MUMBAI: A JP Morgan report concludes that direct to home services (DTH) could suffer and are unlikely to commence in the medium term.
The JP Morgan report states that the key reasons for this scenario are :
o The 20 per cent foreign direct investment (FDI) limit makes financing options difficult.
o The cross-holding regulations (limiting cross-ownership to 20 per cent) make it unattractive for media companies. There is a perception that the government is not looking at changing these regulations in the near term.
o The open architecture of the DTH STB desired by regulations is not a commonly-used technology. This would also lead to a delay in procuring such STBs.
o The prices of DTH STBs are much higher than CAS STBs.
o The headstart that CAS would obtain would limit the success of DTH. Additionally, the HITS model of CAS, which is very similar to DTH (in C-Band), would eat into the target market of DTH.
o In the absence of the distribution franchise of DTH, as opposed to cable networks, the distribution of STBs could be an issue.