the services by registering online o the respective sites of the companies. Like;www.dishtv.com www.bigtv.com etc.
For recharge the accounts, existing customers can pay the money to the nearest

recharge provider authorized shop.

Thus, DTH industry is a well functioning industry which provide the virtual

place and fulfill all the requirements of the users.

Promotion:Promotion is an important part of the marketing mix for many marketers. The key to successful promotion, whether it be advertising or personal selling is benefit sing the product. A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional strategy can consist of: Advertising: Is any non personal paid form of communication using any form of mass media. Like DTH industry is in introductory stage in India. So Players of this industry doing Advertising for creating awareness and to remind of their presences in to the market. DTH service providers are using this tool for promotion. They use well known personalities for their advertisements like; Dish TV-Shahrukh Khan
42

Airtel Digital TV- Kareena, Saif, R.Madhavan and many more Public relations: Involves developing positive relationships with the organization media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention. The service providers often sponsor some of the events and get publicity. Sales promotion: Commonly used to obtain an increase in sales short term. Could involve using money off coupons or special offers. In DTH industry, companies are making their efforts to create customer database with help of Sales promotion. DTH providers give free recharge services or free dish to the consumers as a sales promotion tool. Direct Mail: It is an emerging concept for promotion, in which the company direct contact with the prospective users.

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[Figure-7.1- 3 Ps] Process:

The process element of the service marketing mix is concerned with the way in which the service is delivered to the customer. This has two points of interest to the service marketer. First the inseparability characteristic of service has an important implication for how the service companys personnel deliver the service to the customer and how the customer participate in the service delivery process.

Secondly, the auxiliary aspects of the service that is added value of the service becomes an important competitive weapon in differentiating the service from competitors when customers experience the service different from the others.

The overall effectiveness of the service process fundamentally depends on how the customer use the service which reinforces the point that services have been defined as acts rather than things and this cast. Some light on the concept of process many benefit from services occur not so much as a result of what is offered ,as in the way off which it is offered

Where first introduced although advance in technology did increase the availability services, customer did not know how to use them and them where than left to work it out for them. The DTH players clearly indicate the functions done through the set top box.

The information regarding the menu tool available in the set top box and also the details regarding the recharge date are given.

People:Of all controllable variables marketing executive have at their disposal, the people factor in the service marketing mix is perhaps the least they can rely on in getting marketing mix right and the most important one they have get right. The problem lies in inseparability of the production/consumption interface, and there for, the satisfaction of not only the recipient of the

44

service, that is the customer but also providers of the service that is the companys own personal become extremely important. Service personal are present at two levels within the organization- contact personnel and support personnel. Contact personnel are those individual whom the customers see-such as wholesaler and retailer and whom the customers judge the service upon when they search for tangible clues as to the quality of service. The value they attribute to the services relies a great deal on the conduct of the contact personnel. The answer lies in internal marketing, the purpose of which is to have motivated and customer conscious dealer. Retailer are seen as internal customer and jobs as internal product, which work in an organization that should create an internal environment, which supports customers consciousness and sales mindedness among their personnel. Employees need to become ambassadors for the organization as the quality of the service and the service provides are inseparable. The more competent the customer contact personal, the better the service business client relationship will be which will culminate in the service organization receiving the positive reference. So how should the service company attract and maintain the type of desirable personnel who will leave a positive impression on customers? Use of good communication within the organization since customer contact personnel cannot be expected to perform well if they are not fully informed about what the company is doing and why. Further a service employer should apply traditional marketing tools such as market research and market segmentation in order that:

The best possible people can be employed and retained and They will do the best possible work by identifying and satisfying employees needs, wants and aspirations.

Considerations an employer needs to make regarding the company guidelines and practices would be working conditions, shift work, flexible working hours, day to day benefit, either financial or in kind holiday entitlement, training, career development opportunity, promotion prospect, career evolution , pension and life assurance. By identifying what one is able to effort to give personnel and minimum standard of benefits personnel are prepared to take one is partly
45

on the way to satisfying the personnel one would like to hire. The aim of internal marketing is to increase job satisfaction, increase productivity and decrease absenteeism and to trade personnel to enhance their skills and to encourage a customer orientation and supervise and evaluate their performance. If service organization care about both employees and customer, the pay of will be in terms of increased motivation and satisfaction, a high level of service quality as compared to the quality expected by customer and therefore customer satisfaction an in turn , hopefully, customer loyalty and increased level of business activity.

