Market survey for DTH service

KARACHI
A market survey evaluating the possible application of direct-to-home (DTH) telecom service is being conducted to determine the number of licences which will be issued, Mushtaq Malik, the chairman of the Pakistan Electronic Media Regulatory Authority (PEMRA), informed Pakistan Today on Wednesday.
DTH is a digital satellite service that provides television services direct to subscribers. “DTH is the requirement of the market now, and we support the introduction of this technology. It appears that the market’s small size can only sustain one such service provider in the country; the regulator can expect heavy pressure from potential providers to issue more licences.”
There is currently no DTH service in Pakistan, while there are seven DTH operators in India alone. Malik said that in 2003, a bid was issued for DTH service, two TV channels applied. “They were supposed to pay a fee of Rs 250 million in a single lump sum, but they went to the Sindh High Court to gain permission to pay in installments,” he said, adding that if installments had been originally stipulated, more bidders would have been invited,” he added in frustration.
The two channels paid Rs 120.5 million and Rs 60.5 million, respectively, to PEMRA and both are now determined to seek a DTH licence. “Two or three cheques that one of these channels gave to the regulator have bounced, and we are still awaiting full payment.”
Recently, a representative of General Satellite Corporation of Russia, Dolgopolsky, announced during a visit to the Federation of Pakistan Chambers of Commerce and Industries that his company is interested in collaborating with Pakistani channels for DTH service provision in Pakistan.
He also claimed that his company was ready to bear half of the total cost of the project. “The average cost of these types of projects is around $20 million but the cost will vary according to model and services launched,” said Malik.
According to experts, DTH technology is capable of transmitting audio/video signals to subscriber’s premises by using geo-stationary satellites, the small dish antennas are used to receive signals by using set top box with a higher quality audio and video signal than is currently available in the domestic market.
Cable TV currently generates high revenue with DTH posing a threat to existing analog and digital cable TV systems, especially due to its proximity and low-cost penetration in rural areas, experts opined.
The emergence of DTH could potentially, contract the revenue earned by cable operators A thorny issue is also the restriction placed on any potential licencee to use PAKSAT designation for the DTH service which is to be formally launched in the third quarter of 2012.
On the other hand, as indicated by PEMRA’s annual report, infrastructure for a new digital cable system is simply not in place. It has been indicated that the first phase is incomplete and will be finished only by December, 2011 and that too, only for certain urban localities.
The district-level penetration of digital cable TV system was meant to be launched in January 2010 and completed by the end of December 2015. Experts said that if PEMRA completes the digital cable TV penetration in Pakistan at both metropolitan and district levels in five years as planned and launched the DTH service; it would generate intense competition between both segments.
However, handling this competition may be tough for PEMRA.