Direct to Home TV technology: Will it prove game changer for Pak electronic media industry

November 25, 2016

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By: Muhammad Luqman

After experiencing stiff opposition from different stake holders especially the cable operators for a period of 13 years, Pakistan’s electronic media watchdog, PEMRA has succeeded in auctioning first three licenses of Direct to Home service for a total amount of US $ 14.85 million (Around Rs. 15 billion).

As compared to other countries of the region particularly neighboring India, Pakistan was very late in having the Cable TV service. It was the advent of private and independent electronic media by the turn of 20th century that led to the introduction of Cable TV service in this part of the world. By now, this service is available in most parts of the country, even in small towns and rural areas. New connection and monthly charges are affordable but the quality and reliability of cable TV service are not good.  But due to its analog nature, the DTH technology has been responsible for the problems like frequent breakdowns, changes in channels positions, no service during power outage, no high definition quality and small number of channels.  But due to non-availability of DTH, Pakistan have been forced to rely on either outdated analogue cable TV or the illegal Indian DTH and sometimes DWN and PTCL Smart TV.  Digital Wireless Network (DWN or Sun TV) presently looks the best option but it is not DTH but a DTT (Digital Terrestrial Television) with limited coverage in Islamabad, Lahore and Karachi only.

In contrast to the traditional cable TV, the DTH, apparently a small dish antenna with a set top box provides the viewer the independence to watch a particular TV channel on a particular number with all the clarity.

In the neighboring India, DTH was launched in 2004. It has now 7 different operators providing DTH Services. Nepal, Sri Lanka and Bangladesh have also DTH technology, leaving Pakistan the only country in South Asia without this service.

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Initially, there are going to be three DTH operators in Pakistan but the number will swell with the passage of time. These operators will have to offer incentives and attractive packages to help the viewer’s presently using illegal Indian DTH to new local DTH service. Pakistani operators will have to offer the technology to the users of analog based cable technology at a cost as low as Rs. 500 per month. Otherwise, it will crash in no time.

Pakistani DTH services, when launched, will counter the sale of illegal Indian DTH services in Pakistan, which incur a heavy loss to the national exchequer because of transfer of between $200 million to $350 million to India annually on account of subscription fee. Now the legal DTH services will give consumers a choice against the current monopoly of cable operators as well.

According to data available with PEMRA, Pakistan has nearly 25 million electronic media subscribers and between three to five million consumers use Indian DTH illegally. After issuance of licenses, subscribers of Indian DTH would have to shift to the local network.

Similarly, foreign channels will get landing rights to come under the local regime through a regulatory process and launching of new local satellite channels will be allowed.

The DTH license holders will have to start operations within the year or risk termination of licenses. The bidders are required to deposit 15 percent of the bid money at the outset of the bidding as earnest money, followed by 50 percent of the bid money upfront. The remaining amount could be paid immediately or in three yearly installments at a mark-up rate.

Each DTH license holder is required to pay an annual fee of Rs.10 million and contribute two percent of their gross revenue after the first three years of operations.

Similarly, licenses to the bid winners would be awarded after clearance from the interior ministry and law enforcement agencies.

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The current analogue distribution system is offering a maximum of 80 channels while the DTH would increase the capacity to around 120 and each local DTH license holder is expected to have at least 500,000 subscribers.

Besides lucrative investment, the DTH regime would also make a significant contribution to job generation in the country leading to 15,000 jobs (5,000 by each company) i.e. new direct employment opportunities.

In short, the advent of Direct to Home Technology will not only empower the viewers to have uninterrupted transmissions with good quality but also help regulate the beaming of foreign channels that will now to have to have landing rights.