Physical Evidence:

Since a service is inherently intangible, it is important for the client to search for tangible of physical slues, which enable them to evaluate the service. Service firms must be aware that expect of company with which the consumer comes into contract with be used as a measure of the level of service that he can expect from the organization (Lowe, 1988). Physical evidence is those tangible clues which the customer may receive during the process of receiving the service, which verify either the existence or the completion of a service.

Sometimes the value of the service is also judged by the customers through the physical evidence. In case of DTH services, dish and set top box are the physical evidences.

7.2 References:

http://www.learnmarketing.net/servicemarketingmix.htm accessed on 19th November

2009

46

http://www.entrepreneur.com/marketing/article70824.html accessed on 19th November

2009

http://www.marketingteacher.com/Lessons/lesson_marketing_mix.htm accessed on 19th

November 2009

http://www.valuebasedmanagement.net/methods_booms_bitner_7Ps.html accessed on
19th November 2009

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Chapter 8: External Factor Evaluation (EFE) matrix:

8.1 Introduction of EFE matrix:
External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that a business is facing. The major difference between the EFE matrix and the IFE matrix is the type of factors that are included in the model. While the IFE matrix deals with internal factors, the EFE matrix is concerned solely with external factors. External factors assessed in the EFE matrix are the ones that are subjected to the will of social, economic, political, legal, and other external forces.

8.2 Steps used for EFE:

List factors: The first step is to gather a list of external factors. Divide factors into two groups: opportunities and threats. Assign weights: Assign a weight to each factor. The value of each weight should be between 0 and 1 (or alternatively between 10 and 100 if you use the 10 to 100 scale). Zero means the factor is not important. One or hundred means that the factor is the most influential and critical one. The total value of all weights together should equal 1 or 100. Rate factors: Assign a rating to each factor. Rating should be between 1 and 4. Rating indicates how effective the firms current strategies respond to the factor. 1 = the response is poor. 2 =

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the response is below average. 3 = above average. 4 = superior. Weights are industryspecific. Ratings are company-specific.

Multiply weights by ratings: Multiply each factor weight with its rating. This will calculate the weighted score for each factor. Total all weighted scores: Add all weighted scores for each factor. This will calculate the total weighted score for the industry. A. Social, cultural, demographic, and environmental factors... 1. Aging population: The age factor of the population can become the opportunity for the players. Various players add the value added services like gaming for the children, job searching for youth etc. 2. Per-capita income: It is one of the important factor which also can be considered as the opportunity. as for different level of the income group, company can offer various packages and satisfy the customers. 3. Cable service provider: It is the most important factor to be concentrated by the industry. It may be the biggest threat for the industry.

B. Economic factors
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1. Level of disposable income: The factor can be a threat for the industry. That can affect to overall economy. 2. Import and export factors and barriers: Government has specified certain regulation for foreign investment in the Indian DTH players, which considered as a threat as it hinders the growth.

3. Product life cycle: The industry is in the growth stage and achieving the growth at higher rate day to day. That indicates the opportunity to grow at faster rate.

4. Government spending: Government offering grants to the booming industry in terms of relief in the taxes in initial years and other technological and R&D aspects.

5. Barriers to market entry: Indian players are not facing any barriers to enter into the market That is the great opportunity for the industry to grow.

6. Product differentiation: All the players are the close substitute providers that also considered as an opportunity to innovations. But great threat for the existing players from one another and also from the new entrants.

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7. Level of competitiveness: The industry is highly competitive and the structure is considered as opportunity for new entrants.

C. Political, government, business trends & legal factors... 1. Internet and communication technologies: The growth of the internet can be considered as the threat foe the industry. as the movies, songs, news and even the daily sops are available on the internet.

2. International trade regulations: The total foreign investment in the DTH broadcasting sector shall not be more than 49% of which the share of foreign direct investment will not exceed 20%.which is threat for the industry.

3. Taxation: The DTH service providers are eligible for deduction of 100% profit and gains derived by them in providing digital services for first five years and thereafter 30%of further on profit and gains for further five assessment years in block of 15 years.(financial express, June 18,2009)

This is an opportunity for the industry to attract the new players.

