Digital TV growth in India driven by rural market

According to the demographic study done by TAM on the digital platform, non-metros have seen a significant growth in digital TV penetration

Pay-Direct-to-Home (DTH) is penetrating rural India in greater measure as the share of pay-DTH has almost doubled in rural India, as compared to 2008. As per a study known as ‘TAM Annual Universe Update –2010’, done by Television Audience Measurement Group, TAM, along with its parent companies—AC Nielsen and Kantar Media Research/IMRB, the estimated total number of TV households in India is about 135 million, out of which 80% of TV households in India now have a cable & satellite (C&S) connection and among these one in every five households have a digital connection. Digital connection involves reception of TV signals through a set-top-box, (STB), either through DTH or through cable. The DTH service is growing fastest and has been higher across platforms, whether it is metros or even smaller towns.

Both urban and rural digital growth is mainly coming from pay-DTH; the growth rate of the same is specifically higher in rural areas. The share of pay-DTH among all DTH households has been 86% for urban compared to 64% for rural areas.

But if we compare the statistics in 2008, the growth in the digital segment in the rural sector was 34%, in 2009 it was 49% and in 2010 it was 64%. What prevails over everything else is that DTH has been observed as the growth provider for digital TV in both strata, whereas cable STB penetration remains stable across urban and rural India.

TAM’s spokesperson told Moneylife that the agency, along with its parent companies, has been active on conducting this study to give a better perspective on the industry. “This is TAM’s regular annual study and we have been doing this for the past four years. Our definition of ‘digital’ is that any home which has an STB has DTH services. Through this study we try to give the industry an understanding of the current television landscape. Broadcast is going digital in India and what we are trying to do is get a clue from where exactly is the growth coming, whether it is the rural or the urban market. The rural market has been responding fantastically compared to the urban one,” said the TAM spokesperson.

According to the statistics provided by the report, Maharashtra, Gujarat, Uttar Pradesh, Madhya Pradesh, and Delhi have performed better with a higher growth rate than the all-India figures for TV and C&S (cable and satellite).

According to the demographic composition studied by TAM on the digital platform, non-metros have seen a significant digital growth, considering that all-India digital growth has been around 11%. TV, C&S and digital segments grew by 9%, 11% and 54% respectively per year, as per the TAM report, where growth has been primarily driven by non-metro markets. TAM’s spokesperson added, “What the Indian landscape is seeing is the co-existence of C&S and digital on the same platform, which is marvellous.” According to industry sources, the DTH story has been fairly optimistic, as the industry added about 12 million customers in the first five years but in the last one year the industry has added 10 million more customers. Therefore, today the total DTH market is around 22 million. Airtel, which has around 2.5 million customers for its DTH service, said that rural India is an important market, “It (the rural market) has played a substantial role in our growth in DTH services in the last one year or so.

Increasingly, we find that over 60% of our customers come from outside the top 300 towns in India.”


DTH has become popular as it always gives the consumer a variety to choose from and pick accordingly. Considering that there are almost 10-12 hours of power cuts in rural areas, it makes it easier for the population to access their favourite programmes or daily soaps. All they need is a small generator and their digital TV will work. TAM’s spokesperson also suggested, “There is always an advantage of getting to know the rule of demand and supply. Consumers will always have the power to demand for TV channels as per their convenience compared to cable services, which offer only selected channels.”

Vikram Mehra, chief marketing officer, Tata Sky, told Moneylife, “Yes, we see huge potential in the rural market. Around 50% of our volumes come from outside the top 50 towns in the country. We also have plans to launch products that will cater to only rural areas.”
 

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SJVN prices IPO at top end; Jaypee at bottom

Both offers will issue shares to retail investors and employees at a 5% discount to the issue price

Two companies priced their initial public offers on Monday at the opposite end of their indicated band, company and sources said, showing investors were reticent to back high-priced share sales, reports PTI.

State power utility SJVN Ltd (earlier known as Satluj Jal Vidyut Nigam Limited), which raised $240 million, said in a newspaper advertisement it set the price at the top end of the Rs23-26 share range.

The IPO was the first share sale by the government in this fiscal year that started on April 1 and was covered 6.6 times when it closed on 3rd May.

Institutions had bid almost nine times their allotment, while retail investors bid three times their quota.

On the other hand, private-sector road builder Jaypee Infratech raised about $502 million after the deal was priced at the bottom of its Rs 102-Rs117/share range, according to sources with direct knowledge.

The company, a unit of construction firm Jaiprakash Associates, had received most bids at Rs102 and was covered 1.24 times.

Jaypee Infra is developing the 165-kilometre, six-lane Yamuna Expressway in Uttar Pradesh at a cost of $2 billion.

The expressway will connect Noida, near Delhi, with Agra, where the Taj Mahal is located. The company plans to develop real estate of about 25 million square metres along the expressway.

Both offers will issue shares to retail investors and employees at a 5% discount to the issue price.

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No buyers for electric two-wheelers in April

After declining about 89% during FY10, electric two-wheelers failed to get a single customer in April 2010, raising questions about their future

According to the Society of Indian Automobile Manufacturers (SIAM), electric two-wheelers are dying a slow death. During April 2010, not a single electric two-wheeler unit was sold in comparison to 594 units sold last year.

Last month, Naveen Munjal, president of the Society of Manufacturers of Electric Vehicles (SMEV), had said that the state of affairs of the electric vehicles (EVs) industry is very poor. "The industry will not survive very long, unless there is government intervention. We need government support," he said.

Sales of electric two-wheelers have been on a downward journey for the past few years. During FY10, sales for electric two-wheeler tumbled 89% to 3,001 units from 26,445 units a year ago.

According to a PTI report, the Indian government has been contemplating a policy for EVs in the country, for which an inter-ministerial group was conducting a feasibility study.

Currently, 4% excise duty is levied on production of EVs, while the components for EVs come under 10% excise duty net, which the manufacturers are urging the government to waive. The import of EVs attracts 14% duty and there is a 4% duty for import of parts.

On the sales front, while Delhi, Rajasthan, Uttarakhand and Lakshadweep do not levy any sales tax, other States charge 4%-15% sales tax or value-added tax (VAT).

The industry can create a niche for itself in three to five years, but with government help, it can be done much faster, Mr Munjal added.

The size of the EV industry is pegged at about 85,000 units annually. The market is dominated by Electrotherm India Ltd and TVS Motor Co Ltd. According to media reports, Mahindra and Mahindra, the country's largest utility vehicles maker, is also planning to launch an electric variant of its current scooters, ‘Rodeo’, ‘Duro’ and ‘Flyte’.
 

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COMMENTS

k Kuchroo

7 years ago

if a bike is with a price tag of rs 5000 it will be run away success.but our industry is lead by leaders like Rahul Bajaj(who intialy rubbised nano effort)Munjals cannot see beyond some duty or some tax offset

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