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Bharti Airtel Ltd., India’s largest Mobile-phone company, anticipates rapid growth at its satellite television unit on increasing demand in rural areas for Bollywood movies and soap operas.
According to Ajai Puri, chief executive officer of the company’s digital TV services business, Bharti has signed up 3.8 million customers to gain a 14% market share. Industry wide, as many as 12 million people may take up satellite television this year.
A price war was subsequently the entry of new players like DoCoMo and Telenor pushed mobile-phone call rates down to as low as a penny a minute, damping earnings growth at Bharti, and prompting the carrier to seek new revenue opportunities. The company is offering a pay-per-view TV service, where new Bollywood movies are made available to rural customers within three weeks of their release in city cinemas.
As per Apurva Shah, head of research at Prabhudas Lilladher Pvt. in Mumbai, the potential is very, very large. But it’s going to entail huge upfront investments and the ability to sustain losses for several years to make a mark in this business, it is ultra competitive.
Bharti, which started its direct-to-home TV service in October 2008, lags behind Dish TV, billionaire Kalanithi Maran’s Sun TV Network and Tata Sky, a venture between India’s Tata Group and Rupert Murdoch’s Star Group. Still, it directs its nearest wireless rival Reliance Communications Ltd., which started its Satellite TV business the same year as Bharti, and has about 3 million customers.
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