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8.3 EFE EVALUATION:

Opportunities/Threats Rate weightage Weighted score

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Opportunities

Age of population Per capita income Product life cycle Govt. Spending Level of competitiveness Taxation

0.07 0.15 0.04 0.06 0.22 0.10

2 3 2 3 3 2

0.14 0.45 0.08 0.18 0.66 0.20

Threats Threat from cable service provider Level of disposable income Import & export Barriers International trade regulations Total 0.15 0.12 0.04 0.05 1.00 3 3 2 1 0.45 0.45 0.08 0.05 2.74

[Table-8.2-EFE Matrix evaluation] 8.4 Conclusion: By studying the EFE matrix, we can see the industry is perusing strategy effectively capitalize opportunity, as indicated by rating of four. The total weighted score of 2.74 that indicates the industrys is above average. In its efforts to pursue strategy the capitalize on external opportunity and avoid threats.

8.5 References:

http://www.maxi-pedia.com/EFE+matrix+external accessed on 20th November 2009. http://www.soopertutorials.com/business/strategic-management/2351-apple-externalfactor-evaluation-efe-matrix.html accessed on 20th November 2009.
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http://www.mba-tutorials.com/strategy/76-the-efe-matrix-external-factor-evaluationmatrix.html accessed on 20th November 2009.

Chapter 9: Challenges Challenges Faced by Industry:

Policy and Regulation
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Being a nascent industry, there are lots of teething issues with the current policy framework and the way it is regulated in reality. Lack of exclusive content In the global DTH market, competition is mostly on providing niche content. In India, TRAI does not allow a broadcaster to offer content exclusively to a specific player. Hence content differentiation as a USP is not possible currently in the Indian scenario. TRAI has clearly indicated that exclusivity can be provided only when DTH market matures and there is perfect competition in the market place. But DTH operators are feeling that without content differentiation, the competition can only be on price which may even cannibalize the industry. The rule of Must Carry DTH operator is obliged to carry all the channels provided by every broadcaster on a non-discriminatory basis. However, with the capacity constraints in place, this is not feasible. So in cases, where the operator is willing to broadcast only the popular channels, the broadcasters either deny giving the entire bouquet or charge prices for the complete bouquet. The litigations showed in Table 2 shows the extent of problems cropping up due to this clause. Operators like Dish who have more transponders and operators who have a cable company backing like Sun Direct are supporting the Must carry clause where as transponder-scarce new entrants like Bharti Airtel are age Cap on Foreign Investment As per the current policy, the total foreign equity including FDI/NRI/OCB/FII cannot exceed 49% and within that FDI component cannot exceed 20%. This would reduce the interest of foreign investors as they cannot get a controlling stake in the company in spite of a heavy investment. On the contrary, up to 74% of foreign equity, with no limit on FDI, is allowed in the Cable industry. With DTH being a capital intensive industry, these limitations hurt the expansion plans of the cash constrained operators. Cap on Cable Company/Broadcaster Investment In order to ensure a fair competition, the current regulations restrict the cap on
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Broadcasting/Cable company investment in the DTH venture to 20% and also prevent the DTH firm to hold more than 20% in a Broadcasting/Cable company. As one can see, DTH operators are able to overcome this challenge by spinning of new companies. But removing this rule would reduce the bureaucracy involved and also reduce the content cost for an operator due to the synergies created between him and the Broadcaster.

Interoperability issues TRAI mandates an open architecture for STBs to ensure technical interoperability but in reality this is not being implemented. However, with increasing consumer awareness, the dilution of this rule would soon be corrected. In addition, in the recent consultation paper, TRAI also wants to try out the commercial interoperability (The ability to return a purchased STB or lease a STB) route. Although this is good from the consumer point of view, DTH operators cannot build a switching cost for the end user.

Non-availability of Transponders A Ku transponder can be used for 12 to 20 channels depending on the compression (MPEG 2 or MPEG 4) technology used in the satellite. A DTH operator will at least need 5 to 8 transponders to compete in the market. Right now, ISRO has INSAT 4A and INSAT 4B in the orbit with 12 Ku transponders each. The next in the line is INSAT 4CR due in September 200715, which will open up another 12 Ku transponders. INSAT 4G will be launched in 2009-10 with a capacity of 18 Ku transponders. Also with the launch of INSAT 4G, ISRO would have used up the entire spectrum that was allotted to it by WARC, ITU16.Even with 54 transponders by 2010, with 7 operators, the demand-supply gap is huge with each operator getting approximately 150 channels. Also if any of these launches fail like INSAT 4C, it may spoil the plans of DTH operators. Current regulations stipulate a DTH operator to use only Indian satellites or in case of foreign satellites, they have to be approved and leased by ISRO.

