Dish TV - Largest Player in India

Recently, Media Partners Asia, a media industry consulting firm published a report, in which it projected that India will be the largest DTH market in the world by 2015. MPA also believes that the 6 player market as it currently stands is ripe for consolidation.

In this scenario, it is worthwhile to look at the industry, and try to identify companies which might be potential multi-baggers.

Dish TV
Dish TV is India's largest DTH player, with a 35% market share of subscribers. the company already has over 7 mn subscribers, with ARPU at ~ 140 and growing. It is expecting to hit 10 mn subscribers by end of FY '10.

Industry Outlook
The DTH Industry is witnessing exponential growth. As mentioned earlier, the MPA has projected that India is poised to become the world's largest DTH market by 2015. The industry has high Entry barriers on account of the Government having given licenses to only 6 players. MPA believes that even 6 players in the industry is untenable, and that the industry is poised for consolidation.


Dish TV is the only pure-play listed DTH player. All the other players are listed through their parent companies. Being the first player to enter the industry, it is also the first to become EBITDA positive. It is expected to be first player to be PAT positive (in 2-3 years), with high free cash flows and low requirements for re-investments.
The same growth pattern has been observed in the global DTH industry as well.

Dish TV has the lowest subscriber acquisition cost in the industry. It has a major presence in Tier - 2 & 3 locations.

Recently, the company received 100 mn USD investment from Apollo Management, which the company plans to utilise to significantly expand its customer base.

Outlook
The DTH segment is expected to witness exponential growth and is following the same lifecycle as the telecom sector. Analysts predict great traction for movement from regular cable connections to digital platforms among subscribers.Only competitor segment is the Conditional Access System, which has not really taken off.

The DTH industry is currently lobbying with the Government to move to royalty share structure rather than royalty structure, and this is expected to turn around the fortunes of the industry, just as the New Telecom Policy 1999, revolutionised the telecom sector.

The company has strong backing from the Zee Group, which is one of India's largest media companies.