Venugopal Dhoot sees opportunity in the direct-to-home (DTH) business as he plans to push Videocon's Plasma, LCD and premium TV sets.
As part of Dhoot's backward integration strategy, the consumer electronics giant will also manufacture the set-top boxes (STBs) in the Aurangabad factory.
Bharat Business Channel Ltd (BBCL), a separate company for the DTH venture, will have a war chest of Rs 10 billion over two years as it readies to enter a turf that will see intense price competition.
DTH in India, with players like Dish TV, Tata Sky, Reliance ADAG and Bharti, will be a low ARPU (average revenue per user), high volume game.
Dhoot, not new to price wars, believes that the DTH market will expand and his distribution network will provide the pipeline for him to mop up one million subscribers in the first year.
Heading the DTH venture is Anil Khera , who was earlier in charge of Videocon's Sansui and Kelvinator brands.
In an interview with Sibabrata Das, Khera talks about BBCL's plans to quickly penetrate the DTH market across the country.
Excerpts:
Why does Videocon want to enter into the DTH business when the market has too many players and the race for subscriber acquisition is going to be led by a huge subsidy element? |
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Is Videocon entering the market because it sees DTH as an integrated business model with its consumer electronics business? |
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Will Videocon Industries have any holding in BBCL and how much is being pumped into the DTH business? |
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Is BBCL in talks to rope in an equity partner? |
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How many subscribers are you targeting in the first year and at what ARPUs (average revenue per user)? |
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At what subscriber and ARPU level will BBCL break even? |
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Aren't you entering at a time when the price war will be at its height as Reliance and others launch their service? |
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Will Videocon manufacture STBs only for BBCL? |
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When will you launch and how many channels will be on offer? |
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What is the differentiating content BBCL will offer to mop up subscribers? |
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How many Ku-band transponders have been booked and on which satellite? |
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What is the call centre facility being created? |
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The telcos feel that they have IPTV plans and DTH will complement that growth. What is the synergy Videocon sees in the DTH business? We have been associated with consumer durables for over two decades and have a deep understanding of the viewing experience that a consumer seeks. We will drive penetration across the country soon. |