Quality of Service Issues

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They are couple of QoS issues which currently affect the DTH operators. They are Technical Glitch - Rain FadeBy definition, Ku band signals get weakened by rain and snow. This results in reduced image clarity and sometimes total cut-off. This is a fundamental problem with the design of the transmission frequency. In India, people are glued to their TV soaps and sports events like Cricket matches. So even a tiny service disruption, during these events is seen as a major weakness of the DTH platform. A search on Indias popular consumer forum Mouthshut.com reports that only 28% recommend Dish TV 21and 57% recommend Tata Sky22. Even with the skew for errors and incorrect data, this shows the low satisfaction levels of consumers. Some of the glaring complaints are Poor after-sales support, Removal of channels off air without notification, Open-ended contractual agreements favouring the operators and Lack of grievance cells.

Technical Glitch - Rain Fade By definition, Ku band signals get weakened by rain and snow. This results in reduced image clarity and sometimes total cut off. This is a fundamental problem with the design of the transmission frequency. In India, people are glued to their TV soaps and sports events like Cricket matches. So even a tiny service disruption, during these events is seen as a major weakness of the DTH platform.

Poor Levels of Service A search on Indias popular consumer forum Mouthshut.com reports that only 28% recommend Dish TV 21and 57% recommend Tata Sky22. Even with the skew for errors and incorrect data, this shows the low satisfaction levels of consumers. Some of the glaring complaints are Poor after-sales support, Removal of channels off air without notification, Open-ended contractual agreements favouring the operators and Lack of grievance cells.

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Chapter10: Findings & Conclusion Findings & Conclusion:

The major findings of the Direct-To-Home service industry are as follows:

DTH customers base stands up to 14 million whereas still total cable TV households subscriber number is 75 million. That clearly shows the future growth perspective of this industry. As per the available reports and projections, the DTH market is likely to grow by 30% by 2012.

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The major problem which the industry is facing is its inefficiency in providing the core services of clear telecasting in the rainy and cloudy weather.

The industry is highly competitive in nature, which requires the innovative strategies for survival and to get positive returns.

If we consider the recent scenario of economic condition, DTH industry is one of the industries which is upbeat from the recession.

Change in the life style of the population and changing scenario of the per capita income of the consumers are the factors which affect the industry very closely and we can find the positive effect of these factors.

Government is willing to provide relaxations in terms of deductions in tax in initial years to the players of this industry, which increase the chance of the new entrants.

The growth prospective of the industry is limited to the population. As once the industry covers the total population, there is no way for increase the number of the subscription from the same market.

The industry requires huge amount of the capital expenditure foe developing the technological systems because of which the companies have to suffer from the negative returns in the initial years.

Every new innovative service of one player is big threat of the other players. To survive in the market, players have to always keep ready themselves for providing something new to retain the existing customers and attracting new customers.

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Chapter11: Recommendations
Recommendations:
We have formed following suggestions on the basis of the information gathered on the DirectTo-Home Service industry. These suggestions are as follows: As industry is highly competitive, the players should always try to take the first mover advantage. This can give them strong position in the minds of both existing as well as the new customers.

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The customers of this industry are highly price elastic. They can move to the other company as the same service they can get in fewer prices. Therefore, companies should take into consideration the cost of every innovation that it should not increase the price from certain level.

Such technology should be developed through which one set-top box and dish antenna can be used by more than one customers this can reduce the fixed cost of the industry.

To retain the customers, the company should provide active customer care facilities as well as provide total information to the customer which they need like regarding packages, recharge amount etc.

The only different between the local cable service and DTH service are value added services and picture quality. These two should be maintains by the service providers.

The industry should develop the technology that provides the good picture quality in bad weather also.

Chapter12: Limitations
Limitations:
We have faced the following limitations while preparing this project. Because of the time constraint we could not perform the in depth study and analysis of the particular industry. As the unavailability of the financial statements of the companies, we are not in position to undertake the financial analysis of the industry.
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All the informations are totally based on the secondary data and we have not performed the primary research for the project.

In the External Factor Analysis the weights are given by the best information regarding the industry available to us.

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