Dish TV to offer free set-top boxes

Move aimed at impending entry of Reliance, Bharti services.

The price-war has begun in the direct-to-home (DTH) market with the country's largest DTH company Dish TV — with over 3 million subscribers —getting ready to offer its connection virtually free.

Any consumer who wants to buy a Dish TV connection will not have to pay for the set-top box, the hardware essential to access DTH services and normally costs Rs 2,500.

This move is in anticipation of the launch of services from Reliance Communications' Big TV and Bharti's DTH services and also to take on its competitor Tata Sky, which has now crossed the 2 million subscriber mark.

This step is also expected to add to the monthly losses of Dish TV, currently estimated to be over Rs 450 crore.

According to sources, Dish TV is set to undertake a massive branding exercise centred on a "free Dish TV connection" featuring its brand ambassador Shah Rukh Khan at an estimated budget in excess of Rs 50 crore.

According to the plan, a Dish TV set-top box is likely to come free with every Dish TV connection as the consumers will just have to make an annual one-time payment of Rs 4,000 towards the monthly subscription fees.

Recently, Big TV had announced its DTH connections for its employees at only Rs 1,000 plus the monthly subscription fees of about Rs 300 (see table).

According to industry experts, this move is likely to benefit Dish TV increase its overall DTH market share, from 59 per cent to over 65 per cent, within a month. A free set-top box is likely to increase Dish TV's losses as every DTH company heavily subsidises the cost of its set-top boxes.

A DTH set-top box normally costs Rs 3,200 to Rs 3,500 to the DTH company but is offered to consumers at Rs 1,500 to Rs 2,500.

Via Business Standard