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Patna and the DAS conundrum

For years, Patna’s television viewers were charmed by local cable TV service providers. The city was not made a honey pot for national MSOs. Control rooms mushroomed, young men found a livelihood in cable TV, the sector grew and there was no pressure on anybody to change the continuity in terms of cable TV rates.

The peculiarity of the Patna market is that it did not have any national MSO operating in the city till the government announced its schedule for cable TV digitisation. After a long era of independent operators, it turned into a duopoly market with competition prevailing between two local entities, Maurya Diginet Pvt Ltd and Darsh Digital Network Pvt Ltd.

Peculiarity of Patna market

• Low ARPU explains why DTH has not succeeded.
• LCOs did not focus on raising ARPU as they were virtually not paying MSOs.
• MSOs were looking at carriage revenues.
• No national MSOs in the pre-DAS era.

In August 2012, national MSO Siti Cable entered by acquiring controlling stake in Maurya Diginet Pvt Ltd, which was a merged entity of 19 independent operators (now 18) who used to run their control rooms. The JV, named Siti Maurya Cable Net, was created for rolling out digital cable in Patna.

Almost a year later, on 24 March 2013, GTPL set shop in Patna. Thus, three MSOs are servicing Patna, which, according to 2011 Census, has a population of 1.68 million.

Siti Maurya is the clear market leader and has seeded 1,22,457 active set-top boxes (STBs), according to data provided by a government official till 31 March 2014. Darsh comes next with 82,279 active STBs. Though subsequent STB deployment data is not available, no big market shift could have taken place as by then truce had set in among the MSOs.

How MSOs stack up


Cable enjoys dominant share

In the low-ARPU cable TV market of Patna, DTH service providers have been at a disadvantage when it comes to mopping up subscribers. It is no surprise then that they are almost one-fifth the size of cable.

According to our estimates based on feedback from the industry, MSOs have deployed around 290,000 STBs compared to DTH’s 60,000. There is no reason to believe that the market dynamics will shift. It is only when ARPU starts climbing some distance will we see a real fight emerge between cable and DTH.

Share of the market

Agra research 02
ARPU and size of the market

Cable TV bills in Patna have stayed flat for a long time. In the past, LCOs showed no appetite to charge more from their subscribers, while MSOs eyed carriage fees from broadcasters. Now both feel the need to cultivate subscription revenues.

The figures are telling. According to TelevisionPost.com estimates, the annual subscription revenue collected by cable operators has climbed from Rs 45 crore (Rs 450 million) in the pre-DAS regime to Rs 54 crore (Rs 540 million). This is set for a further rise to Rs 61 crore as net ARPU moves to Rs 175 a month.

Carriage revenue for MSOs is shrinking. Our estimate is that it would have dropped to Rs 14 crore (Rs 140 million) from Rs 18 crore (180 million) in the pre-DAS era.

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