Mr.Tony D'Silva, CEO, Sun Direct

Mr. Tony D'Silva, CEO, Sun Direct, joined as the COO of Sun Direct in September 2007. Currently, he has been promoted as the CEO of Sun Direct. He comes with the rich understanding and knowledge of the entertainment and broadcast industry and is an expert of various mission critical components of the DTH business. Before joining Sun Direct he served as the head of distribution for Star India. He joined the Star India team from Zee Networks. Tony was the CEO of Modi Entertainment Networks before taking over as Zee Network's head of international operations. He has worked with tobacco major Godfrey Phillips and consumer product giant Reckitt & Coleman in the past. Tony’s vision is to make DTH a common mans product and make the services available at arms reach through intense distribution networking.

Sun Direct is India's youngest and most exciting state of the art DTH company. It is a 80:20 joint venture between the Maran Family and the Astro Group, Malaysia. Currently Sun Direct has a subscriber base of 5.4 Million customers. It is the fastest growing DTH player in the country which added more than 2.3 million customers in FY10. Sun Direct is the first DTH company in the country to launch the High Definition DTH service and is the first DTH company to adopt the latest MPEG-4 based technology, offering better compression and signal quality to increase broadcast capacity.

In an exclusive interaction with Hemant P. Maradia of IIFL, Mr. D’silva says: "Any new industry will have to go through its learning curve and must achieve its critical mass to break even."

What has been the response to your HD service since its launch in April? How many subscribers have you managed to garner for this service?

Being the first DTH player to introduce HD services in India has in itself been a huge challenge for us. It called for partnering with global players in getting the three essential ingredients in place for a truly world-class HDTV experience - HD content, HD television and set-top box and HD transmission capability in place.

We have never shied away from bringing in the best entertainment value to our customers and HDTV is the latest feather in our cap. The initial response has been huge and there is a severe constraint on the set-top boxes which is a major bottleneck that we are addressing seriously.

What is the proportion of new and existing customers in the HD service?

HDTV is a new phenomenon in India, but we see a huge potential market of over a million HD Television owners waiting to be converted to HDTV viewing here. With more mass appealing content being made available in HD format (IPL cricket and the coming Commonwealth Games) we are creating the right eco-system for a robust HDTV market in India.

India is a very price sensitive market. Do you feel there will be takers for the high-end DTH services like HD and VOD? What kind of growth do you see for your HD service?

Going by our experience we would like to correct the context to say that it is a value conscious market and not a price sensitive one; customers will pay the price for the right entertainment value.

Also, there is a ready market of over a million customers with HD television buy no HDTV content waiting to buy into the HDTV experience. For us HDTV and VOD are clear market differentiators to give us the high growth edge to achieve our overall market objectives.

What is your strategy for value-added and interactive services? How many of your total subscribers have opted for some kind of VAS or interactive service?

Our definition of value added services is different, in that we believe in addressing the core entertainment needs of our customer. DTH being a new growth market VAS will take importance when we have a critical customer mass for it to make a positive difference to the bottom line. Currently we are testing VOD options with our customers and will progressively add more such innovative services.

Where has your major growth come from – urban areas or towns or rural regions? Going ahead, what will be your customer acquisition strategy in terms of various regions?

We have very clearly focused on the tier II and tier III cities and towns for our growth with regionalized content. Think Regional: Go National has been our core customer acquisition strategy right from the beginning. Rural or small town markets are not lagging far behind the larger metro cities. So we see no great urban rural divide in the DTH market for us.

The cost structure and the tax structure for the DTH industry are unfavourable vis-à-vis cable industry. What is the DTH industry doing to address these issues?

Again, this is a policy related issue and has been taken up by the industry bodies with the relevant policy authorities; we hope the efforts will work out favorable for the DTH industry.

You seem to have adopted a value-for-money pricing strategy and your packages too are quite innovatively designed. Tell us about the thinking behind this?

Our customer entertainment quotient survey pointed out to the fact that nationally Indian television homes have a core basket of top 15 channels in their must view basket. We have factored the regional nuances to package our channel offerings and priced it on a pay for what you view option which has today made us the fastest growing DTH player in the country.

What about profitability? Can DTH players in India make decent profits in a highly competitive and regulated environment?

Any new industry will have to go through its learning curve and must achieve its critical mass to break even. The DTH industry is at a nascent stage and the onus is on the industry players to give it shape and direction and create a viable environment for business growth.

What is your view on interoperability? Does this really make sense for the DTH industry?

There are several techno-commercial and regulatory issues that goes into any such arrangement and the DTH industry is yet to move into this stage.

Do you see the cut-throat price war in DTH leading to some kind of consolidation?

The prices are already low, but there is room for quite a lot of innovative content packaging options which can drive revenue and growth for the industry. In the current scenario consolidation is a grey area which needs a lot of clarity and hence we feel it is a little too early to talk on this topic.

What is the overall outlook for the Indian DTH industry? What kind of CAGR growth do you see over the next five years?

We are sitting on an existing 120 million C&S home market. Today the DTH market is a little over 17 million homes. This shows the gap that needs to be bridged, also factor the new customers buying into a television and we see double digit growth for the industry in the next five years.

Source: India Infoline Limited

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