Dish TV recently announced its launch High Definition (HD) Service – ‘Dish Tru HD’, targeting a premium subs base. Mgmt has tied up with broadcasters like ZEEL and ESPN/Star Sports (FIFA World Cup) to offer their popular channels in HD resolution on its DTH platform. Management expects the large sports calendar (driven by FIFA World Cup & Common Wealth Games) in FY11E to help drive HD penetration. At the launch, it indicated that ~60,000 and 0.25m HD sub adds may be possible in FY11/12E respectively
In the 4QFY10 results con-call, mgmt mentioned that the HD market in India is in its infancy with only 2000 subs (in the 20m DTH subs market). We believe for HD to succeed, it is first important that the entire value chain is in place, i.e. – a) broadcasters should be able to offer content using the technology, b) the consumers should also have HD-ready TV sets, and, c) ready cable/satellite distribution support. Currently, only ~5-6 channels have content in HD format and only ~2.25m HD enabled TV sets in the market.
We view the HD launch more as a ‘preparation for the future’ strategy and don’t expect any meaningful upsides in the near term. We have not factored the HD launches in our estimates yet; given that it is in a nascent stage and will only form a very small proportion of the overall subscriber base. This has the potential to be a growth driver in the long term as an improving mix towards higher ARPU subs would aid profitability.
