Dish TV, Videocon d2h and FreeDish. These were the three names that dominated India’s DTH sector headlines in 2016. The Essel Group’s Dish TV India is likely to forge the mother of a merger, (if permitted by shareholders and government departments) with another fast-growing rival -- the Dhoot family led Videocon d2h even after denying it throughout the year.

Further Vidoecon d2h was the second player in the Indian television carriage ecosystem that reported a net profit after tax or PAT– this was for the quarter ended 30 September 2016 or Q2-17. The other player that had started reporting PAT much earlier was Dish TV.

And, the public broadcaster Prasar Bharti-owned FreeDish increased its capacity allowing the number of channels to grow from 80 to 120 to reach India’s hinterlands and hence generate larger subscription numbers.

As per the last available exact data from a government website, the total number of active DTH subscribers in India was 55,981,376 as on 31 December 2015. The number of active DTH subscribers of Airtel was 11,343,424 with a market share of 20.26 per cent of the total number of active DTH subscribers in the entire country; the number of active DTH subscribers of Dish TV was 13,952,866 with a market share of 24.92 per cent of the total number of active DTH subscribers in the entire country. Among all the pay DTH Operators in India, Dish TV had the largest number of DTH subscribers as on 31 December 2015 and was the market leader.

The number of active DTH subscribers of Reliance was 1,786,705 as on 31 December 2015 and its market share was 3.19 per cent of the total number of active DTH subscribers in the country. Among all the DTH Operators in India, Reliance had the smallest number of DTH subscribers.

The number of active DTH subscribers of Sun Direct was 5,698,544 as on 31 December 2015 and Sun direct had a market share of 10.18 per cent; the number of active DTH subscribers of Tata Sky was 12,045,410 which had a market share of Tat Sky was 21.52 per cent; the number of active DTH subscribers of Videocon D2H was 11,154,427 and its market share was 19.93 per cent of the total number of active DTH subscribers in India

With rise in disposable income and increasing number of digital pay-TV households, India is the most compelling market for DTH services. With around 28 lakh or 2.8 million subscribers added in the first quarter of fiscal 2017 (Q1-17), DTH households at a gross level crossed over 9 crore or 90 million by 30 June 2016 as per TRAI data.

The DTH industry in India has added about 14 lakh (1.4 million) active subscribers in the quarter ended 30 September 2016 (Q2-17, current quarter) as compared to the immediate trailing quarter (Q1-17). The number of active DTH subscribers in the country increased to 6.19 crore (61.9 million) as compared to 6.05 crore (60.5 million) in Q1-7. TRAI had reported 4.05 crore (40.5 million) active subscribers for the corresponding year ago quarter Q2-16.

The highly fragmented Indian television carriage industry witnessed a consolidation of sorts. The proposed Dish TV and Videocon d2h merger seems to indicate the way ahead in the DTH space. The merged entity would have some 2.64 crore or 26.4 million subscribers, which is approximately 45 per cent of active Indian DTH subscribers. Long-term benefits of the merger synergies could negate potential short-term apprehensions, analysts felt.

The growth of OTT and VOD services on the other hand has been modifying the dynamics at the higher end of the home entertainment segment. Of the 16.8 crore or 168 million TV households, only around 9 lakh or nine million Indians are HD subscribers. Services such as Amazon Prime, Netflix, Hotstar, Voot and Eros Now, etc may attract DTH subscribers owing to competitive prices for wider and better content including international dramas and shows.

On the whole, however, the DTH sector slackened in subscriber numbers with the government’s mandate to push ahead with digitisation of television not being adhered to by cable TV operators who stalled its progress with legal challenges. Looking at the status quo, the powers that be were left with no option but to push back the sunset for the final phase of digitisation (DAS IV) by three months from 31 December 2016 to 31 March 2017. A few industry experts feel that this could be pushed back further to 30 June 2017 and maybe even to the end of calendar year 2017. Delays will only result in retardation of growth of the carriage industry and hence affect the rate of implementation of improved services for the viewers.

The I&B ministry had broadly accepted TRAI recommendations to increase DTH licence duration to 20 years and for paring the annual fee to eight per cent of adjusted gross revenue (AGR). Some of the regulator’s ideas however lead to consternation. DTH and Cable TV operators had opposed a very appropriate TRAI move to introduce interoperable set-top boxes allowing users to change their service providers without having to change their dishes or STBs. Despite the expected churn that such recommendations are sure to usher in, over the long run, customer satisfaction is likely to be the only yardstick that will determine growth or fall of a service provider.

But is inter-operability possible? Here is the DTH players take on this: DTH players, six of whom pay government Rs 800 crore as licence fee per year in addition to non-refundable entry fee of Rs.10 crore, said that it was not feasible DTH players have invested around Rs 20,000 crore in STBs. Asia’s industry body CASBAA said that even full STB interoperability cannot ensure technical interoperability of services. It also believes that regulator-imposed technical interoperability requirements will impose large burden on Indian consumers and industry players and risk stifling innovation in development of new features.

Let us see how these players are placed in the ecosystem, how they have performed, while bearing in mind that TRAI has released numbers only up to 30 June 2016. Publically available information is limited to three entities that have reported their numbers until 30 September 2016 at the time of filing this report. In alphabetical order, they are: Airtel Digital TV services or Airtel DTH, a segment of the Indian Telecom major Bharti Airtel Limited, Dish TV India Limited (Dish TV) and Videocon d2h Limited or Videocon d2h.

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