Sun Direct planning major expansion across country

August 16th, 2008 - 3:53 pm ICT by IANS  

By Venkatachari Jagannathan
Chennai, Aug 16 (IANS) Sun Direct TV Pvt Ltd, a leading direct-to-home (DTH) service provider in south India, is set to replicate the success story in the other parts of the country. “In 45 days, the company will start its service first in Assam, Orissa and West Bengal. We will then go to Uttar Pradesh, Delhi, Punjab, Madhya Pradesh, Maharashtra, Gujarat, Himachal Pradesh and others,” Sun Direct chief operating officer Tony D’Silva told IANS.

At a time when DTH service rates were perched high, the 80:20 joint venture between the Kalanidhi Maran family and the Astro Group of Malaysia brought it down through innovative packaging in southern India.

In 200 days, Sun Direct zoomed to touch one million subscriber number offering a DTH connection for Rs.1,999 (Rs.1,000 one time installation charge and Rs.999 as annual subscription) for all popular channels.

It offered the set-top-box, dish antenna and other customer premise equipment free when its competitors sold or rented them.

Sun Direct also adopted the advanced MPEG4 technology offering better compression and signal quality while Tata Sky and Dish TV are still on MPEG2 technology.

“We add around 200,000 subscribers per month in the south and the target is three million by the end of this fiscal. Our customer-base is more than the combined numbers of Tata Sky and Dish TV in the south,” D’Silva said.

“We hope to break even in four years subject to the changes in the regulations and the behaviour of US dollar as hardware are imported,” he added.

Listing out Sun Direct’s success elements D’Silva said: “Packaging, pricing and distribution are the three major challenges in this business. Cracking that will get you going.”

The first two elements depend on understanding the viewer preferences.

“Nearly 70 percent of the television viewership is for regional content and Doordharshan is strong in many places. Secondly, the distributor should be near the customer. With 300 distributors in south our network is very intensive,” he said.

Though he did not talk about the customer acquisition costs for the company - for Dish TV it is around Rs.2,600 - D’Silva said the model is viable as the company is a volume player.

“The average revenue per user (ARPU) is Rs.999 for us now as most of our subscribers are under the basic package. We expect 30-35 percent of the subscribers to opt for add on packages and when value-added services like movie on demand, gaming and others are offered the ARPU will go up,” he said.

Though brand awareness may be lower for the company outside the southern states Sun Direct has a slight viewership advantage.

“There are more south Indians in north India than north Indians in the south,” he remarked.

He hopes to get more bang for the Rs.1 billion that Sun Direct plans to spend on promotion.

Sun Direct is also in the process of setting up a call centre in Delhi to handle subscriber calls. It has a 400-seat call centre in Chennai.

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