skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Straight Talk Media & Entertainment

Ovum view

Last month, the Competition Commission of India approved the merger of Indian satellite operators Dish TV and Videocon D2H. This landmark deal is the most significant example of consolidation in the Indian pay-TV market since 2000, when direct-to-home (DTH) satellite TV services were first permitted by the government.

What this means for Indian pay TV

Dish TV was already the top DTH operator by market share in India, although it was fourth overall behind the top three cablecos. Videocon was the fourth-largest pay-satellite operator out of six. The merger makes Dish TV Videocon Ltd the largest pay-TV company in the country, but with an estimated 16% share of the market overall, it is hardly in a dominant position. This is probably why the merger was allowed to go through.

This merger is not due to maturity in the market: India is very much a growing market, albeit a crowded one. India's TV household penetration in 2017 is merely 65%, with almost 90% of TV households taking some form of pay TV. TV household penetration is likely to reach 70% by 2022, according to Ovum's latest forecasts, meaning that 30 million new households will have at least one television set within the next five years. India can expect a net addition of 11 million users over the 2017–22 period to reach 162 million, surpassing every other developing region apart from China. Because of this, Indian pay TV offers one of the most exciting near-term growth narratives in the global TV industry.

Dish TV Videocon Ltd will be the largest DTH operator in the world by subscribers, with an active user base of 26 million, leapfrogging AT&T's DirecTV in the US as the largest national DTH service provider in the world, according to Ovum. Still, its combined revenues for 2016 were $883m, whereas AT&T's DTH business in the US generates more than $20bn. This demonstrates the current gulf between US and Indian TV spending. Pay-DTH ARPUs in India are expected to double over the forecast period, from $5 in 2016 to just under $10 in 2022 as Indian audiences slowly increase TV spending from relatively low levels.

Ovum believes the following main factors drove this merger:

  • Given sharply rising content costs, a key motivation for all pay-TV service providers is driving down spend on content on a per-subscriber basis.

  • There are lower costs associated with being one company: DTH operators are charged with recurring license fees (10% of gross revenues) that are not required of national cable operators in India.

  • Pay-TV service and technology infrastructure will, over time, benefit from the combined entity's increased scale. This is particularly critical for pay-TV service providers in the highly competitive Indian pay-TV market.

  • During the period of integration and consolidation, the combined entity will have the opportunity to focus on each company's respective strengths, such as Videocon D2H's customer engagement, TV set-top boxes, and value-added services, and Dish's content acquisition.

  • Digitization and media convergence are on the agenda in India. The opportunity to invest in the digitization of analog homes, which will total more than 40 million households at the end of 2017, will be a key motivator in ensuring these homes are connected first to satellite and not cable.

  • As a dominant player in the DTH space, the combined entity will be able to focus more on higher ARPU segments instead of merely increasing its subscriber base by focusing on the lowest spenders. Combined with the type of content that it is expected to attract to its platform, the company can buck the trend in India of racing to the bottom in identifying the cheapest segments. At the moment, higher ARPU segments in India are adopting SVOD services such as Netflix and Amazon, meaning that satellite companies, which have a tendency to focus on the lowest common denominators, are losing revenue.

  • Telcos have the potential to strike deals for multiplay bundling. For Indian telcos, the IPTV experiment of the past several years has failed. They will be keen to diversify their revenue portfolio and willing to work with satellite operators against the dominant cable players.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

Recommended Articles

  • Enterprise Decision Maker, Enterprise IT Strategy and Select...

    2017 Trends to Watch: Big Data

    By Tony Baer 21 Nov 2016

    The breakout use case for big data will be fast data. The Internet of Things (IoT) is increasing the urgency for enterprises to embrace real-time streaming analytics, as use cases from mobile devices and sensors become compelling to a wide range of industry sectors.

    Topics Big data and analytics IoT

  • Service Provider Technology, Enterprise Decision Maker

    IT services required to smooth the path to automation

    By Kris Szaniawski 17 Jan 2018

    Ovum expects telecoms-specific IT services to be the fastest-growing segment of the telecoms vendor services market, not just this year but also over the next five years, with a CAGR of approximately 7% over the period.

  • Service Provider Technology

    5G – Deployment and Commercial Considerations

    By Daryl Schoolar 24 Nov 2017

    In a few years, operators will start rolling out commercial, standards-based 5G networks. In doing so, these operators will face a variety of deployment scenarios based on spectrum and other various factors. The deployment decisions they make will impact what the network looks like and the types of services offered.

    Topics 5G


Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700

Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

+44 (0) 207 551 9047 - Operational from 09.00 - 17.00 UK time

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 7770704398 or email us at

Contact marketing -

Already an Ovum client? Login to the Knowledge Center now