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Competition growing, Tata Sky, Dish TV spat intensifies

Tata Sky complains about Dish TV's offer of free set-top boxes in an annual package of Rs 3,990 to the Monopolies and Restrictive Trade Practices Commission, reports Saurabh Turakhia.
Hindustan Times | By Saurabh Turakhia, Mumbai
UPDATED ON JUN 03, 2008 10:48 PM IST

The monsoon is just around the corner, but for now, it is raining offers in the direct-to-home (DTH) television space, giving consumers more choice and value for money, mainly because new entrants are forcing incumbents Dish TV and Tata Sky to reach out more to retain and increase their subscriber base.

Both players already wooing consumers with attractive deals and chances are that these will get sweeter with as many as three players—Videocon, Reliance (Anil Ambani group) and Bharti—set to enter the market. The existing players are now involved in a fight that sees each of them making allegations against the other.

Dish TV was the forerunner in the campaign to grab customers with an offer of free set-top boxes in an annual package of Rs 3,990. Tata Sky complained about the move to the Monopolies and Restrictive Trade Practices Commission and a hearing is pending.

A Tata Sky executive explained the company’s position, “The monthly subscription charges for Dish TV are about Rs 300 and when a consumer pays upfront, there is a practice of giving two months’ subscription free. Therefore, for Rs 3,000 (300 x 10 months) one should get the whole year’s subscription--the extra Rs 1,000 is clearly towards the hardware or the set-top box.”

Dish TV’s Managing Director Jawahar Goel said, “They had filed a complaint for a stay before the MRTPC, New Delhi, on May 30 2008, which has not been granted by the commission after hearing both parties. The next date of hearing is July 11.”

Tata Sky has reacted by reducing monthly subscription charges and is also giving consumers the flexibility to include or drop premium sports channels instead of paying for them throughout the year. Subscribers opting for premium channels will have to pay more, but those not interested need not pay anything. The subscription charges go down from Rs 300 to Rs 260.

However, Dish TV claims the move is misleading. “It is a price increase for the poor Tata Sky subscribers. For apple-to-apple content, they will now have to pay Rs 45 per month more to enjoy the same channels. The ‘removed’ channels have been separately priced as Rs 40, Rs 30 and Rs 15, respectively, for the ESPN channels, Ten Sports and the BBC channels,” company executives said in a communication to Hindustan Times.

When contacted, Vikram Mehra, Chief Marketing Officer of Tata Sky, said, “We realised that viewers not interested in premium channels should not pay more to subsidise the interested viewers. So, the price has gone up for genuine viewers, which is fair. We are offering more choice to consumers instead of asking every consumer to pay for the entire package, even if he or she is interested only in a few channels.” Mehra also pointed out that while Tata Sky sold its set-top boxes, Dish TV gave them on rent.

As the dogfight between the existing players gets intense, the new players are doing their homework. Videocon is understood to have readied an aggressive plan ahead of its launch in August, although reliable sources insist the commercial launch may not happen so soon.

“The space has become very competitive because there are so many DTH players in India, which is the only country where you have five of them. In all other parts of the world, there are only two players,” observed Anil Khera, CEO, Bharat Business Channel, Videocon’s media arm.

Talking about interesting deals planned with distributors and dealers, he said: “We are planning to offer LCD television sets for demonstration at subsidised rates to our dealers. Once they complete 100 connections, a 32-inch LCD television set will be as good as free for them.”

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