India and Indonesia rank amongst Asia’s most promising growth markets for DTH. However, while India is enjoying a steady expansion, the trajectory in Indonesia is falling short of its potential.

Two major hurdles in Indonesia, an addressable market of 18-20 million pay-TV homes, are rotational churn – where subscribers switch between operators – and the practice by some platforms to keep non-paying subs connected.

“These are structural problems and they can be solved only with the co-operation of the channels,” said Rudy Tanoesoedibjo, president & director of the country’s biggest pay-TV operator MNC Sky Vision, speaking at APOS 2015.

The biggest brake, however, comes from piracy, Rudy noted. His company is currently involved in 36 litigation battles against the rampant threat.

Indian operators, meanwhile, are confident that the latter stages of the government’s cable digitalization plans, which have been pushed back by a year, will further energize subscriber growth.

“As digitalization rolls out, we are hopeful that a large number of consumers will move to DTH, because analog cable is a little less organized in Phase III and Phase IV,” opined Harit Nagpal, MD & CEO of Indian platform Tata Sky, also speaking at APOS.

India’s four lead DTH players will soon turn cash-flow positive, Nagpal added, which will enable them to garner the funding to spur growth.

“On a 10-12% churn, the life of a customer is seven to eight years, maybe,” he elaborated.

“If the payback is three years, then you have about six to seven years’ cash life with the customer. Hence, the investor will not mind paying for the gross adds.”

HD, OTT & VOD

Operators are also exploring other ways to boost subs and Arpu. HD, for instance, presents both a huge opportunity for DTH in both markets, as well as a host of challenges.

India will have at least 100 HD channels within the next 18 months, while 80% of new TVs sold have HD panels, noted Anil Khera, CEO of Indian operator Videocon d2h.

“For a platform, the biggest challenge in carrying HD is the limitation of the satellite bandwidth,” he said.

Nonetheless, the US$1 cost difference between the cost of an HD and an SD set-top box (STB) could encourage DTH players to upgrade.

“Considering these factors, seeding an HD STB at the time of acquisition is a good proposition,” Khera said. “We are also looking to phase out SD STBs completely, but it might take another year or so.”

Going forward, 50-60% of Videocon d2h’s new subscriber acquisitions will be HD, Khera said.

Echoing similar sentiments, Rudy also detailed his company’s plans to embrace HD.

“By the end of this year, I think we will be able to move to Mpeg-5,” he said.

"The question is what you will do with the additional capacity. There has to be a balance between quality and quantity. In our case, we will offer more HD channels.”

At the same time, DTH operators are looking to offer more value-added services, to stay relevant in an increasingly connected world.

“If there is any new technology that can deliver content faster and cheaper, then it is a threat,” Rudy said. “So even, DTH operators need to expand to newer means of delivery such as OTT.”

MNC Sky Vision already has an authenticated OTT offering and is planning to launch standalone OTT services soon. At the same time, MNC Sky Vision will soon deploy FTTH services to complement its DTH offerings.

For better monetization from VOD services, Nagpal suggested collaboration with studios and experimenting with new pricing models.

“On day one, you tell me that it has to be released only to 500 people and I have to charge Rs5,000 for it,” he proposed. "Let’s try. You can always withdraw.”